Economic Policy Trilemma and Longevity of a Political Party

• In Event: Partisan Politics and Policymaking in Japan

Abstract

Democracies tend to experience changes in the governing party to adapt to the structural changes in international economic relations and domestic industrial developments, while some countries see a party stay in the governing position for a long time. Such longevity of a governing party is even more puzzling when the country struggles with economic stagnation like in the case of Japan since the mid-1990s. How has the Liberal Democratic Party (LDP) managed to stay in power in economic hard times for so long? We argue that the LDP weakens opposition parties by co-opting their innovative policy proposals, thus exploiting the opposition parties’ own policy space and producing less competitive elections. In economic stagnation, the economic policy choice comes down to conventional growth strategy, distribution, and fiscal discipline, creating a trilemma where the government can pursue only two of these three goals. The LDP has managed to exploit policy space for the opposition parties under the trilemma. To empirically capture the changes in policy goals, we apply Keyword Assisted Topic Models to the economic policy debate data in the Diet from the late 1960s to 2022, quantifying the share of each policy goal in the debates. This study reveals the effectiveness of the LDP’s economic strategy in the face of economic policy trilemma, suggesting incumbent party’s co-optation strategies could lead to democratic erosion, with implications for other established democracies.

Authors

• Saori N. Katada, University of Southern California

• Kenya Amano, Harvard University