Spending without Taxation: FILP and the Politics of Public Finance in Japan

By Gene Park | Go to book overview

FIVE
The Electoral Logic of FILP Allocations, 1960–1993

Thus far, the preceding chapters have revealed FILP’s role in bridging otherwise diverse interests within the ruling coalition. The analysis has been at the level of elite politics, mainly looking at the relations between and within the ruling party, the government in power, the spending ministries, and MOF. The analysis has focused on, among other things, the negotiations leading to the creation of FILP, the development of long-range economic plans, budget negotiations, and the general management of public finances. These chapters have shown that FILP, as a nonbudgetary source of public finance, helped smooth tensions among three key goals: industrialization, staying in power, and budget restraint. The claim that FILP bridged interests, however, will be even stronger if it can be demonstrated that FILP actually provided a useful alternative or supplement to budgetary spending. If it did not, then spending ministries and the LDP would presumably be less willing to accept FILP allocations in lieu of budgetary funds. Taken to the logical extreme, this would suggest that FILP was in fact a poor instrument for brokering compromises. While the previous chapters have already demonstrated that FILP was in fact a useful tool for bridging interests, this chapter focuses on analyzing how FILP actually advanced the LDP’s electoral interests.

This chapter moves down a level of analysis to examine whether in fact FILP provided a useful resource for the LDP. The thin arrows represent the focus of the previous chapters, while the bold arrows in Figure 5.1 illustrate the central concern of this chapter. This chapter addresses two specific questions. First, did FILP help the ruling Liberal Democratic Party (LDP) win elections (Arrow 1)? Second, did the ruling party steer FILP distributions

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