Tiptoeing toward Resolution

After arriving in Washington on 26 March, Ozawa held a series of talks with U.S. officials, among them Commerce Secretary William Verity and USTR Clayton Yeutter. The Americans demanded guaranteed access for U.S. firms to major private-sector projects, while the Japanese side insisted upon retaining its designated bidder system. Four days later, they reached an accord that allowed U.S. companies to participate in seven large-scale public works projects and to apply "transparent" procedures to the construction of a new headquarters for Nippon Telegraph and Telephone Company and the Trans-Tokyo Bay Expressway. (These seven projects included work on Haneda Airport, redevelopment of Tokyo Bay, Yokohama's Minato Mirai 21, Hiroshima Airport, Akashi Strait Bridge, Ise Bay Expressway, and Kansai Cultural and Academic Research City). In addition, the accord created liaison points for foreign firms wishing to submit tenders and extended the submission of pre-tender cost estimates to sixty days (Japan Times , 31 Mar. 1988). Because of his influence and personal connections, Ozawa earned much of the credit for the Major Projects Agreement. That the accord ultimately failed to diminish the trade friction only highlights Japan's deeply rooted domestic resistance to market liberalization.

The American assault upon Japan's long-secluded construction fortress called attention to the role played by the LDP's factions and policy tribes in the politics of public works. As we have seen, the intraparty factions served the needs of their members, providing them with essential electoral resources (e.g., party nomination, campaign funds, and political posts) and offering members a collegial setting for seeking support and trading favors needed to fulfill the demands of constituency service. Even after a faction leader steps down, most fac-

tioneers remain within the faction, and the factional lineages come to dominate certain subgovernments.

Between 1955 and 1993 the LDP's construction tribalists controlled vast legislative power in Japan's public works subgovernment. But instead of using their influence solely to funnel public works projects into their home districts, the LDP construction tribalists largely used their regulatory clout to ensure that particular construction firms were favored in the awarding of public works contracts. Of course, they did not ignore constituency service; as we have seen, the low ideological differentiation among rival LDP candidates in the SNTV system required career politicians to grant constituency service high priority. As Ono Banboku once observed, "A monkey that falls from a tree is still a monkey, but a legislator who falls in an election is merely human" (Inoguchi and Iwai 1987, 139–40). From the perspective of an LDP backbencher, membership in the construction tribe, with the promise of increased voter support and political funds and connections to the public works bureaucracy, offered a chance to escape such a mortal end.

Given the electoral benefits of public works, LDP politicians naturally resisted foreign pressure to open the construction market, which would have meant forfeiting invaluable electoral advantages. At the root of the construction friction, then, one finds institutional incentives for the factioneering and tribalism. It was neither Japanese culture nor Japanese traditions that produced the "politics of factions and tribes," but rather such institutions as the SNTV and the system of campaign financing.