Welfare and Capitalism in Postwar Japan: Party, Bureaucracy, and Business (Cambridge Studies in Comparative Politics)

This book explains how postwar Japan managed to achieve a highly egalitarian form of capitalism despite meager social spending. Estevez-Abe develops an institutional, rational-choice model to solve this puzzle. She shows how Japan's electoral system generated incentives that led political actors to protect, if only for their own self-interested reasons, various groups that lost out in market competition. She explains how Japan's postwar welfare state relied upon various alternatives to orthodox social spending programs. The initial postwar success of Japan's political economy has given way to periods of crisis and reform. This book follows this story up to the present day. Estevez-Abe shows how the current electoral system renders obsolete the old form of social protection. She argues that institutionally Japan now resembles Britain and predicts that Japan's welfare system will also come to resemble Britain's. Japan thus faces a more market-oriented society and less equality. Cover......Page 1 Half-title......Page 3 Title......Page 7 Copyright......Page 8 Dedication......Page 9 Contents......Page 11 Tables, Figures, and Appendices......Page 12 Acknowledgments......Page 15 THE REAL VARIETIES OF WELFARE CAPITALISM......Page 19 THE STRUCTURAL LOGIC APPROACH......Page 22 Partisanship-Based Models of Welfare Politics......Page 24 Cross-Class Alliance Model of Welfare Politics......Page 25 Institutionalist Models of Welfare Politics......Page 27 The Structural Logic Approach......Page 29 VARIATIONS WITHIN JAPAN: CROSS-ISSUE AND HISTORICAL VARIATIONS......Page 31 CONTRIBUTIONS AND THE ORGANIZATION OF THE BOOK......Page 34 1 Rashomon: The Japanese Welfare State in a Comparative Perspective......Page 37 JAPAN’S WORK-BASED SOCIAL PROTECTION......Page 38 JAPAN’S FUNCTIONALLY EQUIVALENT PROGRAMS......Page 48 SAVINGS-ORIENTED SOCIAL PROTECTION......Page 59 THE REAL VARIETIES OF WELFARE CAPITALISM......Page 63 2 Structural Logic of Welfare Politics......Page 69 District Magnitude......Page 71 Party Vote vs. Personal Vote......Page 74 STRUCTURAL LOGIC OF WELFARE POLITICS......Page 77 Government Types and Distributive Implications......Page 78 Predicting Different Patterns of Structural Logic of Social Protection......Page 80 ACCOUNTING FOR CROSS-NATIONAL VARIATIONS IN SOCIAL PROTECTION: PRELIMINARY EVIDENCE......Page 83 SMD/Majority Party Government/Strong Party......Page 84 MMD/Minority Government/Strong Party......Page 87 MMD/Coalition or Majority Party Government/Weak Party......Page 88 Four Types of Welfare Capitalism......Page 89 Interest Groups as Corporatist Veto Players......Page 90 Bureaucratic Veto Players......Page 91 Bureaucratic Preferences......Page 92 CONCLUSION......Page 94 3 Historical Patterns of Structural Logic in Postwar Japan......Page 95 Historical Shifts in the Government Type......Page 96 Changes in the District Magnitude and the Personal Vote......Page 98 Four Distinctive Periods in Postwar Japan......Page 100 STRUCTURAL LOGIC UNDER THE CONSERVATIVE DOMINANCE (1951–1989)......Page 101 Electoral Incentives of Conservative Politicians......Page 103 Weak Party Leader and the Decentralized Decision-Making Process......Page 104 LEGISLATIVE RULES, BUREAUCRATS, AND THEIR PREFERENCES......Page 108 Rules of Delegation – Bureaucratic Agenda-Setting Power......Page 109 Bureaucratic Preferences and Social Protection......Page 111 Post-1989 “Partial Minority Government”: New Universalistic Tendencies......Page 114 The Post-1993 Coalition Governments: Becoming like a Continental European Welfare State......Page 115 The Post-1996 Structural Logic: Becoming like a British Welfare State?......Page 116 CONCLUSION......Page 118 4 The Rise of the Japanese