During the campaign for July 20’s House of Councillors election, the ruling Liberal Democratic Party’s pitch appeared more focused on past achievements than on present or future offerings. One of its campaign slogans, announced prior to the official campaign period, crystallized this notion: “We have a responsibility to govern this country.”
Claiming “responsibility” – particularly the need to safeguard the sanity of national finances – the LDP refused to campaign on a consumption tax cut, which all opposition parties supported. Instead, it limited its election pledge to a 20,000 yen (around $135) cash distribution for the entire public, while rival parties proposed more generous plans.
On the stump, Prime Minister Ishiba Shigeru raised national security as a rationale for his party’s continued leadership. Other LDP politician simply claimed they were “better” than the supposedly irresponsible opposition. The LDP appeared to bet that its long-standing dominance and surplus of credibility would be enough to sustain its hold on power.
Instead, the LDP notched its worst upper house performance since 2007, losing 13 seats and its majority. For the first time since the party’s founding, it has lost its majorities in both house of the Japanese Diet.
It’s worth keeping in mind that the disastrous upper house election in 2007 eventually resulted in the party’s ouster from power in 2009.
The election results cast serious doubt on whether the LDP’s credibility remains intact. A mix of LDP hubris and shifting public perception ultimately contributed to its electoral setback – and the rise of textbook-style populism.
Two parties with populist characteristics won big in this election: the Democratic Party For the People (DPFP) and Sanseito, which became the top two proportional ballot vote-getters after the LDP. The DPFP expanded its seats by 13; Sanseito added 14 to its upper house tally. While the parties differ in the degree of elite skepticism – the DPFP suggests that elites are too stubborn to experiment with fiscal policy, while Sanseito indulges in conspiracy theories – both succeeded in capitalizing on the public’s fear and anger during this election cycle.
The DPFP’s ongoing pledge to “raise take-home pay” resonated strongly amid persistent inflation, largely driven by the weakening yen. Sanseito has singlehandedly elevated the issue of “foreigners” – using demagoguery but striking a chord with public concern over the rise in foreign tourists and workers in the country, absent a national debate – onto the political agenda, forcing the LDP to scramble for a solution that had been low on their priority list.
So, what are the factors which contributed to the rise of populism in Japan? According to Cas Mudde and Cristóbal Rovira Kaltwasser, populism is caused when established parties act in ways that reinforce the stereotypes that elites are corrupt and unresponsive. On the issue of corruption, the LDP is still struggling to overcome the tainted image left by the political slush fund scandal, which had an overwhelming impact on last year’s lower house election. The electoral loss forced the ruling coalition into minority government status, making it impossible for the LDP to enact meaningful policy to quell the populist irritation and show the public that they are responding to their demands.
Regarding the second component of populism, elite unresponsiveness, the refusal to take drastic measure to cure inflation and the LDP’s lack of consideration of the tension between foreigners and the native population, could be factors that further soured perceptions of the LDP.
In effect, by enabling the rise of the two populist-style parties the electorate called out the LDP’s “irresponsibility.”
Even before the electoral results, the anticipated rise of parties calling for increased government spending had been already shaping the bond market. And if these trends continue, there are concerns that the LDP’s minority status in both chambers will force them to loosen their purse – which could potentially limit Japan’s bond issuing power.
The LDP bears responsibility for these consequences. To be generous, considering the still-massive national debt and the potential ballooning of future debt servicing costs – due to the Bank of Japan’s gradual approach to raising interest rates – the government’s refusal to increase spending could be seen as “responsible.” However, the LDP has failed to convince the public that this is truly the case.
To counter the worst instincts of populism, the party should respond to demands grounded in real-life concerns and remain open to forming coalitions with partners who may not see eye to eye on fiscal and monetary policy. Demonstrating responsiveness – not responsibility – is key to navigating the newly emerging populist era.