One World of Welfare: Japan in Comparative Perspective 9781501726637

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ONE WORLD OF WELFARE

A volume in the series

CORNELL STUDIES IN POLITICAL ECONOMY edited by Peter J. Katzenstein

A full list of titles in the series appears at the end of the book

ONE wo @ELFARE

JAPAN IN COMPARATIVE PERSPECTIVE

GREGORY J. KASZA

Cornell University Press Ithaca and London

Copyright © 2006 by Cornell University All rights reserved. Except for brief quotations in a review, this book, or parts thereof, must not be reproduced in any form without permission in writing from the publisher. For information, address Cornell University Press, Sage House, 512 East State Street, Ithaca, New York 14850. First published 2006 by Cornell University Press Printed in the United States of America Library of Congress Cataloging-in-Publication Data Kasza, Gregory James. One world of welfare :Japan in comparative perspective I Gregory ]. Kasza. p. cm.-(cornell studies in political economy) Includes bibliographical references and index. ISBN-13: 978-0-8014-4420-3 (cloth: alk. paper) ISBN-10: 0-8014-4420-9 (cloth: alk. paper) 1. Public welfare-Japan. 2. Welfare state-Japan. 3. JapanSocial policy. I. Title. II. Series. HV413.K33 2006 330.12'6-dc22 2006001674 Cornell University Press strives to use environmentally responsible suppliers and materials to the fullest extent possible in the publishing of its books. Such materials include vegetable-based, low-VOC inks and acid-free papers that are recycled, totally chlorine-free, or partly composed of nonwood fibers. For further information, visit our website at www.cornellpress.cornell.edu. Cloth printing

10 9 8 7 6 5 4 3 2 1

For Kosukc Kasza and Taisuke Kasza

CONTENTS

Acknowledgments Introduction

lX

1

1. Anticipatory Modernization: A Comparative Overview of Welfare State Development

10

2. War and Welfare Policy

31

3. Developmental State or Welfare State? A Comparative Analysis of Postwar Welfare Expenditures

4. A "Unique Welfare Society"? A Comparative Analysis of Policy Substance

5. Area Studies and Policy Research: The Quest for an East Asian Welfare Model

54 81 113

6. An Anomaly in the Realm of Welfare Regimes?

135

7. Convergence or Diversity? The Case for International Diffusion

156

Index

183

ACKNOWLEDGMENTS

Research for this book was supported by a professional fellowship from the Japan Foundation and an Abe Fellowship from the Center for Global Partnership and Social Science Research Council. Without their generosity, the fieldwork required to do a project such as this would be impossible. I spent two extended periods doing research at Hitotsubashi University in Tokyo. Taketoshi Yamamoto was my sponsor at the university's School of Social Studies in 1996-1997, and Tamotsu Nishizawa was my sponsor at the Economics Research Institute during 2002. Many thanks to these scholars and to the superb librarians at Hitotsubashi, who were of tremendous help. Susan Pharr and Frank Schwartz acted as my hosts at Harvard University's Program on U.S.-Japan Relations in the spring of 2003; and Roger Goodman, Ann Waswo, and]. A. A. Stockwin assisted my work at Oxford University's Nissan Institute for Japanese Studies and St. Antony's College in the summer of 2003. I profited greatly from the stimulating intellectual environments and bountiful resources of these institutions. I owe special thanks to John Creighton Campbell and Peter Katzenstein for their extensive and insightful comments on the manuscript. John's pathbreaking research on Japanese welfare policy, his kindness in providing introductions and guidance, and his detailed notes on the original draft all made vital contributions to my work. Peter's critical reflections led me to rethink and improve key parts of the argument, and he delivered them striking a perfect balance between diplomacy and honesty. He is the ideal academic editor. Roger Goodman, Scott Kennedy, and Martin Seeleib-Kaiser read the entire manuscript and provided extremely valuable comments from their different scholarly perspectives. Others who offered helpful criticism or bibliographical assistance on various parts of the project were Ronald Dore, Yoshinori Hiroi, Toshio Iyotani,

Acknowledgments

x

Tetsuro Kato, Philip Manow, Ry6shin Minami, Tamotsu Nishizawa, Paul Pierson, Takako Sodei, David Strang, Kotara Tanaka, Ezra Vogel, and Shiro Yamasaki. Needless to say, I alone am responsible for the book's contents. Chapter 2 was previously published as "War and Welfare Policy in Japan," ·Journal of Asian Studies 61.2 (May 2002): 417-35. Part of chapter 6 previously appeared as "The Illusion of Welfare 'Regimes'," Journal of Social Policy 31.2 (April 2002): 271-87.