Social Protection System in the 1950s......Page 120 JAPAN’S NASCENT UNIVERSALISM UNDER THE ALLIED OCCUPATION (1945–1951)......Page 121 Public Assistance and Unemployment Insurance......Page 123 Limits of Bureaucratic Initiatives......Page 127 THE EROSION OF THE NASCENT UNIVERSALISM IN THE 1950S......Page 129 Welfare Benefits as Selective Incentives for Voter Mobilization and Organization......Page 130 Political Exchange and Other Societal Groups......Page 134 FRAGMENTATION OF PENSION PROGRAMS......Page 137 Failure to Expand the Employee Pension Benefits......Page 138 Electoral Calculations and Fragmentation......Page 141 Targeted Functional Equivalents Rather than Generous Unemployment Benefits for Every Worker......Page 143 Responding to Particularistic Groups: Japan’s Housing Policy......Page 145 BUREAUCRATIC PREFERENCES AND POWER......Page 148 Appendix 4.A Chronology of Tax Expenditures......Page 152 5 Economic Growth and Japan’s Selective Welfare Expansion......Page 156 BEYOND THE EXISTING EXPLANATIONS......Page 157 THE IRONY OF THE ALL NATION INSURANCE (KAIHOKEN)......Page 159 The Creation of the National Pension System: The “Trickling Up” from Local to National......Page 160 Delivering Targeted Benefits to Farmers......Page 163 All Nation Insurance in Health Care in 1961......Page 165 THE UNEVEN EXPANSION OF BENEFITS FOR WAGE EARNERS (MID-1960S TO 1974)......Page 168 New Labor Market Conditions and Employers’ New Preferences......Page 169 The LDP’s Continuing Unwillingness to Pay for Wage Earners’ Benefits......Page 172 Children’s Allowance......Page 180 Free Medical Care for the Elderly......Page 183 CONCLUSION......Page 184 6 Institutional Complementarities and Japanese Welfare Capitalism......Page 186 LIFETIME EMPLOYMENT AND JAPAN’S WORK-BASED SOCIAL PROTECTION......Page 189 Penalty against Job Hoppers......Page 191 Attracting Better Workers for Less......Page 194 COOPERATIVE INDUSTRIAL RELATIONS AND JOB PROTECTION......Page 199 Creating Cooperative Workers......Page 200 Protecting Job Security......Page 203 Creating Patient Capital: Uncapitalist Capital?......Page 205 Reinforcing Mochiai......Page 207 Socialization of Capital and Japan’s Small Tax State......Page 210 JAPAN’S WELFARE CAPITALISM......Page 215 7 The Emergence of Trouble in the 1970s......Page 217 THE UNRAVELING OF INSTITUTIONAL VULNERABILITIES......Page 219 Problems of Older Workers......Page 221 Problems in the Revenue Structure......Page 223 Rising Welfare Costs......Page 225 REFORM ATTEMPTS IN THE LATE 1970S......Page 227 REFORMS IN THE 1980S......Page 234 CONCLUSION: LIMITS OF REFORM......Page 239 8 Policy Shifts in the 1990s: The Emergence of European-Style Welfare Politics......Page 242 THE NEW PRO-WELFARE ENVIRONMENT UNDER THE PARTIAL MINORITY GOVERNMENT......Page 243 Opportunities for the Ministry of Welfare under the New Veto Player Configuration......Page 247 Opportunities and Constraints for the Ministry of Labor......Page 249 THE NON-LDP COALITION GOVERNMENTS UNDER THE MMN/SNTV SYSTEM......Page 252 The Angel Plan......Page 255 Employment Insurance Reform......Page 256 New Initiatives for Frail Elderly Care......Page 259 THE LDP-LED COALITION GOVERNMENTS UNDER MMD/SNTV (JUNE 1994–NOVEMBER 1996)......Page 260 Family Care Leave: An Unusually Swift Legislation......Page 262 Long-term Care Insurance......Page 265 CONCLUSION......Page 269 9 The End of Japan’s Social Protection as We Know It: Becoming Like Britain?......Page 272 THE ELECTORAL REFORM AND THE PARTY CENTRALIZATION OF THE LDP......Page 273 LEGISLATIVE RULE CHANGES AND THE STRONGER PRIME MINISTER......Page 278 IS POST-REFORM JAPAN A WESTMINSTER SYSTEM OR NOT?......Page 282 Japan’s Strong Bicameralism......Page 284 Coalition Governments under the SMD-Dominant System......Page 286 A Modified Westminster System in the 