State of SSE in Japan

1. State of SSE in Japan Akira Kurimoto Director, CCIJ

2. spatial configuration of SSE in Japan from the institutional perspective

3. Enormous size of Japanese SSE • Nonprofit organizations accounts for approx. 4.2% of the Japanese GDP in the Satellite Account of Non-Profit Institutions. • In the nonprofit sub-sector, social welfare corporations have been assigned the role of principal provider of social services while medical corporations occupy predominant position in providing health services. • Private school corporations cover more than 70% of higher education while religious corporations often exert influence on politics using enormous accumulated assets. • The Kobe earthquake sparked voluntarism among citizens and newly born nonprofit organizations (NPOs) mushroomed in the last decades and outnumbered the existing public interest corporations (PIC).

4. Share of Japanese Non-Profit Institutions in GDP in 2004

5. NPI’s Share in GDP in 8 countries

6. Enormous size of Japanese SSE • In the co-operative sub-sector, agricultural co-ops have played a pivotal role in handling the bulk of foodstuff and exercised a strong influence on the agricultural policy. Zen-noh Supply/Marketing Co-op Federation was ranked as the largest, Zenkyoren Insurance Co-op Federation as the second and Norinchukin Bank as the 12th in 2006 in the ICA’s Global 300 ranking. • Consumer co-ops have grown to be powerful consumer organizations with 25 million members (40% of households) and JPY3.3 trillion turnover (6% of food retailing), largely surpassing the European counterparts. • Insurance co-ops occupy 23% of life insurance contracts while co-operative banks handle 24% of savings and 18% of loans, serving farmers, SMEs, workers and consumers. • Workers co-ops are emerging in the last decades but still remain very small and lack the institutional support.

7. Key Figures of Japanese Co-ops

8. Divided SSE in the Strict Regulatory Environment • Japanese SSE are divided between and among subsectors; nonprofits and co-ops. • Such divide can be explained in legal-administrative system and political economy system. • In the Japanese legal system, Article 33 of the Civil Code required all regal persons to be formed in accordance with its regulations. • The corporate status corresponds to the supervising authorities, whose mandates are provided by specific laws.

9. Types of NOT-FOR PROFIT Corporations in Japan

10. Divided SSE in the Strict Regulatory Environment • Since the government has the authority in making and implementing the industrial policy, the trade associations try to pursue their common interests by approaching the appropriate bureaus of relevant ministries or mobilizing the power of politicians. • So, the coalition structure emerged among three parties so long as they share common interests. Such tripartite relationship of the LDP, the business sector and the bureaucracy in post-war Japan is often described as “iron triangle”. • Aoki Masahiko puts it as "compartmentalized pluralism" or "bureau pluralism.

11. DPJ’s Initiatives to Foster SSE and Civil Society • General election in 2008 brought about a historic power shift from LDP to e DPJ. • Based on Prime Minister Hatoyama’s proposition, the Roundtable was created in January 2010 aiming to examine ways to disseminate the idea “New Public Commons” among citizens, firms and governments and the directions which the future Japanese society should aim at and institutional frameworks to realize them.

12. DPJ’s Initiatives to Foster SSE and Civil Society • It published a Declaration in June 2010 proposing government actions toward their institutionalization, some of which were realized by tax reform for nonprofits etc. • These proposals include a number of measures for the legislative, administrative and financial back up to SSE and can contribute to strengthened civil society. • There was a strong expectation that DPJ would accelerate such transformation but the inflated bubble seems to burst shortly.