Straightening the Twisted Diet

Examples and Problems of the “Twisted” Phenomenon

It is not unusual for the game of Chicken to appear in a political arena. Under a bicameral system, it goes without saying that there can be different majorities among the two Houses. Even under a unicameral system, a Chicken game can emerge in the policymaking process when no party is able to secure a majority. Further, in the event that public office leadership (such as governor or president) is elected directly by residents or citizens, there is no guarantee that the House majority and the party of said leadership would be the same.

In fact, in other countries with coalition governments it is not uncommon for administrations to fall into crisis when the ruling parties push forward different policy. In the US and France, for example, there are past examples of the Congress/Parliament majority and the party of government leadership being different, a situation that affected budgets, personnel, and foreign diplomacy. Even in Japan, there are recent cases of clashing between the prefectural congress and governor such as in Nagano and Shiga Prefectures.

Alesina and Drazen (1991), among others, note that such conflict between those holding power (particularly veto power) can easily lead to a delay in decision-making and postponement of policymaking (increase in government spending and budget deficit). Moreover, there is research that concludes that coalition governments are typical under proportional-representation, and while one-party majorities are common in small-constituency systems, power struggles among the ruling parties are fiercer in the former which can easily lead to budget deficits. There is also an experimental study which shows that budget deficits are prone to emerge when the congress majority of a US state and the party of the state governor are not the same. In Japan, it has been pointed out that a conflict of interest among creditors coupled with clashing political forces played a part in the delay of bad loan disposal in the 90s.

Avoiding Postponement

What can be done to avoid such delay?

One clue towards a solution is that it becomes easier to resolve the problem when there are customs if not rules regarding who will concede first. Customs such as the “zipper” merging of highway lanes during traffic, or which side on an escalator to clear for a person in hurry (this differs among the Kanto and Kansai regions of Japan) can also prevent trouble and contribute greatly to early resolution of the problem.

A state of “cohabitation”, where the president and prime minister are from separate parties, has occurred three times under the French Fifth Republic. Protracting the resolution of problems has been avoided by placing the president primarily in charge of the military and foreign diplomacy, and the prime minister in charge of domestic affairs.

Conversely, in the absence of such customs problem resolution is delayed. In both Japan and Northern Europe, the problem of bad loans emerged during a transitional period of financial liberalization. For better or worse, there is a side of financial liberalization that breaks traditional customs, and it is easy for bad loans to emerge while waiting for new rules and customs to be established. Customs and rules for problem resolution are not adequate with regards to the securitization of financial products, and there is a possibility that this is prolonging the current subprime problem.

One welcome byproduct of the “twisted Diet” is that issues in national politics have been highlighted. On the other hand, the delaying of problem resolution and the fact that decisions are not being made during the appropriate period represent a significant problem. There have been cases of “twisted Diets” emerging between the Lower and Upper Houses in the past, but they are an anomaly in postwar Japanese politics and customs and rules have not necessarily applied. In any event, as long as the bicameral system is preserved there is a distinct possibility that the Houses will again fall into conflict. Politicians are called upon to create new, bipartisan rules and customs that will respond to the new situation, and overcome such conflict and turn discussion into concrete solutions.