1996–2007 Period......Page 288 POLICY OUTCOMES: EVIDENCE OF POLICY CHANGE UNDER THE NEW STRUCTURAL LOGIC......Page 289 Retrenchment of Market-Restricting Targeted Protection......Page 290 More Universalistic – but Meager – Benefits......Page 295 A Shift to Market-Based Savings Programs......Page 299 CONCLUSION......Page 302 Conclusion: Two Future Scenarios......Page 305 Bibliography......Page 315 Index......Page 347 Cover 1 Half-title 3 Title 7 Copyright 8 Dedication 9 Contents 11 Tables, Figures, and Appendices 12 Acknowledgments 15 Introduction 19 THE REAL VARIETIES OF WELFARE CAPITALISM 19 THE STRUCTURAL LOGIC APPROACH 22 EXPLAINING WELFARE STATES 24 Partisanship-Based Models of Welfare Politics 24 Cross-Class Alliance Model of Welfare Politics 25 Institutionalist Models of Welfare Politics 27 The Structural Logic Approach 29 VARIATIONS WITHIN JAPAN: CROSS-ISSUE AND HISTORICAL VARIATIONS 31 CONTRIBUTIONS AND THE ORGANIZATION OF THE BOOK 34 1 Rashomon: The Japanese Welfare State in a Comparative Perspective 37 JAPAN’S WORK-BASED SOCIAL PROTECTION 38 JAPAN’S FUNCTIONALLY EQUIVALENT PROGRAMS 48 SAVINGS-ORIENTED SOCIAL PROTECTION 59 THE REAL VARIETIES OF WELFARE CAPITALISM 63 2 Structural Logic of Welfare Politics 69 PARLIAMENTARY VETO PLAYERS’ ELECTORAL CALCULATIONS 71 District Magnitude 71 Party Vote vs. Personal Vote 74 STRUCTURAL LOGIC OF WELFARE POLITICS 77 Government Types and Distributive Implications 78 Predicting Different Patterns of Structural Logic of Social Protection 80 ACCOUNTING FOR CROSS-NATIONAL VARIATIONS IN SOCIAL PROTECTION: PRELIMINARY EVIDENCE 83 SMD/Majority Party Government/Strong Party 84 MMD/Coalition Government/Strong Party 87 MMD/Minority Government/Strong Party 87 MMD/Coalition or Majority Party Government/Weak Party 88 Four Types of Welfare Capitalism 89 ADDITIONAL LAYERS OF COMPLEXITY: NONPARLIAMENTARY (CORPORATIST AND BUREAUCRATIC) VETO PLAYERS 90 Interest Groups as Corporatist Veto Players 90 Bureaucratic Veto Players 91 Bureaucratic Preferences 92 CONCLUSION 94 3 Historical Patterns of Structural Logic in Postwar Japan 95 FOUR HISTORICAL PERIODS 96 Historical Shifts in the Government Type 96 Changes in the District Magnitude and the Personal Vote 98 Four Distinctive Periods in Postwar Japan 100 STRUCTURAL LOGIC UNDER THE CONSERVATIVE DOMINANCE (1951–1989) 101 Electoral Incentives of Conservative Politicians 103 Weak Party Leader and the Decentralized Decision-Making Process 104 LEGISLATIVE RULES, BUREAUCRATS, AND THEIR PREFERENCES 108 Rules of Delegation – Bureaucratic Agenda-Setting Power 109 Bureaucratic Preferences and Social Protection 111 STRUCTURAL SHIFTS SINCE 1989 114 Post-1989 “Partial Minority Government”: New Universalistic Tendencies 114 The Post-1993 Coalition Governments: Becoming like a Continental European Welfare State 115 The Post-1996 Structural Logic: Becoming like a British Welfare State? 116 CONCLUSION 118 4 The Rise of the Japanese Social Protection System in the 1950s 120 JAPAN’S NASCENT UNIVERSALISM UNDER THE ALLIED OCCUPATION (1945–1951) 121 Public Assistance and Unemployment Insurance 123 Limits of Bureaucratic Initiatives 127 THE EROSION OF THE NASCENT UNIVERSALISM IN THE 1950S 129 Welfare Benefits as Selective Incentives for Voter Mobilization and Organization 130 Political Exchange and Other Societal Groups 134 FRAGMENTATION OF PENSION PROGRAMS 137 Failure to Expand the Employee Pension Benefits 138 Electoral Calculations and Fragmentation 141 FAVORING FUNCTIONAL EQUIVALENTS: UNEMPLOYMENT AND HOUSING 143 Targeted Functional Equivalents Rather than Generous Unemployment Benefits for Every Worker 143 Responding to Particularistic Groups: Japan’s Housing Policy 145 BUREAUCRATIC PREFERENCES AND POWER 148 CONCLUSION 152 Appendix 4.A Chronology of Tax Expenditures 152 5 Economic Growth and Japan’s