Masaryk university faculty of social studies

2.3 Neo-Neo debate
As we have pointed out, neoliberal institutionalism and neorealism do not stay on completely different bases. On the contrary, even though there have been severe debates (or as some authors name it “the third great debate”) between Kenneth Waltz, Stephen Krasner, Robert Keohane, Joseph Nye, Joseph Grieco or John Mearsheimer ¹⁹, there are some fairly visible connections between these two theories; points, that will help us understand even the differences between these two theories and their applicability.

First, the current neo-neo debate does not evolve around the techniques of statecraft. Even though Keohane and Nye in their 1977 Power and Interdependence (2001, 23-28) called for the revision of the classical realist tenet that “military force is always a central component of national power”, only a few years later Grieco's (1988, 491) description of the five central propositions of realism mentions only a concern for power and security and says nothing about the utility of military force²⁰.

Second, earlier critics of realism, especially in the 1930s, 1940s, and 1950s, often cast the debate as one between altruistic moralists and egoistic power calculators. In the current debate, however, both sides argue from assumptions that states behave like egoistic value maximizers. Moral considerations are hardly mentioned (Baldwin 1993, 5-8).

Third, the question of whether to treat states as the essential actors in international politics has been pushed into the background. Although neorealists and neoliberals disagree on the relative importance of nonstate actors, both treat states as the primary actors. And fourth, this is not a debate between conflict theorists and cooperation theorists. The twin ideas that conflict and cooperation are intrinsic elements of international politics and that both can be studied at the same time are accepted by both sides. The books by neorealist Joseph M. Grieco (1990) and neoliberal Robert O. Keohane (1984) are contributions to theories of conflict and cooperation. Although neorealists are more likely to emphasize conflict²¹ and neoliberals are more likely to emphasize cooperation²², both sides have moved beyond the simple dichotomy between cooperation and conflict that characterized earlier discussions (Baldwin 1993, 5-10).

Thus, neoliberal institutionalism will be a more suitable theoretical approach towards the aims of this thesis. The neo-neo debate is a viable question even of today’s international relations theory and the differences and similarities of these two theories will serve as an interesting battleground for the application towards the Japanese foreign policy. Thus, even though some “classical” liberal theory notions might also be mentioned, the main focus will be put on the institutionalist paradigm, trying to find an answer to the “How do international organizations, regimes or other groups of actors affect the Japanese position in international system” question, as opposed to the neorealist “how does the structure of international system affect the position of Japan in international relations”.

3 Background for analytical work
The background for application of these theories is of course, the Japanese history since the Second World War. However, for the simplification of the approach, this thesis will divide the assets of Japanese 20^th century history (after identifying general tendencies in Japanese history as well as institutional bases for foreign policy creation) into single chapters and treat them accordingly. The main topics for this research will then be: the U.S.-Japan relations and Japanese pacifism; Japanese approach towards the North Korea issue; Japanese relationship with China; Japanese role in the region (primarily South-East Asia) and the debate about the possible change of Japanese constitution.
3.1 Brief overview of Japanese post-war history
Japanese post-war development demonstrates a strong continuity in foreign policy making process. There are several widely acknowledged tendencies, which have been present in Japanese foreign policy throughout most of the 20^th century, and even though these trends are slowly changing, it is still important to present them.²³
3.1.1 Centrality of United States
The United States saw Japan’s importance very well. With 85 million of inventive and hardworking people, and understanding Japan’s strategic position, it would be a disaster if Japan would fall into communist hands. President Eisenhower stated in 1954, that “If the Kremlin controls them, all of the great war-making capacity would be turned against the free world…and the Pacific would become a communist lake” (Eisenhower 1954, 585-90 in Brands 1986, 387). Eisenhower saw the need for Japanese rearmament, but at the same time encouraged the congress to support the Japanese economy; and thus these two factors became the center of American policy towards Japan for more than three decades.

