The impact of the post Cold War crises on the political economy of Japan

Kawakami , Naotaka

The three major security crises in the last decade in Japan- the response to the Gulf War, the earthquake in Kobe, and the Sarin chemical attack on Tokyo subway lines- provided the major turning points of Japanese security policy of the post cold war era. These events have also greatly affected Japanese fiscal policy and politics. The lessons from the failed attempt to send Self Defense Forces to the Gulf led to the act of allowing the SDFs' participation in international peacekeeping operations and the new Guideline for "the situation in areas surrounding Japan". The new political coalition which was formed to pass the tax increases in order to finance the Gulf War paved the way to the era of coalition governments in the 1990s and today. The earthquake in Kobe and the Sarin chemical attack made the Japanese people realize the importance of the SDFs in times of catastrophic events. These events, combined with the changes in the international situation, led to the revision of the National Defense Program Outline. These catastrophic events also led to the strengthening of the prime minister's office and some improvements of the law enforcement system. The "construction bonds" principle for fiscal policy was finally broken on the occasion of the Kobe earthquake, and the issuance of government bonds has been accelerated since then. All of these changes relate to the current response of the Koizumi Cabinet to the recent terrorist attacks in America and the Japanese budget deficit. As to the future of both security policy and fiscal policy, the preparedness of the Japanese people to "sacrifice" is important.

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Academic Units
Center on Japanese Economy and Business
Center on Japanese Economy and Business, Graduate School of Business, Columbia University
Center on Japanese Economy and Business Occasional Papers, 49
Published Here
February 16, 2011