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The Relationship Between the Prime Minister and the Governing Party in Britain and Japan: a Comparative Analysis of Responses to the Oil Crises 1973-1980

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The Relationship Between the Prime Minister and the Governing Party in Britain and Japan: a Comparative Analysis of Responses to the Oil Crises 1973-1980 THE RELATIONSHIP BETWEEN THE PRIME MINISTER AND THE GOVERNING PARTY IN BRITAIN AND JAPAN: A COMPARATIVE ANALYSIS OF RESPONSES TO THE OIL CRISES 1973-1980 KENSUKE TAKAYASU DEPARTMENT OF GOVERNMENT LONDON SCHOOL OF ECONOMICS AND POLITICAL SCIENCE 2003 UMI Number: U185670 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Disscrrlation Publishing UMI U185670 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 T H£S£S F 101307^ ABSTRACT British and Japanese prime ministers have opposite reputations in policy-making, while sharing similar systemic backgrounds and formal power resources within the executive. Prime-ministers’ power in policy-making within the executive was primarily promoted and circumscribed by their relationships with their governing parties and their strategic decisions over appointing ministers. Fourteen case studies on prime ministers’ responses to the oil crises in foreign, fiscal and domestic oil policies between 1973 and 1980 found that the Japanese prime ministers exerted more power, while some British prime ministers faced more constraints, than might have been expected. Edward Heath, a British Conservative premier with clear control over the party, exercised power with minimal intervention. Kakuei Tanaka, an LDP premier, exhibited the institutional potential of the Japanese prime minister and the restraints on him, which derived from the existence of autonomous cabinet ministers, enjoying independent support within the party. James Callaghan, a British Labour premier, demonstrated the substantial power resources deployed by the British prime minister and the limits imposed by divisions in the governing party and the cabinet. Masayoshi Ôhira, an LDP premier, emphasised ministerial appointment when confronted by hostile groups in the governing party. The main differences of formal power resources of the British and Japanese prime ministers were: the more significant constitutional position of the cabinet in Japan, the superior information network centred on the British prime minister, and the policy unit available to the British prime minister after 1974. Without the support of the governing party it was difficult for the prime ministers even to mobilise their power resources, whereas vdth its support they did not need to make explicit interventions to achieve their preferred policies, Principal-agent theory and two-level games were relevant for analysing prime-ministerial power in policy-making and party organisation. TABLE OF CONTENTS INTRODUCTION 10 A cknowledgments 14 List o f Tables and Figures 18 List of Abbreviations 19 I. Prime Ministers Facing Two-Level Games 21 1. Similar Systems, Different Reputations 22 2. Prime-Ministerial Studies: Power-Resource Analysis and Systems- Level Analysis of Prime Minister-Governing Party Relationship 29 3. Operationalising Prime-Ministerial Power 35 4. Two-Level Games the Prime Minister Plays 44 4 (i) Two-Level Games and Prime-Ministerial Power 44 4 (ii) Principal-Agent Perspective 47 4 (iii) Policy-Making Game 50 4 (iv) Office-Keeping Game 53 5. Hypotheses and Counter-Hypotheses 60 5 (i) Hypotheses 60 5 (ii) Counter-Hypotheses 61 a. Bureaucratic Dominance 61 b. Power-Resource Differences 63 c. Ministerial Government 64 d. Personality 66 6. Structure of the Thesis 67 II. Prime-Ministerial Power and Comparative Case Method 69 1. Aims of Comparative Politics 69 2. Methods of Comparative Politics 72 3. Methodological Problems of Prime-Ministerial Studies 77 4. Comparative Case Method and Case Selection 80 5. Selecting Cases 84 6. Oil Crises: the Issues 90 6 (i) Oil Crises in the 1970s 90 6 (ii) Edward Heath 93 a. Foreign Policy: ‘NeutralApproach’to the Middle East Conflict and Cooperation in the EEC 93 b. Fiscal Policy: Reducing Public Expenditure 94 c. Oil Policy: From Cautious Wait-and-See to the Three-Day-Working Week 95 6 (iii) Kakuei Tanaka 97 a. Foreign Policy: Clarifying the Middle East Policy 97 b. Fiscal Policy: From Fiscal Expansion to Contraction 99 c. Oil Policy: Pushing Emergency Bills through the Government 101 6 (iv) James Callaghan 102 a. Foreign Policy: Oil-Sharing in the EEC 102 b. Fiscal Policy: the IMF Crisis and Controlling Public Expenditure 103 c. Oil Policy: North Sea Exploration Policy 104 6 (v) Masayoshi Ôhira 105 a. Foreign Policy: Balancing Iran and the United States 105 b. Fiscal Policy: Fiscal Consolidation and the General Consumption Tax 107 c. Oil Policy: Ceiling-Price and Allowing a Price-Rise for Oil 108 7. Conclusion 110 III. Networks around the Prime Minister - Core Executives and Departments 111 1. Networks, Organisations, and Coordination 112 1 (i) Division of Labour or Power Dependence? 