A similar approach toward the needs of an American presence in the region can be recognized even in the behavior of Japanese political leaders. The outcome of the debates about Japan’s role in the world and its relationship with the United States was the formula established by Prime Minister Yoshida Shigeru²⁴. This was soon to become the Yoshida doctrine, centered on close alliance with the United States, minimal military rearmament, and a focus on economic recovery (Green 2003, 11; Wan 2001, 24-25).

However, this formula and all the debates that came before it come from American foreign policy during and after the Second World War, particularly the occupation of Japan and the so-called “peace clause” (Bowen 1992, 57). This clause was an Article 9 of the newly made Japanese constitution, stating that,
“Aspiring sincerely to an international peace based on justice and order, the Japanese people forever renounce war as a sovereign right of the nation and the threat or use of force as a means of settling international disputes. In order to accomplish the aim of the preceding paragraph, land, sea and air forces, as well as other war potential, will never be maintained. The right of belligerency of state will not be recognized.” (Japanese constitution, article 9; Seth 1994, 904)
This constitution, as well as the Yoshida doctrine has served as the framework for Japanese foreign policy ever since. Alliance with the United States provided technology transfer, economic assistance and a market for those conservatives that were concerned primarily with economic recovery. For the “hawks”, the alliance provided a source of military technology, defense assistance and external political support for some level of rearmament. For the “doves”, the alliance (constitution) provided a cap on that rearmament, or in the words of one foreign minister, “an honorable watch-dog” (obankensama) over Japan (Pyle 1996, 59 in Green 2003, 12).

Nowadays, most of the ideas set up by the Yoshida doctrine remain valid. Japan still does not challenge U.S. primacy in the area and there is a broad consensus on the need for the U.S.-Japan alliance. However, Japan is becoming more aware of its position within the international system, and pushes for a chair in the United Nation’s Security Council, raises the questions about the need of the change of the constitution and presses for a greater recognition in international organizations and in the region.

3.2.2 The primacy of economic tools
Following the slogan first used in the Meiji era (1868-1912), fukoku kyouhei (“rich country, strong army”), and in accordance to the Yoshida doctrine, the economic catch-up and overtaking (oitsuke oikose) of the West have remained the key national goals of the post-war era (Hook et al. 2001, 8). As a result, since 1945 the principal image of Japanese international relations has been linked firmly to the pursuit of economic interests.

However, with the pursuit of economic interests, Japanese political international presence has been less salient and influenced by a variety of factors.²⁵ Thus, concentrating on economic tools, the Japanese government has not actively deployed political ideology in the service of its international relations, and has lacked the political appetite and capacity to assert a clearly identifiable leadership role on the world’s political stage. (Hook et al. 2001, 11)

Despite a growing focus on traditional security concerns and a recognition of declining relative economic resources, Japanese foreign policy continues to rely primarily on economic tools for power and influence. These tools include foreign aid and contributions to international organizations as well as overseas foreign direct investment. In response to regional political and security crises in the 1990s, Japan’s first responses have usually been financial. (Green 2003, 5; Berger 2007, 115)
3.2.3 Constraints on the use of force
Normative and institutional constraints on the use of force²⁶ (or active foreign policy according to some authors)²⁷ are primarily based within the Constitution. As already written, Article 9 has functioned as a major guideline for conducting Japanese foreign policy. Therefore, it is not surprising, that “for almost six decades, conservatives have regarded Article 9 as a heavy constraint in conducting an active foreign policy, whereas progressives have regarded it as the principal foreign policy guideline” (Berger 2007, 48).

The constitution was established under the 1951 U.S.-Japan security alliance, the single greatest constraint on both foreign policy and domestic politics during the Cold War (Samuels 2007, 39). This alliance was originally designed as an unequal treaty, obviously inluenced by American concerns with Japanese post-war development²⁸ and the shape of the international system during the post-war period.²⁹ Timothy Temerson makes U.S. ambitions quite clear: “In entering into a security alliance with Japan in September 1951, the United States sought both to defend against Soviet/communist aggression and to control the future course of Japanese rearmament, foreign policy and domestic politics.”(Temerson 1991 in Samuels 2007, 39).