ONE WORLD OF WELFARE

INTRODUCTION

Welfare policy is the foremost topic of public concern in Japan. When asked in 1995 what they most wanted from government (seifu ni taisuru yobo), the Japanese people responded:

1. 2. 3. 4.

A stable, satisfactory (jujitsu) public pension system: 59.1 percent. Stable, satisfactory public health insurance: 47. 9 percent. Better financing for housing: 29.5 percent. Policies to promote employment for those middle-aged and older: 28.1 percent. 5. Improved nursing care facilities and services (kaigo): 25.9 percent.

Such concerns about public welfare have accounted for at least four of the top five popular demands of government every year since the mid-1980s. 1 The public's preoccupation with welfare policy stems partly from Japan's status as the world's fastest aging society. People over age 65 rose from 7 to 14 percent of the population in just twenty-five years between 1970 and 1995, whereas the same transition took forty-five years in Germany, eighty-five years in Sweden, and 130 years in France. 2 Japanese today are the longest-lived people on Earth, and the continued aging of the population has dire implications for the financing of health care and pensions. Most of the industrialized states are witnessing a decrease in

1 Seron Chosa 28.4 (April 1996): 47; Seron ChOsa 34.5 (May 2002): 79. ' Margarita Estevez-Abe, "Negotiating Welfare Reforms: Actors and Institutions in the Japanese Welfare State," in Bo Rothstein ami Sven Steinmo, eds., Restructuring the Welji1re State: Political Institutions and Po[i,y Change (New York: Palgrave Macmillan, 2002), 159.

2

One World of Welfare

their workforces, which provide most welfare revenues, and a corresponding increase in their elderly, who account for most welfare expenditures. Declining birth rates and increased longevity are causing this population shift, which now threatens the economic viability of the modern welfare state. Japan is not a promising candidate for the policy solutions likely to ease this demographic pressure, and demonstrations and political controversy have greeted recent attempts to reform Japan's welfare system. Welfare issues are thus certain to remain a major public concern for years to come. This book offers a systematic, comparative examination of Japan's welfare system and a critical assessment of previous comparative research on the subject. It makes sense to analyze Japan's welfare policies from a comparative perspective. Most of the welfare challenges that Japan has faced over the last century have resembled those confronting other nations. Economic development has fostered common welfare problems in the industrialized countries, and it has also provided the technologies and surplus wealth that facilitate their solution. The Japanese, convinced that most of the welfare challenges they face are typical, have often patterned their welfare policies after those of Western countries. This tendency should persist, since Japan's future welfare difficulties will also be widely shared. Comparative research unearths the foreign models that have swayed Japan's policy makers; it enhances the analysis of Japan's welfare policies by juxtaposing them with other countries' efforts to solve similar problems; and it reveals what others might learn from Japan's experience. All research on Japanese welfare policy is at least implicitly comparative. Whether one views Japan's policies as advanced or backward, commonplace or distinctive, such judgments imply some conception of an average welfare state and how Japan might compare to it. Nonetheless, neither government agencies nor academicians have produced many in-depth comparative studies of Japanese welfare policy. Japan's Ministry of Health, Labor, and Welfare (MHWL) 3 regularly sends officials to study Western welfare systems, and the ministry scrutinizes foreign models when formulating policy. But, although government publications outline the features of foreign welfare systems, they do not compare them in detail to the policies of Japan. 4 International agencies such as the Organisation for Economic Co-operation and Development (OECD) and the International Labour Organisation (ILO) include Japan in their comparative statistics on welfare, but few of their studies offer detailed comparisons either. Most scholars of Japanese welfare policy, both Japanese and foreign, have also neglected comparative research. There is a burgeoning literature on foreign welfare systems in Japan. A study of eight welfare journals over 1973-1993 found that

3 The ministry changed its name to the Ministry of Health, Labor, and Welfare in 2001. Its previous name in Japanese was Koseisho, which the government translated as Ministry of Health and Welfare (MHW). The full Japanese title of the new, reorganized ministry is Koseirodosho. 4 See, for example, KoseishO [Ministry of Health and Welfare], Kiisei Hakusho: Heisei 10-Nenban [Welfare white paper: Heisei 10] (Tokyo: Gy6sei, 1998), 337-64.

