As a Matter of Factions: The Budgetary Implications of Shifting Factional Control in Japan's LDP

Abstract:     
For 38 years, the Liberal Democratic Party (LDP) maintained single-party control over the Japanese government. This lack of partisan turnover in government has frustrated attempts to explain Japanese government policy changes using political variables. In this paper, we look for intraparty changes that may have led to changes in Japanese budgetary policy. Using a simple model of agenda-setting, we hypothesize that changes in which intraparty factions "control" the LDP affect the party's decisions over spending priorities systematically. This runs contrary to the received wisdom in the voluminous literature on LDP factions, which asserts that factions, whatever their raison d'être, do not exhibit different policy preferences. We find that strong correlations do exist between which factions comprise the agenda-setting party "mainstream" and how the government allocates spending across pork-barrel and public goods items.

Number of Pages in PDF File: 55

Keywords: Liberal Democratic Party, Japan, budgetary policy, public goods, pork-barrel

JEL Classification: H61, N45, H41, H42

Accepted Paper Series