So, as it is described earlier, Japan has been constrained on the use of force, not only by domestic factors, but also by international ones. However, these normative and institutional constraints are supplemented by cultural factors: the imperial elite, and in particular the members of the Japanese military establishment that had been discredited by the disastrous defeat, and the prewar militarist ideology that was widely rejected. Article 9 was embraced by many in Japan, both on the idealistic left, but also by many in the Japanese political mainstream (progressives) who developed a nearly pathological fear of the military as a potential threat to democracy (Ikenberry, Mastanduno 2003, 393).

This underlying fear of Japanese re-armament is visible even today, even though the normative and institutional constraints have become more flexible. New missions and capabilities for peacekeeping, noncombatant evacuation operations, space surveillance and logistical support for U.S. forces in regional contingencies all give Japan more tools in its security kit bag (Green 2003, 5). Even though the use of force is still very contentious and strictly observed, the possible constitutional change which would bring more freedom towards active foreign policy is being discussed every day.

3.2.4 No alternate strategic vision
The end of the Cold War brought many unforeseen structural changes within the international system. Security policy seemed to become less important (compared to low policy and economics); there was a widespread expectation that Japan would assume international leadership in a world where economic and technological prowess, more than military strength, would be the decisive measures of power (Pyle 2007, 3). At the same time, the U.S.-Japan trade frictions intensified and the possibility of the withdrawal of U.S. troops was more than real. With the possible withdrawal of U.S. troops, the U.S.-Japan alliance itself, the bedrock of Japan’s postwar foreign policy, is endangered.

To remedy this situation, Japan cautiously embarked on a post-Cold War strategy on supporting the declining U.S. hegemony, through a gradual expansion of Nichibei ³⁰partnership into a global relationship, since no other country (including Japan) was yet prepared to play the type of leadership role that U.S. played in international security and economic affairs during the Cold War. In the area of “high politics”, however, Japan was still unready and unwilling to play an active role in international affairs before the Gulf War (Purrington 1992, 162).

The impact of the Gulf War crisis on Japanese domestic and foreign policy was tremendous. Japan’s failure to respond quickly and the unwillingness to provide even humanitarian or rear-area support³¹ resulted in almost no international gratitude or recognition. According to Courtney Purrington (1992, 162-3) the result of this crisis acted as a “catalyst for a emerging consensus, that Japan must play a more proactive role in international affairs, commensurate to its international economic power and also partially remedied the “allergy” of the Japanese people and opposition parties to military matters.” In other words, it was plainly visible that “the traditional low-posture foreign policy that had focused primarily on economic objectives and means and had worked so well in the past was no longer sufficient” (Berger 2007, 5).

However, even though it is widely acknowledged that the Yoshida doctrine is no longer sufficient for Japan’s foreign policy, no political leader has articulated a clear alternative to it. Political leaders have heralded new initiatives towards Russia or Southeast Asia, but there has been no political mandate for bolder reformulation of Japan’s world role. In part this reflects the weakness of the current senior leadership in Japanese political parties, but it also is based on the conservatism of the Japanese public about international affairs (Green 2003, 5-6). In the current climate of political realignment, leaders who take clear ideological stands on foreign policy have difficulty building a broad enough coalition to govern.

3.2. Domestic institutions and Foreign policy
The acceptance of the fact that the crucial factor in shaping Japan’s foreign policy is the structure of international relations does not imply a ready acceptance of realist or neorealist positions, nor that it’s the only factor, which shapes the international relations of a state. Especially Japan should not be seen as a hermeneutically sealed unit; instead, Japan’s response to, and degree of acquiescence in, the limitation of the structure of the international system is determined by interactions between domestic policy making agents and a range of other political actors. These actors have a different and individual perception of national interests, which interacts with the notions of international system. This means, that Japanese foreign policy making actors and their interests are in constant contact with the pursuits of the system, thus Japan’s international relations should be viewed as the product of a dialectical, or two-way, relationship between international structure and domestic agency, which determines the actions of the latter in response to the former in the context of interest perceptions (Hook 2001, 40-41). With this in mind, the understanding of the Japanese foreign policy making process and actors is crucial to understanding the relations between the structure and the unit.