Introduction

3

1,699 of the 7,985 articles they published were on foreign welfare practices. 5 But most Japanese research on foreign welfare policies excludes Japan, while research on Japan tends to be noncomparative. In Western academia as well, Japan is a onecountry area of specialization. Even books and articles that appear to address Japan's welfare system in comparative perspective often turn out to be parallel studies that describe the policies of various countries sequentially, without making direct comparisons. This situation is starting to change, but most scholarly writings about Japan's welfare policies to date have lacked a strong comparative dimension. The paucity of comparative research has not prevented the emergence of a dominant image of how Japan's welfare system compares to others. The mainstream view is that (1) Japan adopted welfare programs comparatively late in its economic development; (2) its policies are less generous than those of the major western European nations, if still more open-handed than those of the United States; and (3) company and family play greater roles in welfare provision than they do in other developed countries, and the state a lesser role. Kent Calder describes the prevailing image of Japan's welfare system this way: "Japan is conventionally considered to have one of the poorest social security systems in the industrial world. As many Americans and especially Europeans see it, this has been the inevitable price Japan has paid for its extraordinary economic growth. Conventional wisdom argues that by channeling such heavy shares of resources into industrial plants and equipment, ... Japan leaves little for the elderly, the infirm, and the indigent." 6 This image originated in the scholarship of Japan specialists, but recent trends in comparative welfare research have accentuated the view that Japan's welfare system differs from those of other industrialized countries. Both bodies of research merit a brief review. A large majority of Japan scholars endorses the image of Japan as a welfare laggard. Toshiaki Tachibanaki refers to Japan as an "anti-welfare state." In his view, "Our country's social safety net is incomplete.... Typifying its inadequacy are the unemployment insurance system and the public assistance system. Pensions, health, and nursing care also lack adequate resources and show signs of falling into acute difficulty ... " 7 Jon Woronoff writes: "The inability to provide for a decent old age is the biggest blot on Japan's record ... It is shameful that the government should perform so poorly, and that the population should do no better." 8 And Makoto Kono writes: ''A government with an ideologically driven strategy

5 Tomohisa Akiyama, "Nihon ni Okeru Ajia Shakai Fukushi Kenkyii" [Studies on Asian social welfare in japan], Shakai Fukushi Kenkyii, no. 60 Ouly 1994): 179. 6 Kent E. Calder, Crisis and Compensation: Public Policy and Political Stability in Japan, 1949-1986 (Princeton: Princeton University Press, 1988), 349. 7 Toshiaki Tachibanaki, Anshin no Keizaigaku: Raifusaikuru no Risuku ni Do Taiko Suru Ka [The

economics of security: How should we cope with the risks of the life cycle?] (Tokyo: Iwanami Shoten, 2002), 229' 241. 8

Jon Woronoff,Japan as Anything but Number One (Armonk, New York: M. E. Sharpe, 1991), 272.

4

One World of Welfare

opposes the expansion of public welfare production and attempts to maintain active informal welfare practices, even if the physical preconditions for these informal practices are rapidly being undermined. This is what has happened during the development of the welfare system in post-war Japan .... [I]n the 'Japanese Type Welfare Society,' public welfare services play only a subsidiary role to informal welfare practices."9 Tokyo University economist Naohiko Kamino equates the "Japanese-style welfare state" with heavy reliance upon the welfare functions of intermediary bodies, such as the corporation and the local community, and historian Sheldon Garon similarly emphasizes a distinctive Japanese approach to welfare that downplays the state's responsibilities. 10 The halfhearted character of Japan's welfare state is one of the few points on which leftist and nonleftist scholars of Japan seem to agree. Leftists attribute the country's alleged backwardness in welfare policy to the dominance of capitalist interests, while many nonleftist scholars see it as a product of Japan's "developmental state." Their terminology differs, but the facts are not in dispute. Whether owing to capitalist greed or to developmental priorities, Japan presumably stressed economic development to the neglect of public welfare, which diverts resources from industrial investment. A few Japan scholars have challenged the standard image. Foremost among them is John Campbell, who asserts: "Viewing Japanese policy toward the elderly as a whole, similarities with the West greatly overshadow the differences .... The Japanese-style welfare society is essentially ideology, evocations of a past ideal, whether real or mythical, by a conservative elite hoping to obscure a reality that has already changed." 11 Joji Watanuki has also debunked the idea of a distinctive Japanese style of welfare, noting that the strategy of combining "government measures, ... family, neighborhood, voluntary associations, and market mechanisms" in welfare provision is now "common to all welfare states." 12 Last but not least, the bureaucrats who draft most of Japan's welfare legislation believe that Japan's welfare programs parallel those of other industrialized countries. As stated in the Ministry of Health and Welfare's White Paper of 1999: "Since the decade beginning in 1945, we have built and expanded our country's social security with the goal of catching up to the advanced countries of Western Europe and the United States, and, judging overall, we have reached a favorable conclusion. Considering the scope of our social security system and the contents of its various programs, 9 Makoto Kono, "The Impact of Modernization and Social Policy on Family Care for Older People in Japan," Journal of Social Policy 29.2 (April2000): 183-84. 10 Naohiko Kamino, "Nihongata Fukushi Kokka Zaisei no Tokushitsu" [The special characteristics of the finances of the Japanese-style welfare state], in Takehisa Hayashi and Eiichi Kato, eds., Fukushi Kokka Zaisei no Kokusai Hikaku [An international comparison of the finances of welfare states] (Tokyo: Tokyo Daigaku Shuppankai, 1992); Sheldon Garon, Molding Japanese Minds: The State in Everyday Life (Princeton: Princeton University Press, 1997), chap. 1. 11 John Creighton Campbell, How Policies Change: The Japanese Government and the Aging Society (Princeton: Princeton University Press, 1992), 21. 12 Joji Watanuki, "Is There a 'Japanese-Type Welfare Society'?" International Sociology 1.3 (September 1986): 268.

