Japanese Prime Minister Shinzo Abe surprised the country and dissolved the lower house of parliament on November 21, 2014, calling a snap general election for December 14. In a new Q&A, James Schoff explains Abe’s move and analyzes the issues at stake. Schoff says a strong result for Abe’s party could boost the prime minister’s political capital as he pushes for key reforms, and it might spark realignment among the opposition.

Why is the election being held now?

James L. Schoff
Schoff is a senior fellow in the Carnegie Asia Program. His research focuses on U.S.-Japan relations and regional engagement, Japanese technology innovation, and regional trade and security dynamics.
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Abe says the vote, two years earlier than required, is necessary due to his recent postponement of a scheduled consumption tax hike—a decision that he says marks a watershed for his economic policy and requires input and approval from the public. More broadly, the prime minister is calling this a referendum on his so-called Abenomics approach of monetary easing, fiscal stimulus, and reform-oriented growth strategies.

Even as he argues that his economic policies are beginning to work, Abe admits that leftover negative effects from a first tax rise in April are delaying recovery. He wants more time to stimulate growth before raising taxes in 2017 as a means to reduce government debt and provide social security to Japan’s aging population.

Abe’s push for a new term can also be seen as an opportunistic political gambit that goes beyond economic policy. Relatively unpopular policies put forward by his Liberal Democratic Party (LDP) on restarting nuclear power plants and expanding Japanese defense cooperation with the United States will gain a higher profile next year, and a currently weak and disorganized political opposition in Japan could potentially strengthen as time goes on. Despite the inherent risks in any election, Abe determined that now is the best time to secure an extra two years for his party’s leadership, and the delayed consumption tax hike was a convenient excuse to press his advantage before the political environment deteriorated.

What are the most important policy issues at stake?

The vote could have important implications for Abe’s economic reforms and for his plan to broaden the mission of Japan’s Self-Defense Forces, among other pressing policy issues.

Japan’s economy officially slipped into recession in the third quarter of 2014 amid stalling private consumption and business investment, flat exports, and uneven wage growth, which were undercut by the previous tax hike and a rapidly weakening yen. The value of the yen to the dollar has tumbled more than 40 percent since Abe took office in late 2012.

A strong showing by the LDP will give Abe the political clout to push the more controversial of his economic policies, including trimming the corporate tax rate to 20 percent, facilitating corporate investment in farms to boost competitiveness and consolidation (and perhaps weaken the farm lobby), and enacting labor market reform, electricity market deregulation, and other measures. Even with victory, he might not succeed or even pursue all these reforms with sufficient determination, but a weak election performance all but guarantees inaction.

LDP success could also mean that pending legislation to expand the country’s military capabilities could become more ambitious, allowing Japan’s Self-Defense Forces to engage in a wider range of cooperative missions with the United States. Conversely, if the LDP ends up more reliant on its pacifist-minded coalition partner—the New Komeito party—then expect only modest security adjustments.

In addition, the LDP’s election performance could strengthen Abe’s political hand as the government pushes to restart nuclear reactors around the country, forge a deal with the United States as part of the Trans-Pacific Partnership trade agreement, and move forward with a national referendum on the constitution.

What is the expected election result?

A significant percentage of voters often remain undecided until the last day, but Abe’s election gamble will likely pay off with a solid victory for his party thanks to weak opposition and an election system that rewards a slightly favored party with outsized gains. Two years ago, for example, the LDP won 79 percent of the single-district seats with only 43 percent of votes in all constituencies. Moreover, the snap election has disillusioned many voters who do not see the need, so voter turnout could be historically low, to the slight benefit of the LDP and New Komeito.

Each Japanese voter will cast two ballots on election day: one for a candidate in his/her local district (totaling 295 seats), and one for a political party that counts toward seats available in eleven regional blocs (180 seats), which are divvied up proportionally among the parties based on the number of votes won in each bloc.

The LDP held 295 seats in the lower house at dissolution, and, with New Komeito’s 31 seats, their coalition had a supermajority, allowing it to override upper house decisions. The LDP is unlikely to reach that two-thirds threshold (317 seats) on its own in the December vote, but if the balance within the coalition tilts further in the party’s favor—and New Komeito tries to stymie certain security or constitutional reform legislation—Abe might instead be tempted to partner with more conservative (like-minded) small parties.

Despite the LDP’s strong showing in recent polls, I anticipate that a quiet wave of disgruntled liberal voters will be motivated enough to deliver a muddled message of dissatisfaction to Abe, either through small gains for New Komeito, the main opposition Democratic Party of Japan (DPJ), or—less productively—the Communist Party. In the end, the political landscape will probably look similar to the way it did before the election, but Abe and the LDP (with their New Komeito partner) will have won an extra two years for policy implementation, through 2018. This could be important for Japan.

What will this vote mean for Japan?

Japan’s economy is at a critical juncture. Despite some public angst over Abenomics’ mixed results to date, a rebuke of that policy without a ready alternative would be a big setback for the country.

A solid LDP/New Komeito victory would put Japan in a better position to revive the economy and improve its fiscal position. Abe’s cabinet choices will help clarify how serious he is in this regard.

A problem for Japan, however, is that LDP success would likely coincide with continued floundering and incoherence among the opposition, which is not healthy for the country’s democracy in the long term. In this sense, the election could have a notable impact on Japan’s political future. The DPJ will almost certainly look for new leadership after the election, and the party should consider dividing itself as part of a multiyear rehabilitation of the political opposition landscape, with the goal of creating centrist and liberal alternatives to the LDP’s conservative wing. The LDP has proven more adept than the DPJ at accommodating different political views within its ranks, but history suggests that this solidarity will break down over time, and both politicians and voters will benefit from viable options based on different policy views.

The size of the LDP victory and the degree to which the party still needs New Komeito to push legislation through will also help demonstrate whether Japan is actually shifting to the right, as some liberal and foreign critics claim. Nationalist candidates like retired Air Self-Defense Force General Toshio Tamogami in Tokyo’s twelfth district, for example, are attacking New Komeito for holding back the LDP’s security reforms. But if New Komeito emerges stronger at the expense of parties like Tamogami’s, Japanese voters’ aversion to right-wing arguments will be confirmed and questions about Japan’s supposed rightward drift could be settled for the time being.

What might this election mean for the United States and its alliance with Japan?

Washington generally supports Abe’s reform agenda. The United States has an economic stake in Japan’s success, as many of Tokyo’s proposed structural and regulatory reforms will likely benefit U.S. firms and exporters, along with Japan’s big multinational corporations. Getting some of Japan’s nuclear reactors back online will improve Japan’s trade balance and help reduce carbon emissions, which last year were the highest on record. U.S. policymakers will be pushing their Japanese counterparts to deliver on Abe’s growth strategy promises. They will also praise steps toward deregulation and begin to complain if the yen depreciates further.

Moreover, the U.S. policy of rebalancing to Asia relies heavily on strong and modernizing alliances in the region, and the relationship with Japan is among the most important. Geopolitically, Washington prefers a strong and stable Japan that can be an effective ally on challenging international issues and a caucus partner within multilateral institutions. The thorn in the U.S. side has been Abe’s poor relationship with neighboring leaders—in South Korea and China—exacerbated in part by the Abe cabinet’s revisionist tendencies on sensitive historical issues leftover from the early 1900s. These are not central campaign issues, but because the election could lengthen Abe’s tenure as prime minister, the result might convince Abe’s detractors that they are better off working with him than waiting him out.