Japanese foreign policy has been described as “reactive”, “minimalist”, “situational” or “too little, too late”. These parameters describe the strategic culture that has been present in Japan since the Second World War, but they must also be understood as an external manifestation of a political and bureaucratic system, as a projection of the features and dynamics within Japanese politics. This chapter introduces these institutions, identities of the principal policy actors, the normative and ideational factors which condition their perceived interests, and the processes and outcomes of interaction between them. This analysis will help explain their role in the foreign-policy making process, as well as the way in which Japan responds to the international system.

3. 2. 1 Policy making model
The best-known after-war policy making model in Japan stresses the elitist nature and high degree of interdependence between its principal actors, identified as the central bureaucracy, big business (zaikai) and the governing party – the Liberal-Democratic Party (LDP). A range of accounts of the policy-making process in Japan have not excluded competition between the bureaucracy, ruling party and zaikai, but have stressed more their shared human networks and tendency towards collaboration in order to exclude other actors from political influence and policy making process. In this way, the elites have been seen to form an interlocking directorate, or alternatively an “iron triangle³²” (Nester 1990, Green 2003, 37, Maruyama 1969, 128-9), capable of governing Japan’s rapid economic development, albeit with the acknowledgement that these elites are subject to infighting and factionalism within themselves, as well as between each other (Hook 2001, 41).

This triangle policy making model is often seen to be dominated by one of its compounds; however, there is no firm consensus on which of these institutions it is. More likely, the focus switches with time. But, as Chalmers Johnson (1975, 2) points out: “Like a physical tripod, each leg is indispensable for the stability of the structure. It is an endlessly fascinating process to study how each focus of political force interlocks and interpenetrates with the others, but in the end they still must be seen as somehow "incorporated”³³.

This “frozen” system is, however, slowly changing. Even whilst policy making tends to remain highly elitist in nature, a host of other political actors do have an input to the final policy outcome depending on the time frame and the specific issue involved. The growing diversity of Japanese society as a whole, and the rise in saliency of a range of new security, political and economic issues, mean it is necessary to consider the policy-making input of not just the tripartite elite, but also of opposition parties and wider domestic society. This suggests that where possible, a pluralistic and “polyarchical” model of policy-making in Japan should be adopted (Milner 1998 in Hook 2001, 42).
3.2.2 Main actors – Bureaucracy
Official bureaucracy was not established in Japan for scientific reasons but by the Meiji oligarchs to prevent the nascent political parties from placing their supporters into the administration (Johnson 1975, 28). However, over time, the various ministries (shou) and agencies (chou) of the central bureaucracy have become a vital part of the Japanese foreign policy making process, often exercising leading influence over the state’s international relations. The central bureaucracy takes general responsibility for the conduct of foreign policy initiatives in the fields of politics, economy and security, and leads negotiations in bilateral and multilateral settings and executes the drafting of legislation and treaties related to foreign affairs.

The central bureaucracy is generally regarded as a very powerful institution (Green 2003, 56-57; Hook et al. 2001, 42-43; Johnson 1975, 1-28; Pyle 2007, 246-247; Berger 2007, 5-6), with the power and influence being largely based on the talent, skill and accumulated policy expertise of its personnel. It is often said that “Japan suffered from third-rate politicians, but benefited from first-rate bureaucrats.” This quality of the bureaucracy’s personnel is then derived from the Japan’s top universities, where most of the bureaucrats come from,³⁴ and from the esprit de corps feeling stemming from a severe competition to enter the elite ministries.