Introduction

5

even if one compares it to the countries of the West, it has reached a fairly high level. " 13 Unsurprisingly, it is the mainstream view, not these dissenting voices, that has shaped the perspective of most comparative welfare scholars in the West who rely upon secondary research for their knowledge of Japan. Evelyn Huber and John D. Stephens, for instance, summarize their impression that Japan is an oddity among welfare states in these words: "Japan does not fit into any type and is being treated as a case apart .... The welfare state comes closest to a residual model, with very low benefits through the public programs in pensions and health care. The pillars of the system of social provision are private programs in the large corporations, from which only a minority of the labor force benefits, and the family." 14 Reinforcing the claims of most specialists, the theories that currently dominate the field of comparative welfare research also support the view that Japan's policies are different. These theories provide important background for the comparative analysis that follows. There is a long-standing debate among scholars concerning the likely convergence or divergence of the political economies of industrialized states. The globalization theorists of today, like most modernization theorists of the 1950s and 1960s, see the industrialized countries becoming more alike. 15 Conversely, scholars of late development, neocorporatism, and, most recently, "varieties of capitalism," argue instead for the persistence of marked national differences. 16 Research on welfare policy, though never at the forefront of this debate, has followed in its wake. Convergence theory ruled comparative welfare research through the 1970s. 17 Its leading advocate was Harold Wilensky, who used statistical methods to show that 13 Koscisho [Ministry of Health and Welfare], Kiisei Hakusho: Heisei 11-Nenban [Welfare white paper: Heisei 11] (Tokyo: Gyasei, 1999), 6. There are two excellent general books that review critically the tendency to exaggerate Japan's distinctiveness, though neither focuses attention on welfare policy: Ross Mouer and Yoshio Sugimoto, !mages of Japanese Society (London: Kegan Paul International, 1986); Steven R. Reed, Making Common Sense of Japan (Pittsburgh: University of Pittsburgh Press, 1993). 14 Evelync Huber and John D. Stephens, Development and Crisis of the Welfare State: Parties and Policies in Global Markets (Chicago: University of Chicago Press, 2001), 374n. 1. 15 For surveys of this literature, see Samuel P. Huntington, "The Change to Change," Comparative Politics 3.3 (April 1971): 283-322; David Held and Anthony McGrew, eds., The Global Transformations Reader: An Introduction to the Globalization Debate, 2nd ed. (Cambridge, UK: Polity Press, 2003). A famous early statement of the convergence thesis was Clark Kerr, John T. Dunlop, Frederick H. Harbison, and Charles A. Myers, Industrialism and Industrial Man: The Problems of Labor and Management in Economic Growth (Hamondsworth, UK: Penguin, 1973), which was originally published in 1960. "' For an introduction to recent contributions, see Peter A. Hall and David Soskice, eds., Varieties of Capitalism: The Institutional Foundations of Comparative Advantage (Oxford: Oxford University Press, 2001). Three noteworthy applications to Japan are Ronald Dore, British Factory-Japanese Factory: The Origins of National Diversity in ludustrial Relations (Berkeley: University of California Press, 1973); Wolfgang Streeck and Kozo Yamamura, eds., The Origins of Nonliberal Capitalism: Germany and Japan in Comparison (Ithaca: Cornell University Press, 2001); Kozo Yamamura and Wolfgang Streeck, eds., The End of Diversity? Prospects for German and Japanese Capitalism (Ithaca: Cornell University Press, 2003). 17 For a concise review of the convergence-divergence debate over welfare policy, see Christopher Pierson, Beyond the Welfare State! The New Political Economy of Welfare, 2nd ed. (University Park: Pennsylvania State University Press, 1998), chap. 1.