Selective Welfare Expansion 156 BEYOND THE EXISTING EXPLANATIONS 157 THE IRONY OF THE ALL NATION INSURANCE (KAIHOKEN) 159 The Creation of the National Pension System: The “Trickling Up” from Local to National 160 Delivering Targeted Benefits to Farmers 163 All Nation Insurance in Health Care in 1961 165 THE UNEVEN EXPANSION OF BENEFITS FOR WAGE EARNERS (MID-1960S TO 1974) 168 New Labor Market Conditions and Employers’ New Preferences 169 The LDP’s Continuing Unwillingness to Pay for Wage Earners’ Benefits 172 THE “TRICKLING UP” OF UNIVERSALISTIC PROGRAMS: THE CHILDREN’S ALLOWANCE AND THE FREE MEDICAL CARE FOR THE ELDERLY 180 Children’s Allowance 180 Free Medical Care for the Elderly 183 CONCLUSION 184 6 Institutional Complementarities and Japanese Welfare Capitalism 186 LIFETIME EMPLOYMENT AND JAPAN’S WORK-BASED SOCIAL PROTECTION 189 Penalty against Job Hoppers 191 Attracting Better Workers for Less 194 COOPERATIVE INDUSTRIAL RELATIONS AND JOB PROTECTION 199 Creating Cooperative Workers 200 Protecting Job Security 203 Socialization of Capital 205 Creating Patient Capital: Uncapitalist Capital? 205 Reinforcing Mochiai 207 Socialization of Capital and Japan’s Small Tax State 210 JAPAN’S WELFARE CAPITALISM 215 7 The Emergence of Trouble in the 1970s 217 THE UNRAVELING OF INSTITUTIONAL VULNERABILITIES 219 Problems of Older Workers 221 Problems in the Revenue Structure 223 Rising Welfare Costs 225 “Market-Restricting” Mode of Social Protection 227 REFORM ATTEMPTS IN THE LATE 1970S 227 REFORMS IN THE 1980S 234 CONCLUSION: LIMITS OF REFORM 239 8 Policy Shifts in the 1990s: The Emergence of European-Style Welfare Politics 242 THE NEW PRO-WELFARE ENVIRONMENT UNDER THE PARTIAL MINORITY GOVERNMENT 243 Opportunities for the Ministry of Welfare under the New Veto Player Configuration 247 Opportunities and Constraints for the Ministry of Labor 249 THE NON-LDP COALITION GOVERNMENTS UNDER THE MMN/SNTV SYSTEM 252 New Bureaucratic Opportunities under the Non-LDP Coalitions 255 The Angel Plan 255 Employment Insurance Reform 256 New Initiatives for Frail Elderly Care 259 THE LDP-LED COALITION GOVERNMENTS UNDER MMD/SNTV (JUNE 1994–NOVEMBER 1996) 260 Family Care Leave: An Unusually Swift Legislation 262 Long-term Care Insurance 265 CONCLUSION 269 9 The End of Japan’s Social Protection as We Know It: Becoming Like Britain? 272 THE ELECTORAL REFORM AND THE PARTY CENTRALIZATION OF THE LDP 273 LEGISLATIVE RULE CHANGES AND THE STRONGER PRIME MINISTER 278 IS POST-REFORM JAPAN A WESTMINSTER SYSTEM OR NOT? 282 Japan’s Strong Bicameralism 284 Coalition Governments under the SMD-Dominant System 286 A Modified Westminster System in the 1996–2007 Period 288 POLICY OUTCOMES: EVIDENCE OF POLICY CHANGE UNDER THE NEW STRUCTURAL LOGIC 289 Retrenchment of Market-Restricting Targeted Protection 290 More Universalistic – but Meager – Benefits 295 A Shift to Market-Based Savings Programs 299 CONCLUSION 302 Conclusion: Two Future Scenarios 305 Bibliography 315 Index 347 Rashomon: The Japanese Welfare State In A Comparative Perspective -- Structural Logics Of Welfare Politics -- Historical Patterns Of Structural Logic In Postwar Japan -- The Rise Of The Japanese Social Protection System In The 1950s -- Economic Growth And Japan's Selective Welfare Expansion -- Institutional Complemetarities And The Japanese Welfare Capitalism -- The Emergence Of Trouble In The 1970s -- Policy Shifts In The 1990s: The Emergence Of European-style Welfare Politics -- The End Of Japan's Social Protection As We Know It: Becoming Like Britain? Margarita Estévez-abe. Includes Bibliographical References (p. 297-327) And Index. This work explains how postwar Japan managed to achieve a highly egalitarian form of capitalism despite meager social spending. Estevez-Abe develops an institutional, rational-choice model to solve this puzzle