I'm curious to know how rational choice theorists would explain PM Noda's single-minded devotion to pushing the unpopular consumption tax hike.

My understanding of rational choice theory is that it borrows its methodology from economics in which actors try maximize their utility in the narrow sphere of the marketplace, and utility is defined by some fairly well-specified objective function, e.g. firms try to maximize profits, consumers try to maximize materal living standards and so will buy a $300 TV rather than a $400 one if the two are perceived to be identical. In the case of rational choice theory about politicians, as I understand it, the objective function is usually said to be to gain power by getting elected and re-elected, rising in the ranks of their party and office, and being part of a ruling party. Ideology, principles, beliefs are all laid by the wayside.

How can any of this explain Noda's actions? As a result of the tax hike and his mishandling of the nuclear restart issue, the Democratic Party of Japan is headed for a calamitous defeat. Most surveys (as well as my own personal conversations with DPJ and LDP Diet
members) suggests the DPJ would win about 100 seats if the election were held now whereas the LDP would win 200. One first-term DPJ Diet member from western Japan, a genuine reformer, bitterly told me he may need to swtich to Hashimoto's party if he wants to survive the next election. Needless to day, Noda will no longer be head of the DPJ in the aftermath of such an electoral disaster (assuming he remains PM in the run-up to it).
Whether these numbers turn out to be right or not, depends on the Hashimoto party and other factors, but I don't know of anyone who believes the DPJ will win.

That the tax hike would be disastrous for the DPJ was predictable--based on the 2009 results--even if the severity of the disaster was not. One could suggest that Noda miscalculated and thought the tax hike would be a winner for the DPJ because the party could show itself to be responsible. But everything Noda has said about "staking his life"
indicates that, whatever his calculations may have been, he was determined to push through the tax hike at all costs. And the reason is that, rightly or wrongly (wrongly in my humble opinion) he truly believed that a tax hike was the right thing to do for Japan, and that, due to fear of Japan becoming the next Greece, doing so was more important and urgent than either his own future or that of his party, and more important than other vital issues.

For example, Noda said not a word about nuclear energy until after he rammed the tax hike through the DPJ, and then he hastily cobbled together a fig leaf of alleged safety rules in order to restart the two reactors at Oi, but did it in a way that further increased distrust in nuclear power, in the government as a whole, and in the DPJ. But he did so because hiking taxes was his top priority.

So, how does rational choice explain Noda's willingness to sacrifice his own career and his party's fortunes in order to "do the right thing" as he saw it?

If one says that "doing the right thing" is now part of the objective function, then rational choice theory is basically left with saying: "he did it because he wanted to do it." That, to me, hardly seems like a contribution to either explanation or prediction.

BTW, this is not a rhetorical question on my part. I have little doubt that rational choice theorists do have an explanation for Noda's actions; I just can't figure out what it would be. I'm hoping that its advocates on the list can help me out.

Richard Katz
The Oriental Economist Report