6

One World of Welfare

industrialization had led to comparable levels of spending on public welfare in the wealthiest countries. 18 More recently, globalization theorists have added some new wrinkles to convergence theory. Some point to the emergence of global models, or "scripts," of the welfare state that have spread from country to country. 19 Others argue that the growing international mobility of capital is forcing the industrialized countries to accept similar welfare arrangements, since business firms will not invest in countries where social overhead costs are unusually high. 20 Since the publication of Gosta Esping-Andersen's The Three Worlds of Welfare Capitalism in 1990, however, divergence theory has become the dominant trend in co~parative welfare rcsearch. 21 Most leading figures in welfare scholarship today accept Esping-Andersen's basic contention that several distinct types of welfare regime exist. Divergence theorists focus on the differences rather than the similarities among the welfare policies of the industrialized states, and they see these differences as deeply embedded in each country's distinctive class structure and politics. Although Esping-Andersen identifies only three types of welfare regime among the industrialized countries, his followers now argue for three or four more (see chap. 6). Most of today's divergence theorists embrace what Alexander Hicks describes as a "class-centered but state-mediated theory of the welfare state," which sees diverse welfare programs resulting from the different degrees of control that classbased political parties have exercised over governments. 22 Since social democratic parties are heavily reliant on the labor movement, Christian democratic parties less so, and nonreligious center-right parties are the least connected to organized labor, some scholars assert that these types of party support the welfare state in that declining order. 23 This is called the "power resources" strain of divergence theory, since it explains differences in public welfare with reference to the power resources

18 Harold Wilensky, The Welfare State and Equalit)•: Structural and Ideological Roots of Public Expenditure (Berkeley: University of California Press, 1975). Wilensky's work extends the earlier research of Phillips Cutright. See, for example, Cutright, "Political Structure, Economic Development, and National Social Security Programs," Americau Journal of Sociology 70.5 (March 1965): 537-50. 19 John W. Meyer, John Boli, George l\1. Thomas, and Francisco 0. Ramirez, "World Society and the Nation-State," American Journal of Sociology 103.1 (July 1997). 20 Dani Rodrik, Has Globalization Gone Too Far? (Washington, D.C.: Institute for International Economics, 1997); Fritz Scharpf, Governing i11 Europe: E.ffective and Democratic? (Oxford: Oxford University Press, 1999). 21 Gosta Esping-Anderscn, The Three Worlds of Welfare Capitalism (Princeton: Princeton University Press, 1990). Esping-Andersen's work builds upon distinctions among welfare policies that were first made by Richard M. Titmuss-see his Social Policy (New York: Pantheon, 1974). 22 Alexander Hicks, Social Democraq a11d Welfare Capitalism: A Century of Income Security Politics (Ithaca: Cornell University Press, 1999), 15. Sec also Walter Korpi, "Power, Politics, and State Autonomy in the Development of Social Citizenship: Social Rights during Sickness in Eighteen OECD Countries since 1930," American Sociological Review 54.3 (1989): 309-28; Julia S. O'Connor and Gregg M. Olsen, eds., Power Resources Theory and the WeljilYe State (Toronto: University of Toronto Press, 1998). 23 Huber and Stephens assert that both social democratic and Christian democratic parties are strongly supportive of the welfare state but produce somewhat differently structured programs; Huber and Stephens, Development and Crisis of the Welfare State, 41-44.

Introduction

7

of political parties. Another form of divergence theory explores the institutional complementarities between types of welfare regime and types of production system, thus linking divergence theories of welfare to divergence theories of capitalism as a whole. 24 I refer to this as the varieties-of-capitalism approach. \Vhile the broader debate over convergence and divergence in capitalist political economies is a fair fight between two large groups of scholars, this is not true of the debate over welfare policy in particular. In comparative welfare research, the divergence theorists have overwhelmed their rivals. In one survey of recent welfare scholarship, every study under review sought to identify and explain the variations among welfare states. 25 None set out to address the similarities. Globalization theorists can be just as single-minded in their pursuit of sameness as divergence theorists are in their pursuit of difference, but the former have yet to produce a single whole book applying theories of convergence to welfare policy. Because divergence theorists highlight the differences between welfare states and downplay the similarities, the ascendancy of divergence theory has reinforced the tendency to underscore the distinctiveness of Japan's welfare state. Most divergence theorists have characterized Japan's welfare system in one of two ways, either as a unique melange of contradictory traits 26 or as part of an East Asian welfare regime, in which the conventional image of Japan's system is projected onto other states in the Asian region (see chap. 5). Given the general consensus among specialists that Japan is a welfare laggard and the prevailing theoretical inclination to underline the differences among welfare states, many studies of Japanese welfare policy begin with questions such as these: Why were Japan's welfare policies late? Why has Japan's welfare commitment been weak? Why has Japan adopted a distinctive approach? "Late," "weak," and "distinctive" are comparative adjectives, yet there have been few comparative studies done to verify their applicability. This book tests systematically the various comparative assessments of Japan's welfare policies: the predominant scholarly view that they diverge from Western patterns for being underdeveloped, the minoritarian view that they have converged with the policies of other industrialized states, and particularly the recent attempts to specify a comparative framework based on welfare regime or region. To broaden the comparative scope of the study, I have limited its substantive focus. The welfare state comprises ongoing state commitments to protect large categories of people against the risks of accident, sickness, disability, old age,