Besides technocratic expertise, the human networks (jinmyaku) are other important means of power-exercise within the foreign policy making process. As noted before, the role of the university³⁵ is crucial for entrance to the bureaucracy; the limited number of top-rated academic institutions tends to create fractions or cliques (gakubatsu) within and intra ministries. These cliques usually extend even further, to the LDP and big business – for instance in mid-1980’s around one quarter of Diet members and the presidents of 401 out of 1,454 largest firms in Japan were graduates of the Tokyo University (van Wolferen 1990, 111 in Hook et al. 2001, 43). Furthermore, the central bureaucracy has succeeded in “colonizing” the LDP, almost one quarter of the members of both the House of Representatives and House of Councilors are former bureaucrats.

The way of controlling the zaikai is a practice called amakudari (literally: descent from heaven or parachuting from on high), a tactic involving the placing of retired bureaucracy officials on the boards of companies or quasi governmental, special corporations (tokubetsu houjin), especially in order both to provide a financially lucrative post for the ex-official and to ensure closer relations between the bureaucracy and the private sector. These ex-bureaucrats have functioned at various times to heighten the influence of the central bureaucracy over the policy-making process (Hook et al. 2001, 43).

3.2.2.1 The Ministry of Foreign Affairs (MOFA, Gaimushou)
MOFA is chiefly responsible for day-to-day running of Japanese diplomatic agenda with the most important part of work being implementing and creating of Japanese foreign political, economic and security policy. It is divided into ten bureaus: five functional (Foreign Policy; Economic Affairs; Economic Cooperation; Treaties, Intelligence and Analysis) and five regional affairs (North American; Asian; Europe and Oceanic; Latin American and Caribbean, Middle East and African) (Stockwin 2003, 166) with North American Affairs Bureau (NAAB) being probably the most powerful, since it is dealing with pivotal bilateral relations.³⁶ NAAB is formed by highly trained and educated officers and is devoted to the preservation of the alliance with the US, making MOFA the “Champion in U.S.-Japan relationship in the Japanese government (Green 2003, 59). Throughout the 1990’s, MOFA has been subject to growing criticism for failing to articulate a clearly independent Japanese foreign policy. This situation³⁷ resulted in a reconfiguration of United Nations bureau into the Comprehensive Foreign Policy Bureau, which is often considered as a “rival” for NAAB, combining long-term policy planning with short-term crisis management – a difficult function to say at least.

MOFA functions in many ways as the coordinator of Japan’s international relations and as the state’s window upon the world. However, as Glenn D. Hook (2001, 45-46) points out, “its ability to direct and manipulate Japanese foreign policy is constrained by its own internal organizational limitations and the influence it exerts over other ministries and actors. Despite the vast expansion in Japan’s overseas economic and political activities in the recent years, MOFA remains understaffed and underfunded compared to the diplomatic services of many other states. As a consequence, MOFA is unable to oversee the implementation of many ODA³⁸ programmes and is notoriously weak in gathering information relating to political and security matters.”

3.2.2.2 The Ministry of Finance (MOF, Okurashou to 2001, Zaimushou from 2001)
MOF has traditionally been the highest ranked ministry, with unparalleled influence over all aspects of public policy as well as foreign affairs. This influence is nested within two of the MOF’s main organs: the Budget Bureau, controlling the budget of other ministries and agencies, and the National Tax Agency, controlling revenue collection and audits. MOF’s primary role has traditionally been the protection of the domestic banking industry and fiscal rectitude, and the main focus has always been ensuring the survival of Japanese banks, controlling inflation and exercising investment guidance (Stockwin 2003, 165). However, since the break-up of the Bretton Woods financial system, MOF has been pushed to play a bigger part in international financial system. MOF’s direct role in international affairs is managed by the International Bureau³⁹, which is mostly responsible for the international activities of Japanese banks, communication with international financial institutions such as IMF, WB, OECD or G7 and bailout packages for debtor countries.

MOF is aware of US’s primary role in the international financial system and has cooperated in bilateral, regional and global development bank forums in order to stabilize the global economy. However, these major issues aside, MOF is showing a huge deal of energy in challenging the US’s global and primarily regional role. Senior MOF officials have made high-profile proposals like the Asian Monetary Fund, and continue to engage actively in the future “architecture” of international financial system. Their efforts, however, are usually hampered by the ministry’s inability to execute restructuring of the banking and financial sector at home (Green 2003, 61).

