The development of the Japanese welfare state and assessment of it's performance

Podolskiy Vadim Andreevich PhD in Politics Associate Professor of the Faculty of Political Science; State Academic University of Humanities 26 Maronovsky Lane, Moscow, 119049, Russia deomniscibili@yandex.ru Other publications by this author

The article was prepared at the State Academic University of Humanities within the framework of the state assignment of the Ministry of Science and Higher Education of the Russian Federation (topic no. FZNF-2023-0004 "Digitalization and the formation of a modern information society: cognitive, economic, political and legal aspects")

Acknowledgements: The article is prepared at the State Academic University for the Humanities as part of fulfillment of the State Assignment of the Ministry of Science and Higher Education of the Russian Federation (theme № FZNF-2023-0004 “Digitalisation and the development of the modern information society: cognitive, economic, political and legal aspects”)

Introduction

The relevance of studying the history, organization and effectiveness of the Japanese social policy system is related to the fact that in Japan, currently, the most acute problems are those faced by most developed countries: the aging of the population against the background of a slowing economy. The measures taken in Japan in recent decades can serve as a source of valuable information to assess the feasibility and prospects of programs to optimize social spending, the political significance of reforms, and protection against risks.

In Japan, in the second half of the 20th century, the most developed welfare state in Asia was created, which in recent decades has faced serious difficulties due to demographic and economic changes. After a period of rapid growth in the second half of the 20th century, the Japanese economy is stagnating in the 21st century. If in 1995 the Japanese economy accounted for 70% of the American economy in terms of nominal GDP ^{[19, p. 168]}, then in 2024 it was less than 20% ^{[37, p. 74-75]}. The share of the elderly population is growing, Japan is ahead of all countries in this indicator – almost 30% of Japanese citizens are over 65 years old ^{[53, p. 16]}. The birth rate is declining, natural growth has been replaced by natural decline in the last decade, and the country's population is declining. The share of Japan's expenditures on pensions, benefits and healthcare in GDP has increased 5-fold over the past 50 years and now stands at almost 25% ^{[24, p. 134]}.

Social policy in Japan has been studied by domestic and foreign experts. There are reviews of the main characteristics of the welfare state in Japan ^[8]. Much attention is paid to the impact of population aging on the economic situation in general ^[3] and on the social security system ^[7]. Social support programs for the elderly are being considered ^[11]. Demographic problems in Russia and Japan are compared ^[1]. Demographic programs are being studied ^[28], their achievements and failures ^[6]. The social policy in Japan and other East Asian countries is compared ^[44], as well as in European countries ^[47]. The attention of researchers was attracted by the experience of Japan in rapidly increasing the level of well-being due to effective social policy ^[29]. The problem of poverty and inequality in Japan is studied ^[5], social mobility ^[10] and the social stratification prevailing in the country ^[9]. Japan's measures to achieve budget sustainability through changes in tax policy and rules in the field of social policy are evaluated ^[13]. The influence of cultural factors on the peculiarities of Japanese social policy is assessed ^[2].

In the Esping-Andersen typology, the Japanese social policy system is located between two types, liberal and conservative. Japan's inclusion in the liberal regime is possible due to the significant role of private initiatives in the social sphere. Esping-Andersen notes generous corporate social protection programs and programs for government employees, which makes it possible to classify the Japanese system as a conservative type. Esping-Andersen mentions cultural factors – filial piety and care for children, dating back to Confucian ideals – as the reason for the relatively smaller scale of the welfare state in Japan compared to Western countries ^{[17, p. 180-182]}.

Three significant periods can be distinguished in the history of the formation of the welfare state in Japan. The first was in the first half of the 20th century, when Japan introduced insurance mechanisms adopted in Germany. The second was the creation of universal social insurance schemes in the 1950s and 1960s. The third is the optimization and adaptation of the created system in connection with economic challenges and demographic changes in the late XX-early XXI century. The work is structured chronologically, describing the key reforms in each period under review.