24 For example, Berhard Ebbinghaus and Philip Manow, eds., Comparing Welfare Capitalism: Social Policy and Political Economy in Europe, Japan, and the USA (London: Routledge, 200 I). A somewhat different institutional approach, but one that also underlines the differences between welfare states, is Bo Rothstein and Sven Steinmo, eds., Restructuring the Welfare State: Political Institutions and Policy Change (New York: Palgrave Macmillan, 2002). 25 Paul Pierson, "Three Worlds of Welfare State Research," Comparative Political Studies 33.6-7 (August/September 2000): 791-821. 26 Gasta Esping-Andersen, "Hybrid or Unique?: The Japanese Welfare State between Europe and America," Journal of European Social Policy 7.3 (August 1997): 179-89.

8

One World of Welfare

unemployment, and poverty and to reduce the costs of raising a family. Where this book compares welfare states in a schematic way (for example, where it compares welfare budgets), it includes the gamut of state policies related to these risks. Where the book explores the details of policy content, however, it focuses on the three areas of health, old-age pensions, and employment. Health and pension policies claim two-thirds or more of every industrialized country's welfare budget. Most other welfare policies involve minor outlays by comparison. I also examine employment policy because social democratic theorists stress its significance and because it reveals aspects of Japan's welfare system that do not emerge from the analysis of health and pension insurance. Employment policy is the most controversial welfare field in Japan. Depending upon one's perspective, it can appear to be a success or a failure, and it is the toughest policy to assess with the usual statistics on welfare performance. It is an inherently interesting policy field in the context of this study. The public funds that support passive and active employment programs, public health, and pensions account for over 90 percent of Japan's state welfare expenditures. To be sure, there are other legitimate ways to delimit welfare policy. 27 This study does not address temporary disaster relief, housing policy, or education policy. A detailed exploration of these or other social policies in Japan, such as long-term care insurance or day care for children, might reveal somewhat different policy patterns from those analyzed here. Although I often use the term "welfare system" to refer to a country's welfare policies, welfare programs in most countries do not constitute a system in the sense of an organic structure based on consistent principles. The various welfare policies of any country arc likely to have different histories, to involve different policy makers and interest groups, and to reflect divergent ideas. But it is not necessary to examine all of a country's welfare programs to reach some intelligent comparative conclusions, especially if one includes the big two: health and pensions. While keeping the book of manageable length, my goal is to examine enough of the picture to test effectively the various images of Japan's public welfare that are found in case-study research and in comparative theories of the welfare state. Chapter I tests the conventional claim that Japan's welfare policies came late in its economic development. After discussing briefly some criteria for evaluating the evolution of welfare states, I compare the timing of first welfare policies in Japan and other countries. The analysis covers a long historical period and probes the effects of industrialization and foreign models on policy development. Chapter 2 places Japan's welfare policy making during the Pacific War (1937-1945) in a comparative and theoretical perspective. This was the most consequential period in the evolution of Japan's welfare programs. Most treatments of welfare policy have overlooked the impact of war, but the experience of Japan

27 ]ens Alber, "Continuities and Changes in the Idea of the Welfare State," Politics and Society 16.4 (December 1988): 451-68.