3.2.2.3 Ministry of International Trade and Industry (MITI, Tsuushou sangyoushou) / Ministry of Economy, Trade and Industry (METI, Keizaisangyoushou) (after 2001)
MITI’s (now METI’s) function is to promote Japan’s international trade and commercial interests, and plays an important role in trade negotiations and the distributing of the ODA (Haitani 1990, 240-241). It is divided into seven bureaus, but possesses a number of special corporations such as the Japan External Trade Organization (JETRO) – an organization with considerable information-gathering capacity (Hook et al. 2001, 47). MITI/METI plays a direct role in Japanese foreign policy primarily through the International Trade Administration Bureau (which handles trade insurance, foreign exchange and import/export promotion) and the International Trade Policy Bureau (concerned with international trade negotiations and WTO, G8 and APEC).

MITI has always been aware of the US’s importance for Japan’s foreign trade and has always worked within this framework. However, at the same time, and most importantly recently, MITI has “discovered” the trade opportunities in East Asia and Europe and acted accordingly; MITI has started pursuing Japan’s economic relations even if it has threatened or caused friction with the US. In contrast with MOFA, MITI has become far less pro-US, focused on the promotion of economic cooperation with China or Vietnam. Another difference between MOFA and MITI lies in MITI’s significant domestic constituency and its connection with large firms; there are a lot of MITI’s officials who moved to private sector by the amakudari practice.

3.2.2.4 Evaluation
Thus, even though there are grounds for criticizing the bureaucracy performance over the past century, it has certainly been equal or superior to that of such groups as the military, the politicians and the economic leaders (Johnson 1975, 28). However, despite the influence and quality of the central bureaucracy officers, it has hardly been insulated from the strong winds of change in the political world (especially in last 20 years), in Japan’s own political economy, and in the international system. Political realignment has complicated the bureaucrats’ policymaking process and exacerbated interministerial conflicts (which must be arbitrated by the politicians). Changes of coalition governments have led to political purges against senior bureaucrats, and the loss of socioeconomic cohesion has weakened the bureaucrats’ levels of influence. The collapse of the Japanese economic model (with the bubble economy crisis of the first part of 1990’s) has undermined their prestige and morale. The media and nongovernmental organizations are following the politicians and encroaching on bureaucratic control of information and policy decision. And the external shocks of the Gulf War, the North Korean threat, and the rise of China have challenged their old modus operandi (Green 2003, 57).

The central bureaucracy still plays a major role in Japanese politics and exerts a considerable influence over Japanese foreign policy-making process. At the same time though, the extent of this influence is counteracted by the conflicts of interests within or between the ministries themselves. It is possible that a new equilibrium in political realignment and the emergence of a clearer political platform will lead to more centralization of decision making and the bending of the bureaucrats to a national mandate. But, as for now, each bureaucratic institution is in transition, struggling to reshape old strategies to the form, which could safeguard national power and well-being in the uncertain times ahead.

3.2.3 Liberal-Democratic Party and the party system transition
The LDP has traditionally been the subject of much public and academic derision insofar as foreign policy-making is concerned. This originates in LDP’s apparent deference to the central bureaucracy, lack of policy vision in international relations and greater interest in constituency politics than in Japan’s position within the international system. It is perhaps most surprising then, that even after all the financial and economic troubles and even electorate reforms, which took place in the first half of the 1990’s, LDP still remains in power (Krauss, Pekkanen 2004, 2). The electorate reforms of 1994 introduced new disclosure rules on campaign financing and the move away from multi-member constituencies to a dual system of first-past-the-post single member constituencies and proportional representation⁴⁰ (Hook et al. 2001, 53; Park 2001, 431-7). This move greatly restricted political fundraising, introduced governmental subsidies for political parties and put an end to the former tendency of personalization of politics for politicians. The last point is especially important, since it stopped the notion of avoiding taking a stance on international issues in favor of low-key policy statements and a focus on the particular interests of the voters at the grassroots level.

