Factions and the Redistributive Effects of Reform in Japan
| Published date | 01 November 2024 |
| DOI | http://doi.org/10.1177/14789299231220538 |
| Author | Matthew M Carlson,Masaki Nakabayashi |
| Date | 01 November 2024 |
https://doi.org/10.1177/14789299231220538
Political Studies Review
2024, Vol. 22(4) 948 –966
© The Author(s) 2024
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DOI: 10.1177/14789299231220538
journals.sagepub.com/home/psrev
Factions and the Redistributive
Effects of Reform in Japan
Matthew M Carlson1 and
Masaki Nakabayashi2
Abstract
Campaign finance and other political reforms often have redistributive consequences when they
improve the position of one group over another. When potentially redistributive reforms are
debated or passed, groups may resist or support such reforms depending on their belief about
whether the reforms will be advantageous or not to their own position. In dominant party systems
such as Japan, we expect that major reforms will have heterogeneous effects for different factions
within Japan’s Liberal Democratic Party (LDP). In 1975 and 1994, reformers in Japan introduced
major changes that they hoped would reduce corruption and strengthen political parties over
factions. In this article, we empirically investigate the asymmetrical impact of the reforms on the
total amount of revenue and contributions disclosed by factions in the LDP. We find that the 1975
reform had significant redistributive effects, including a relatively adverse impact on the faction
linked to Tanaka Kakuei in terms of total revenue. The 1994 reforms, in contrast, reveal that the
Tanaka faction did the best among the factions in collecting revenues and consolidating its power.
Keywords
factions, campaign finance, reforms, Japan, Liberal Democratic Party
Accepted: 24 November 2023
Introduction
Campaign finance reform is commonly viewed as a remedy for reducing corrupt
incentives of entrepreneurial parties and politicians (Alexander, 1984; Fisman and
Golden, 2017; Rose-Ackerman, 1999). Reformers may introduce new regulations to
tighten the flow of money and to differentiate the boundaries between legal and illicit
actions. Limits on political contributions given to parties or candidates are a common
control strategy. Transparency-inducing measures such as disclosure requirements are
likewise introduced to enhance accountability and to counter secrecy. Research on the
1Department of Political Science, The University of Vermont, Burlington, VT, USA
2Institute of Social Science, The University of Tokyo, Bunkyo, Tokyo, Japan
Corresponding author:
Matthew M Carlson, Department of Political Science, The University of Vermont, Burlington, VT 05405,
USA.
Email: Matthew.Carlson@uvm.edu
1220538PSW0010.1177/14789299231220538Political Studies ReviewCarlson and Nakabayashi
research-article2024
Article
Carlson and Nakabayashi 949
causes and consequences of such reforms is necessary to investigate the facts and pro-
vide a “a crucial foundation for efforts to contain the abuses that are always liable to
occur wherever competitive elections are held and organized political parties exist”
(Pinto-Duschinsky, 2002: 85).
In a study examining the costs of political competition in 18 countries based on esti-
mates culled from the late 1990s, Japan ranked as one of the most excessive spenders
along with Austria, Israel, Italy, and Mexico (Nassmacher, 2009: 119). His statistical
analysis for these 18 countries showed that one-party dominance and political competi-
tion during election years increased levels of party spending. The existence and conse-
quences of dominant parties has attracted considerable scholarly attention in the study of
democracies and authoritarian systems (see, for example, Carty, 2022; Friedman and
Wong, 2008; Higashijima, 2022; Pempel, 1990). Current or former examples of countries
with dominant parties include such places as Italy, Israel, Japan, Mexico, Sweden, South
Africa, Botswana, Ireland, and Canada. Many case studies have generally concluded that
factionalism flourishes in countries that have dominant parties. In this article, we borrow
upon insights from institutional and redistributive theories and analyze the heterogeneous
effects of major campaign finance and political reforms on different factions within
Japan’s dominant Liberal Democratic Party (LDP).
In a review of the literature on political finance in comparative perspective, Scarrow
(2007: 206) acknowledges the need to study individual countries to examine how politi-
cal finance practices evolve over time. This article focuses on the consequences of cam-
paign finance reforms in the 1970s and 1990s on major LDP factions. Interparty factions
in Japan are one of the most critical aspects of national politics (Köllner, 2004; Park,
2001). Factions within the LDP determined who became prime minister, assisted indi-
viduals in winning elections, and served as a mechanism for distributing party and gov-
ernment positions. However, the functions of factions have changed over time and in
response to two major institutional reforms detailed in this article. It is important to exam-
ine the effects of these changes on factions given the significant interest in the study of
formal and informal institutions and institutional change (Aoki, 2001; North, 1990).
A common approach in the study of political finance is to focus on a single country and
examine how political finance practices have changed over time. Scholars have focused
on major campaign finance reforms such as the U.S. 2002 Bipartisan Campaign Reform
Act (La Raja, 2008; Malbin, 2006); Britain’s Political Parties, Elections and Referendums
Act 2000 (Clift and Fisher, 2004); or South Africa’s 1997 Public Funding of Represented
Political Parties Act (Calland, 2016). Such studies typically analyze and compare the
period before the reform with the period after with considerable attention focusing on the
causes of the reform as well as its impact on the party system or specific political parties.
Building upon these studies, we focus on understanding possible redistributive conse-
quences of Japan’s major reform efforts and the challenges of enacting reform in a domi-
nant party system with a highly factionalized dominant party.
The two most significant political reforms in Japan are the 1975 and 1994 reforms
examined in this article. The 1975 reforms changed the Political Funds Control Law
(PFCL) of 1948, the main law that governs money in politics. The impetus for the reform
was corruption linked to a former prime minister and the determination of a reformer to
pass significant revisions of the PFCL despite considerable objections within the ruling
party. The 1994 reforms passed after the LDP lost power in 1993 to a coalition govern-
ment. The reforms consisted of a new election system, revision of the PFCL, and a sub-
sidy system for political parties. We seek to understand the consequences of these reforms
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