Introduction

9

as well as other countries demands its consideration. The centrality of war in Japan's welfare development undercuts both the convergence theory that portrays welfare policy as a product of industrialization and the divergence theory that sees it as a product of labor's political influence. Many misapprehensions of Japan's welfare programs are due to neglect of this vital period, whose legacy endures to this day. Chapter 3 tests the conventional claim that Japan's welfare spending has been comparatively stingy, lagging behind the country's economic growth. The economic "miracle" has dominated scholarship on postwar Japan, and research on welfare policy has long stood in the shadow of the much larger corpus of work on industrial policy. The inevitable impression is that industrial policy was the higher priority. Focusing on welfare budgets since the early 1950s, this chapter disproves the proposition that Japan slighted welfare policy to advance its industrial development. Chapter 4 scrutinizes the conventional view that the state's role in Japanese welfare provision is inferior to that in other industrialized countries, due mainly to the greater roles played by company and family. Advocates of this view contrast the welfare states of the West to what they see as a distinctive "Japanese-style welfare society." Since Japan's ruling Liberal Democratic Party issued a book of that title in 1979, this has been a common slogan in scholarship and politics. This chapter looks beyond the spending figures analyzed in chapter 3 to compare the substantive features of Japan's policies on health, pensions, and employment to the policies of other industrialized countries. Chapter 5 analyzes the strain of divergence theory that portrays Japan as part of a broader Asian or East Asian welfare model. Defining ''Asia" in various ways, I evaluate the case for considering it a coherent policy region in the welfare field. Chapter 6 considers Japan's fit in the mainstream welfare regime typologies that have flourished in comparative welfare research on the industrialized democracies. It weighs the evidence for regime distinctions against the evidence for a broader pattern of convergence. I ask what welfare regime typologies contribute to the study of Japan, and I use Japan as a critical case to evaluate the utility of the regime concept. Chapter 7 offers my comparative assessment of Japan's standing among the world's advanced welfare states. It explores the relevance of both convergence and divergence theories for understanding the Japanese record. Its main purpose is to spotlight the importance of international diffusion for explaining both the timing and content of Japan's welfare policies.

CHAPTER 1

ANTICIPATORY MODERNIZATION A Comparative Overview of Welfare State Development

This chapter puts the sequence and timing of Japan's welfare policies in comparative perspective. 1 Most scholarship suggests that Japan was a latecomer to public welfare. The litany of reasons why is by now quite familiar: ineffectual labor unions and parties, powerfully organized business interests, and high levels of family and corporate welfare. But how does one decide that a country is early, late, or just on time in its adoption of welfare policies? Preliminary to any judgment that Japan's welfare policies came late is the question of what a normal or average pattern of welfare policy development might be.

Determinants of the Welfare State Though scholars allege many diverse causes for the rise of welfare states, nearly all of them are related to some aspect of economic development. My research supports the common view that some minimum level of development is a prerequisite for extensive welfare programs. 2 It is rare to find an effective modern program of health, pension, or unemployment insurance covering a large part of the population in any country that falls below a gross domestic product (GDP) of about $1,000-1,200 per capita (1990 U.S. dollars adjusted for parity purchasing power). 1 I wish to thank Professor Philip Manow for suggesting a line of inquiry that led to the writing of this chapter, without implying that he shares responsibility for its conclusions. 2 "It has been shown repeatedly that social security programs simply do not appear without sufficient national surplus to make them a policy option, or if, as in many poor countries these programs are enacted, they remain weak paper programs or are severely restricted in coverage until such surplus is produced." Harold Wilensky, The Welfare State and Equality: Structural and Ideological Roots of Public Expenditure (Berkeley: University of California Press, 1975), 24.

Anticipatory Modernization

11

The level of economic development thus affects the timing of the first welfare policies in most countries. Once countries have crossed the minimum threshold of economic growth, the timing and form of welfare policies no longer correlate as closely with levels of economic development. Nonetheless, most studies still attribute patterns of welfare-state expansion largely to the differential impact of economic change. It is not just the level and pace of economic development that matter but also its content. Different patterns of economic development may cause differences between the welfare policies of countries at similar levels of industrialization. Figure 1.1 lists the main aspects of economic development that influence the emergence of the welfare state. Economic development creates welfare problems by eroding traditional modes of community and family welfare support, fostering unhealthy working and living conditions, and subjecting workers to cyclical unemployment.3 Even its beneficial effects may challenge welfare policy makers. For instance, by increasing life expectancy, economic development creates a need to support more people in old age. Economic development creates the means to solve welfare problems by generating the wealth to fund welfare services and by creating the superior technologies of medicine, communications, and information needed to sustain large-scale welfare policies. Economic development may foster a modern labor movement. It is a bad habit among scholars to treat economic development and the impact of organized labor as alternative explanations for the rise of the welfare state. Since the modern labor movement is itself a by-product of industrialization, this is confused thinking. Organized labor can sway the adoption of welfare policy in various ways. In some countries, such as Sweden and Britain, labor unions or parties have helped to build the welfare state in certain periods. In others, such as Germany and the United States, labor unions initially opposed state welfare to safeguard their own welfare functions.+ Even where unions have opposed welfare policy, however, labor's growing influence may scare employers and state officials into adopting welfare measures to win the workers' moderation and loyalty. Economic development facilitates mass participation in politics. The advances in communications, urbanization, and education that accompany economic growth create the potential for mass participation in politics. Whether this occurs in a democratic framework or not, it makes the living conditions of the mass of people a greater concern for government. Since economic development does not affect every society the same way and since other factors such as the traits of traditional society, culture, foreign models, and war affect welfare policy making as well (see fig. 1.1 ), the developed countries 3 Gerhard A. Ritter, Social Welfare in Germany and Britain: Origins and Development, trans. Kim Traynor (Leamington Spa and New York: Berg, 1983), 2-3. 4 See, for example, Gaston V. Rimlinger, Welfare Policy and Industrialization in Europe, America, and Russia (New York; John Wiley & Sons, 1971 ), 9, 80-81, 122-30; Theda Skocpol, Protecting Soldiers and Mothers: The Political Origins of Social Polley in the United States (Cambridge, Mass.: Harvard University Press, 1992), chap. 4.

