What happens to the LDP?

Having suffered a humiliating defeat, it is likely that the LDP will be in turmoil for a few weeks. However, once the dust settles, what shape will the party that emerges take?

Aso stated on Sunday that he would take responsibility for the defeat, and so it is all but certain that he will not be the leader of the party. A number of senior party figures also lost their seats, including former Finance Minister Shoichi Nakagawa, meaning the LDP will have fewer reputable politicians to choose from to take senior posts.

"The LDP is running out of political talents. They may come out with a stop-gap leader until they can put things back together again," says Nakano. "Or they may come up with someone rather unexpected and surprising. One of the names mentioned as a possible leader at the moment is (Minister of Health Labor and Welfare Yoichi) Masuzoe, who isn't even a member of the lower house, he's in the upper house. That would be quite a novelty for a major party leader."

Temple University's Kingston, however, rang a positive note about the future for the party. "The LDP will be what an opposition party should be. They will scrutinize the policies of the ruling party and call them out when they disagree. I think that is what is valuable in a democracy, is to have an opposition that opposes."

How effectively it can do this will likely be based on a number of factors: the policies the DPJ implements, the state of the economy and how individuals in the DPJ handle public scrutiny to name a few.

Hidden treasure?

The main aim of the DPJ has been to eliminate wasteful spending that it believes there is plenty of within the LDP budget and to create a more effective style of governance in which bureaucrats answer to the government, not the other way around.

There is however, a lot of doubt that the DPJ's estimates in its manifesto it states it aims to free up trillions of yen -- are unrealistic.

"I would imagine the DPJ budget is somewhat overly optimistic and so criticism directed to the DPJ on that front is mostly justified," says Nakano.

Kingston agrees: "I do not doubt for a moment that there is a vast amount of wasteful spending. There is a lot of fat to trim. I don't believe there is as much as the DPJ claims, I don't think they will find enough to cover their spending bills."

Both agree that this will likely lead to a reallocation of spending from public-works projects and into social-welfare programs. "It will likely be welcomed if the DPJ reviews the spending priorities of the government," Nakano says.

While short-term support for this is likely, what this will mean for Japan in the long term is a question that is more difficult to answer, and the DPJ's manifesto provides few answers. It states that money will be allocated to local governments to spend as they please, and pledges to decentralize decision-making, but there is a lack of details in this area that will take years, not months to work out.

The same could be said of the plan to take power from the bureaucrats, long the staple of Japanese politics.

As Kingston points out: "Maybe the LDP will make up ground in the upper house elections next year, after all, the party is handing the DPJ a poison chalice with the economy in trouble. If the DPJ doesn't turn the economy around, voters could turn against it in the upper house elections. We could end up with another divided parliament."

(Xinhua News Agency August 31, 2009)