Can Eight Parties With Often Conflicting Interests Rule Japan? : Government: Everybody seems to be promising reform, but why would any self-respecting politician do himself out of a job?

Sweden, Israel, India, Italy--and now Japan. The last of the long-lived predominant-party regimes forged in the postwar era has finally ended. Japan’s Liberal Democratic Party, after 38 years in power, is out. In its place is an eight-party coalition government principally united by its opposition to the Liberal Democrats.

What does this portend?

The most optimistic scenario foresees an era of exuberant change, in which Young Turks carry out sweeping political and economic reforms, decentralize political power and deregulate the Japanese economy. These optimists await the emergence of a two-party system more responsive to Japanese consumers and open to the goods of foreign producers. They allude to atmospheric changes in Japan’s political style. For example, in the last few weeks, party leaders spoke directly to voters and were chosen in open party elections; younger members talked back to older ones, and talk radio reminiscent of that in the United States flourished.

The far more numerous cynics expect little, if any, real change. They concede that the Japanese public is titillated by the talk of reform, but point out that it is not actively mobilized, as evidenced in the record-low turnout for the July elections. They see the new coalition as unstable and unwieldy, and question the reformist credentials of its leaders. Some even see the whole episode as a clever gambit by some ambitious Liberal Democratic politicians to remold the party system to their own benefit.

More likely, the future lies somewhere between these scenarios--not revolution, not status quo, but slow evolution. Electoral reform will be difficult. In its absence, policy change will be moderate. Predominant-party rule is probably gone, but the current Cabinet is, indeed, shaky, and the Liberal Democrats will likely dominate future coalitions.

The success of the Liberal Democrats in delaying the formation of the new Cabinet showed that they will be formidable opponents. The party’s remaining members performed strongly in the July elections, and the party chose a relatively young leader with a reputation as a reformer, Yohei Kono. Indeed, for all the appearances of change, the elections were, in some ways, quite conservative: the rump Liberal Democratic Party lost only four seats, and ideological conservatives of all stripes did well.

The most exciting development coming out of the elections was the emergence of the Japan New Party, winner of 35 seats in Parliament. With an average age of just 40, compared with 54 for the Liberal Democratic Party, the New Party is the most committed to change.

Morihiro Hosokawa, the new prime minister and a member of the New Party, often has been vague and vacillating on both policies and politics. He is reluctant to cut taxes or increase deficit spending to stimulate the economy and reduce Japan’s current-account surpluses. In an embarrassing reversal, Hosokawa was forced to oppose increased compensation for the victims of Minamata disease from his own prefecture of Kumamoto.

His Cabinet must balance the interests of eight parties and groups with significant ideological differences in such areas as national security, nuclear power and public finance. It is unable to agree on any major policy changes. For example, not a single party has called for opening the rice market or compromising with Russia on the return of the Northern Territories.

For all the talk of deregulation, any relaxation is likely to be limited. Hosokawa is its most insistent proponent, but his party holds fewer than 7% of the parliamentary seats. Nor is regulation simply a plot by bureaucrats intent on controlling the economy. In all countries, regulation tends to be heavily influenced by the regulated industry. This is especially true in Japan, where Liberal Democrats cosseted many businesses with flexible and supportive regulations. Consumer interests are weak in Japan, and firms constrained by excessive regulation are more likely to push for flexibility than laissez faire.

Still, the fall of the Liberal Democratic Party will lead to some changes. Hosokawa and his new coalition have pledged to take responsibility for Japan’s aggression in Asia during World War II. They also have included more women in its councils--a record three women sit on the Cabinet. If the coalition succeeds in passing electoral and campaign reforms, the changes would probably be more dramatic, including a shift away from farmers and small business toward urban consumers. But attaining a compromise will be difficult, and failure would let the Liberal Democrats off the hook. In his first press conference, Hosokawa said he would like to complete a bill by the end of the year, and would “take responsibility” if it fails.

The coalition has staked its Cabinet on electoral reform, but it eluded former Prime Minister Kiichi Miyazawa and will be difficult as well for Hosokawa. All members of Parliament and political parties would face uncertainty under any new system, and some would fare badly. The Socialists are particularly concerned about Hosokawa’s proposed combination of U.S.-style single-member districts and the proportional representation system common in Europe. Nor is there a groundswell for electoral reform; both the public and business groups would rather focus on curbing corruption and restarting the economy.

There are three possibilities. If electoral reform proves impossible, a quick election based on the current system will probably result. The most likely outcome is a continuation of fractured politics. Since the current government has essentially admitted that it cannot agree on any policy issues, coalitions based on the Liberal Democratic Party are the most likely and stable outcome.

However, there is also a chance that coalitions could form around one of the two parities that split from the LDP. The Renewal Party, which already controls the major posts in the Cabinet, is dominated by Ozawa Ichiro, the most powerful and intriguing figure in Japanese politics. Ozawa talks boldly of running a large slate of candidates in the next election. He is widely criticized for the way he wields power behind the scenes and is seen by many as the very symbol of LDP corruption. At the same time, his vision of a bold new Japan active on the world stage holds broad appeal.

Finally, the coalition might succeed in passing the electoral reform to which it pledged itself. One proposal calls for 250 seats chosen from single-member districts and 250 seats chosen by proportional representation. As in U.S. congressional races, competition in single-member districts tends to reduce to two parties, but like Japan’s current single-vote/multi- seat system, proportional representation allows for a number of parties. A pure two-party system thus seems an unlikely outcome, though the parties might coalesce into two loose blocs.

Despite some similarities, Japan is not Italy, where a much more deeply ingrained pattern of economic, financial and political corruption led to a repudiation of both the existing political elite and the electoral system that produced it. Economic stagnation and popular disgust with government is endemic in the postwar world. In comparative perspective, the LDP has proved remarkably resilient. We should be wary of assuming that the whole postwar Japanese political economy has been repudiated and will soon blow away.