112 1 (ii) Core Executives and Executives 113 2. Core Executive and Coordination 115 2 (i) Coordination in Britain 115 a. Money 115 b. Personnel and Organisation 117 c. Information 120 2 (ii) Coordination in Japan 124 a. Money 124 b. Personnel and Organisation 126 c. Information 128 2 (iii) Prime Ministers and Coordination - A Comparison 133 3. Prime Minister’s Inner Supporters 137 4. Departments 144 4 (i) Britain 145 a. Foreign and Commonwealth Office 145 h. Treasury 147 c. Department o f Trade and Industry / Department of Energy 149 4 (ii) Japan 150 a. Ministry of Foreign Affairs 150 b. Ministry of Finance 152 c. Ministry o f International Trade and Industry 154 5. Conclusion 156 IV. Constraining the Prime Minister - Governing Party as Principal 158 1. Office-Keeping Game : A Principal-Agent Perspective 159 2. Reviewing the Leadership 161 3. Making and Checking Government Policies 165 4. Coherence of the Party: Internal Groups 177 5. Conclusion 187 V. Delegation and Control - Edward Heath and the British Conservative Party: October 1973-January 1974 190 1. OfFice-Keeping Game 191 2. Foreign Policy: ‘Neutral Approach’ to the Middle East Conflict and Cooperation in the EEC 196 2 (i) ‘Neutral Approach’: Foreign Secretary’s Decision 196 2 (ii) Prime Minister Instructs on EEC Oil-Sharing 199 2 (iii) Analysis 204 3. Fiscal Policy: Reducing Public Expenditure 207 3 (i) Expansionary Fiscal Policy and Heath’s Leadership 207 3 (ii) Retreat from the Expansionary Fiscal Policy 209 3 (iii) Analysis 213 4. Oil Policy: From Cautious Wait-and-See to the Three-Day-Working Week 215 4 (i) From Oil Crisis to Energy Crises: Walker’s Voluntary Approach 215 4 (ii) Hard Landing: Unhappy Heath 221 4 (iii) Analysis 224 5. Conclusion 226 VI. Competing Leaders - Kakuei Tanaka and the LDP: October 1973-January 1974 229 1. Office-Keeping Game 230 2. Foreign Policy: Clarifying the Middle East Policy 233 2 (i) Slow Government Responses and the Mounting Crisis 233 2 (ii) Prime Minister versus the ‘Autonomous’ Foreign Minister 237 2 (iii) Analysis 242 3. Fiscal Policy: From Fiscal Expansion to Contraction 244 3 (i) Tanaka’s Expansionary Fiscal Policy 244 3 (ii) Ministerial Change from an Ally to an Opponent 247 3 (iii) Analysis 252 4. Oil Policy: Pushing Emergency Bills through the Government 254 4 (i) MITI’s Response to the Oil Crisis 254 4 (ii) Domestic Disorder and Tanaka’s Leadership 257 4 (iii) Analysis 263 5. Conclusion 265 VII. Look Left, Look Right. Divided Party and Divided Cabinet - James Callaghan and the Labour Party: April 1976-November 1977 270 1. Office-Keeping Game 271 2. Foreign Policy: Oil Sharing in the EEC 274 2 (i) Emergence of the Oil-Sharing Scheme in the EEC 274 2 (ii) Benn Rejects the Oil-Supply Guarantee 276 2 (iii) Analysis 281 3. Fiscal Policy: IMF Crisis and Controlling Public Expenditure 284 3 (i) Callaghan Backs his Chancellor 284 3 (ii) Unconvinced Prime Minister 287 3 (iii) Cabinet Government or Policy Disarray? 291 3 (iv) Analysis 295 4. Oil Policy: North Sea Oil Exploration Policy 298 4 (i) Tony Benn as Chief Negotiator 298 4 (ii) Tightening Government Control 302 4 (iii) Analysis 305 5. Conclusion 308 VIII. Party at War, Peace in Cabinet - Masayoshi Ôhira and the LDP: December 1978-May 1980 313 1. Office-Keeping Game 314 2. Foreign Policy: Balancing Iran and the United States 318 2 (i) Overshadowed by the Iranian Revolution 318 2 (ii) Standing Shoulder to Shoulder with the United States 323 2 (iii) Analysis 326 3. Fiscal Policy: Fiscal Consolidation and the General Consumption Tax 328 3 (i) Emergence of the General Consumption Tax 328 3 (ii) A Determined Prime Minister 331 3 (iii) Analysis 336 4. Oil Policy: Ceiling-Price and Allo^ving a Price-Rise for Oil 339 4 (i) Passing Global Price-Rises to the Domestic Market 339 4 (ii) Accepting Price-Rises and Fighting Inflation: Ôhira’s Endorsement 342 4 (iii) Analysis 346 5. Conclusion 348 IX. Conclusion - Prime Minister, Cabinet Ministers, and the Governing Party 353 1. Findings and Testing of Hypotheses and Counter-Hypotheses 354 1 (i) Did Cabinet Ministers and Governing Parties Matter? 357 1 (ii) Did Power Resources Differ Critically? 364 1 (iii) Did Civil Servants Dominate the Prime Minister? 368 1 (iv) Did Ministerial Government Circumscribe Prime-Ministerial Power? 372 1 (v) Did Personality Explain Prime-Ministerial Power? 374 2. Routes to Exerting Prime-Ministerial Power 375 2 (i) British and Japanese Practice: 1973-1980 375 2 (ii) Distinguishing the Core Executive from Government Departments 378 2 (iii) Policy Areas and Routes of Prime-Ministerial Power 381 3. External Validity: Boundaries of the Thesis 384 3 (i) Differences in Parliamentary Procedures 384 3 (ii) Policy Areas Selected 387 3 (iii) Specified Time Periods 390 3 (v) Policy Impact 395 4.
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