Tuesday, September 1, 2009

New Japanese Government

The New York Times reports further on what I wrote about here, the question of whether the new government headed by the Democratic Party of Japan (DPJ) will significantly change their country's economic and foreign policies.

If even the Times says that a party's economic policies are insufficiently pro-market, that must mean that they're way insufficiently pro-market.

I was incorrect in my post to which I've linked above, regarding the DPJ's position in the upper house, the House of Councillors. After making major gains in the 2007 election for some of the seats in that house, the DPJ is the largest party, but lacks an overall majority. They hold 109 of the 242 seats. Therefore, they have formed a coalition that includes the Socialists.

Even though the DPJ will have an overall majority in the lower house, the House of Representatives, they will include the Socialists and others in a coalition government. That will create further pressure to move away from free-market policies.

As I noted here, that is similar to the situation that India's Congress Party had, after it emerged from the 2004 general election as the largest party. It needed to form a coalition with Communists and other leftists, which restrained the tendency that Congress has had since the early 1990s to back pro-market reforms.

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