Policy Brief

Poverty and Politics: Evaluating Public Assistance in Japan

by Professor Ulrike Schaede with Kuniaki Nemoto

Brief prepared by Joyce Lawrence, MPIA 2008

Click here to access this as a PDF.

Looking at poverty relief, Japan spends only .2% of GDP, compared to .5% in the U.S. and Germany and .6% in Sweden.

Japan is often described as a “welfare society,” but in the working paper Poverty and Politics: Evaluating Public Assistance in Japan, IR/PS faculty member Ulrike Schaede and her co-author, Ph.D. student Kuniaki Nemoto show that Japan lags behind when it comes to assistance for the poor. Most analyses of Japanese welfare have focused on the large pension and health care systems, which are at similar levels to the welfare states of Europe. However, looking at poverty relief, Japan spends only .2% of GDP, compared to .5% in the U.S. and Germany and .6% in Sweden. This difference has both political and socio-cultural origins.

Welfare assistance began in Japan in 1875 with a modest program offering food assistance to children, the elderly, and the disabled. After years of minimal assistance, the 1960s saw a significant increase in welfare through private employers (lifetime employment, company health support, etc.). Gradually, the criteria for poverty relief in Japan has become based on economic need, but even now the law emphasizes that government transfers must be supplemental--a last resort intended for people whose families cannot support them. Citizens must meet criteria based on their financial assets, capacity to work, other benefits (pensions) received, and support from their family members.

Poverty alleviation is one tool that governments can use to gain support or reduce unrest. In Japan, although poverty assistance has been minimal, spending on poverty relief and the number of citizens benefiting have varied over time. Schaede and Nemoto argue that the changes in poverty relief can partially be explained by political factors, specifically by the number of seats held by the more conservative Liberal Democratic Party (LDP) in the Diet (the legislature). The LDP has maintained a majority in the Diet for most of the post-1945 period, but there have been fluctuations in the number of seats it has held. The authors found, “Politics is a significant determinant for public assistance spending, as we find changes in public assistance expenditure and coverage when LDP politicians are more eager to gather support from the poor, namely after poor showings in elections.”

There is a strong relationship between the LDP losing seats and an increase in both total spending on poverty and the number of recipients. The authors propose two explanations. First, after disappointing election results, the LDP may change its policy on poverty assistance to increase the chances of getting votes from poor voters. Second, with a weakened position in the Diet, the LDP may have to give concessions to other parties during budget negotiations that lead to poverty relief expansion.

Unlike other “welfare states,” Japan’s poverty assistance is not an automatic reaction to economic hardship or a method to reduce inequality. It is constrained by the political process and the belief that the family is responsible for providing support to those in need. The LDP finds poverty assistance to be a useful political strategy when the party’s position in the legislature is relatively weaker.