(

Enhances administrative capacity

Fosters cyclical unemployment

( )

May scare elites into adopting state welfare

May promote state welfare

Organized labor

(

May increase a nondemocratic state's concern for average subject

May create electoral pressure for welfare

Mass participation )

(A) Effects of economic development on welfare policy. (B) Other factors that mediate the impact of economic development or that independently influence welfare policy making.

Figure 1.1 Framework for the comparative study of welfare policy development.

Mass war

Exposure to foreign models

Culture and values

Social conditions predating industrialization

B. Other factors that mediate the impact of economic development or independently influence welfare policy making

Increases life expectancy

Improves medical and information technologies

Creates unhealthy working and living conditions

-We~s~luti;ns- )

Creates surplus wealth

(

Erodes traditional welfare

Welfare problems . )

A. Effects of economic development on welfare policy

Anticipatory Modernization

13

do not share identical welfare histories. Still, economic development contains so many causes of welfare policy that it would be unreasonable to compare the policy history of different countries without noting their levels and patterns of economic growth. My preliminary standard for judging the timing of a country's welfare policies is this: a welfare leader is a country that adopts a particular welfare policy at a lower level of economic development than most other countries exhibited when they adopted that policy; a welfare laggard is one that adopts a welfare policy at a higher level of economic development than most other countries exhibited when they adopted that policy. If a country's level of economic development when it adopts a given policy is close to the mean level of other countries when they first adopted that policy, then its welfare development was average. This discussion does not attempt to do justice to the complex literature on the evolution of welfare states, but it is necessary in order to explain the differences between my account of Japanese welfare policy and most others. The biggest error in research on Japanese public welfare is the habit of comparing it to that of other countries without noting their respective levels of economic development. Those who fail to temper their comparisons with the proper regard for economic development fall into the trap of reading Japan's present into its past. They compare Japan's welfare history at every stage to that of the leading, contemporary, industrialized countries, as if Japan had always been a highly industrialized country itself. It is common to find comparisons of Japan's welfare policies with those of other countries in a given calendar year, for instance, that do not consider their relative levels of wealth or industrialization. 5 There is nothing magical about any date that should produce similar policy opportunities and achievements in countries at different levels of economic growth. Japan has industrialized so rapidly that people tend to forget how recently it became a wealthy nation. As late as 1960, Japan's GDP per capita was lower than that of Argentina or Czechoslovakia; less than half that of Germany, Britain, or Sweden; and just over a third that of the United States. It was closer to the GDP per capita of the world's poorest countries than to that of any of the leading \Vest ern states. 6 No meaningful comparisons of welfare history are possible if one loses sight of this. The Sequence of Policy Adoption Comparative research has uncovered three typical features of welfare-state development in the industrialized countries: 7 5 For example, Toshimitsu Shinkawa, Nihongata Fukushi no Seiji-keizaigaku [The political economy of Japanese-style welfare] (Tokyo: San'ichi Shobo, 1993), 69-70. 6 Angus Maddison, Monitoring the World Economy, 1820-1992 (Paris: Organisation for Economic Co-operation and Development, 1995). 7 Christopher Pierson, Beyond the Welfare State? The New Political Economy of Welfare, 2nd ed. (University Park: Pennsylvania State University Press, 1998), lll; Peter Flora andJens Alber, "Modernization, Democratization, and the Development of Welfare States in Western Europe," in Peter Flora and Arnold Heidenheimer, eds., The Dc