Nevertheless, as a member of the tripod system, the LDP has been one of the most important foreign policy-making actors since its foundation in 1955. Its influence dwells from its policy-making expertise with the connection to the central bureaucracy; adjusting the interests of various elite groups of state or non-state organizations and their democratic mandate as the representation of the citizens. This allows the party to use the intertwined interests of various pressure groups and organizations and project them to the policy-making process. Furthermore, the Diet’s members possess an ultimate advantage over the state’s foreign policy, as they control the passage in the Diet of Defense, ODA and ministerial budgets as well as legislation connected to security, political and economic matters.

And since LDP has been a ruling party for most of the 20^th century, it is important to take a look at its performance and primarily its adaptation to the party politics transition in the 1990’s.

Figure 1. LDP vote shares in post-war elections

SOURCES: For 1958–2003, Ishikawa Masumi, Sengo Seijishi Shinpan [The history of post-war politics, new edition] (Tokyo: Iwanami Shoten, 2004). For 2005, Asahi Shimbun, September 12, 2005 in Patterson, Maeda (2007, 420).

NOTE: The vote shares for the four elections under the new electoral system (1996, 2000, 2003, and 2005) are weighted averages of two components of the electoral system.
Figure 1 shows the vote shares captured by LDP during the second half of 20^th century, revealing a tumultuous election history, but within this timeframe, 4 electoral periods are identifiable (Patterson, Maeda 2007, 419). However, since the elections to the Lower House held on August 30, 2009⁴¹ brought the victory of opposition – Democratic Party of Japan (DPJ)⁴², we should add a fifth period for this scheme to be accurate.

The initial period reflects the first three elections, in which LDP secured an overwhelming victory, resulting in an unlimited rule, sometimes called “one-and-half” party system.⁴³ This period was followed by a period of secular decline, with two visible benchmarks: 1967, the first time LDP’s vote share dropped below 50%, and 1976, when the share of Lower House seats dropped under 50%, forcing LDP to search for alliance members⁴⁴. Third period can be seen as the five consequential elections following the 1976 incidents (until 1990). In this period, we can see “conservative resurgence” (hoshu kaiki), with LDP getting stable score of 45-50%, even though the results may seem a bit shaky. This period was ended with the 1993 elections, and those who had made the LDP lose its predominance status. To be sure, the LDP was still the country’s largest vote getter, but it could no longer singularly dominate the House of Representatives with the vote and seat shares it obtained in lower-house elections. Part of the reason for this is that prior to the 1993 election, the LDP’s centrifugal tendencies led it to fracture more seriously than ever before, residing in a number of fractures leaving the party⁴⁵ (Patterson, Maeda 2007, 421). Consequently, this period is often called “party dissolution“ period.

However, it is necessary to add the last, fifth period. This period originated in 1997’s Upper House elections, dealing a fatal blow to LPD seats, forcing Prime Minister Abe Shinzo to resign in September (despite citing health problems). (Govella, Vogel 2008, 97-100)

Figure 2. 2007 Japan’s Upper House elections.

Source: Govella, Vogel 2008, 98

This event was seconded with the August 2009 Lower House elections, dealing another fatal blow for LDP. DPJ won with what most of the news commentators regarded as a landslide victory (Talmadge 2009, Fackler 2009, Alastaire 2009), sending LDP out for only the second time during the after-war period⁴⁶. This vote symbolized the final blow to the island nation’s postwar order, which has been slowly unraveling since the economy collapsed in the early 1990s⁴⁷.

