Japan’s Land Price System

My name was attached to the Sept. 26 Op-Ed article “Japan’s Big Bubble Is Sure to Burst.� Because it does not accurately represent my view on the subject, I would like to clarify my position.

First, I don’t agree that a land price crash in Japan is an economic inevitability. The Japanese system has numerous ways to deal with tough economic problems.

Second, my primary interest is in the political consequences of the land price hike and why the increasing wealth disparity in Japan due to skyrocketing land prices has not become a great political liability for the Liberal Democratic Party (LDP). The reason no political party has yet been (or will soon be) able to capitalize on the expensive-land problem is that the LDP manages to reduce the salience of issues at election time.

For the LDP to maintain a majority in the lower house, LDP candidates have to compete against each other in most electoral districts. As a result, the LDP cannot run a national campaign on the basis of a party platform. Each LDP member must instead develop a personal following on the basis of services--budgetary searches, sake bottles at local festivals, etc. In addition, the opposition parties are not well positioned to take advantage of the LDP’s exposure on the land issue. The Socialists are trying to make inroads into the agricultural vote, which weakens their resolve to push for radical solutions that hurt land-rich farmers. The Democratic Socialists rely substantially on the small business vote, a group that also owns land and hence benefits from high land prices. The Communist Party is regarded as too far on the fringe on most issues for most voters, even if a growing number of voters appreciates the party’s support for the asset-less groups in society. Similarly, the Komeito, which ostensibly represents non-unionized urban voters, is too closely associated with the zealous Soka Gakkai sect of Nichiren Buddhism to appeal to a much wider electorate.

Only now as demographics increasingly favor difficult-to-organize urban voters, as big business supporters are increasingly dissatisfied with the expense of the system and as U.S. anger about Japanese protectionism is on the rise is the LDP seriously contemplating ditching this pork-for-votes electoral system. But even if the LDP adopts a new electoral system that features a more economical inter-party competition on the basis of party platforms, it will take some time for the opposition parties to recalibrate their strategies.

In short, the LDP still lacks sharp electoral competition from other parties, partly due to its savvy adaptation to the electoral system and partly because of the organizational lassitude of the opposition. So I expect the LDP to muddle through with this problem, as it has in the past.

FRANCES ROSENBLUTH

Assistant Professor

Graduate School of International

Relations and Pacific Studies

UC San Diego