The structural logic approach put forth in this book predicts the most likely policy outcomes on the basis of the government type, party strength, and district magnitude. This chapter applies the logic to explain why Japan's social protection system began to change fundamentally in the post-1996 period. At first sight, there appears to be little difference between the pre-1996 and the post-1996 periods: the government type remained the same – that is, coalition governments. This apparent continuity, however, masked a tidal shift in Japanese politics that occurred after the electoral and legislative rules were changed in the latter half of the 1990s. In October 1996 the Lower House adopted a SMD-dominant mixed electoral system, requiring the typical Lower House politician to compete for a single seat in her district. This chapter covers the period from the 1996 Lower House elections through to 2006.

Of critical importance here is the centralization of decision making within the LDP as a consequence of the new electoral rules. The LDP leadership had always found it very difficult to impose its will on the party, due to the weakening of the party that occurred under the MMD/SNTV system. Japan's MMD/SNTV system had empowered intraparty veto players, such as habatsu leaders and subcommittees of the Policy Affairs Research Council (PARC), which were allied with different ministries. Under the new electoral rules, the elimination of intraparty competition eroded the basis of the old LDP politics by making it possible for the party leader to centralize the party.