The LDP is a catch-all party, diverse in political alignment and with a range of views on Japan’s international relations. Its overall conservative pro-bilateral alignment has, nevertheless, served in favor of Japan-US bilateral relations and alignment with the US, which has remained a fundamental basis for all spheres of Japanese international relations. This connection of LDP with the US is visible throughout all the 2^nd part of 20^th century. LDP has worked hard on preserving domestic support for the security alliance and wider relationship with the US. During the Cold War, for instance, this meant that the LDP often advocated support by the Japanese government for US client states in East Asia, such as the provision of ODA to South Korea and South Vietnam, and usually voted in accordance with the US on questions such as North Korea and communistic China in the UN (Hook et al. 2001, 53). In accordance with this, LDP has invited the Japanese Liberal Party (LP) to a coalition (1999-2000), since it has advocated strong, proactive line on Japan’s security relations with US after the Cold War.

Of course, this pro-American stance was challenged from time to time, due to LDP’s factional structure; however, this dissent has been aware of the need to avoid worsening of Japan-US relations. Prime example might be the serious debates within LDP on the issue of Japan-China relations in the first part of the Cold War period⁴⁸. These different opinions within LDP have been manifested through ‘policy tribes’ (zoku) or factions (habatsu). Although these groups have usually have supported the US-Japan relations, they differ on a range of aspects of Japanese foreign policy; causing conflicts within LDP⁴⁹. These conflicts might either remain unresolved (and produce a stalemate), or be settled and produce a dramatic victory of one faction over another. However, it is not as important whether they immobilize Japanese foreign policy or make it more dynamic; important is the demonstration of domestic factors in shaping Japan’s international relations. And even though the LDP’s main policy line has been the protection of US-Japan alliance, it is visible that even LDP members are willing to “exploit the flexibility in the structural limits imposed upon them by the US in order to inch towards fuller engagement with those states and institutions at apparent loggerheads with US interests” (Hook et al. 2001, 55)
3.2.4 Zaikai: the business community
The third part of the iron triangle, Japan’s private sector business community consists of large TNCs and business conglomerates and associations. As Japan relies so heavily on external trade, the business community is very influential in foreign trade and policy. However, zaikai’s main source of power is the network connection within LDP, other political parties and bureaucracy – especially the economic ministries MOF and MITI; making it difficult to discuss public policy abstracted from private interests (Calder 1989, 379). Zaikai’s main interest is to advance profitable private sector links with the US, Europe, East Asia and elsewhere.

Similarly, as with other members of the iron triangle, the business community should not be seen as a unitary actor. Their views are represented by four business organizations: Federation of Economic Organizations (Keidanren); Japan Council for Economic Development (Keizai Douyoukai); Japan Chamber of commerce (Nihon Shoukou Kaigi Shou); and Japan Federation of Employer’s Association (Nikkeiren) with Keidanren being the largest and most influential one of them (Langdon 1961, 271-3). Keidanren has taken the lead in promoting liberalization of the Japanese economy, as well as of promoting Japanese FDI abroad. Also, until the end of 1955 system⁵⁰, Keidanren provided massive funding for the leading LDP, to gain indirect influence over policy-making.

The role of the business community in foreign trade is usually connected with information gathering, though it is also believed to excel that of MOFA and even JETRO. The business intelligence is usually backed by extensive personal links and connections to other state’s government or economic sphere, making Japan’s business sphere often more integrated and knowledgeable of economic policy debates of host countries then MOF or MITI. These connections make the zaikai an important connection for the Japanese government, as they improve Japanese position and support the government’s efforts. However, the business community should be seen as a private sector actor; the excess of its government support depends on the outcome; thus zaikai often exploit their position in order to overcome the structure of political and economic isolation imposed on Japan by its relationship with the US.

Business is an important actor within Japan’s foreign policy making process, and its importance lies mostly on the information and indirect influence it can exert within host countries. Its willingness to cooperate with the government though, stands on the amount of money the business is able to earn; the government can in fact only create the political and economic conditions, through the distribution of ODA and working to stabilize diplomatic relations and similar activity, which serve to encourage Japanese firms to trade and invest in other states (Hook et al. 2001, 57). This being said, the lack of business interest may be an immobilizing actor for Japanese foreign policy.