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 conventional wisdom expressed in the voluminous literature on LDP factions, which asserts that factions, whatever their raison d'etre, 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.