Methodology.

The political significance of social reforms is assessed on the basis of an analysis of the interaction between government authorities and political parties and social movements. The effectiveness of the welfare state is assessed by comparing the resources consumed by the system and the availability of benefits for citizens. Quantitative indicators of the functioning of the welfare state in Japan are estimated – the level of income replacement by pensions, the share of poor citizens among the elderly, life expectancy, the "burden of disease", the share of direct, that is, not covered by insurance, payments of citizens for medical services. Data from the Organization for Economic Cooperation and Development, the Institute for Health Indicators and Assessment, the International Labor Organization and other international organizations and Japanese government agencies are used.

Formation of insurance mechanisms.

In the pre-industrial era, mechanisms of community mutual assistance, charity from religious institutions, charitable initiatives of the central government in the form of financing medical institutions and protection from hunger were known in Japan ^{[45, p. 10]}. The emergence of the first systematic rules in the field of social security in Japan began in the 19th century, during the Meiji Restoration era. Japanese officials visited Europe to study the experience of modernization. The example of rapid industrial development in Germany had the greatest impact on Japan. Officials from Japan met with Otto von Bismarck and attended lectures by the author of the term "welfare state" Lorenz von Stein, from whom the first Prime Minister of Japan, Ito, adopted the idea of a "social monarchy" as a moral justification for power. Japanese officials preferred the German model to the French, American or British, because they saw in Germany the loyalty of the people to the monarch, order and stability. Ito established the Imperial, now Tokyo, University in 1886 and the "Society of State Science" to train competent officials according to von Stein's teachings on bureaucracy ^{[49, p. 24-28]}. In 1890, universal schooling was introduced in Japan, its duration was 3 years, the objectives of education were both to promote modernization and to train loyal subjects of the emperor. The Imperial rescript on education, which was distributed to schools, called for filial piety and loyalty to the fatherland, according to Confucian principles. In 1907, education was expanded to 6 years, and at the beginning of the 20th century, adult illiteracy almost completely disappeared ^{[48, p. 19-20]}.

In 1874, a law on assistance to the needy was introduced in Japan due to mass unrest and protests against the Meiji reforms. The assistance was insignificant and was organized within the framework of the old, feudal administrative system ^{[30, p. 286]}. The funds were allocated by the local authorities, if the local authorities could not cope, then the prefecture allocated the funds, if the prefecture could not cope, then the central government. The number of recipients was extremely small ^{[29, p. 102]}. Assistance was provided in kind and in the form of subsidies for food, public works and retraining were also organized ^{[29, p. 22]}. Pensions for the military were introduced in 1875, and for officials in 1884 ^{[45, p. 11]}. In the 1890s, the problem of urban poverty began to be discussed in the country, and the development of social policy measures became a means to prevent the spread of socialist movements that could damage the stability of the state ^{[30, p. 286]}.

In 1911, a factory law was passed, according to which employers had to be responsible for industrial injuries to employees at enterprises employing more than 15 people. In the course of competition between industrial enterprises, some employers began to create employee support programs to prevent employees from transferring to other companies. The development of industrial production in Japan at the beginning of the 20th century, as earlier in Europe, had a negative impact on the health of workers – life expectancy in the country decreased by about 5%, from 44 to 42 years. In 1922, as a reaction to the emergence of trade unions, the law on health insurance was passed, according to which insurance funds were created by enterprises covered by the factory law of 1911, or by local authorities. Contributions to insurance funds were made by employees and employers, and 10% of subsidies came from the government of the country ^{[30, p. 287-288]}. Insurance coverage was low, and by 1930, only 5% of workers were covered.

In 1929, the law on assistance to the poor was introduced. The system strictly distinguished between the able-bodied and the disabled. There were not enough funds from community mutual assistance and local authorities to support those in need according to the rules of 1874, and the share of funding from the central authorities was increased from 10% to 50% ^{[29, p. 102]}. At the local government level, the position of "district commissioners" arose, who were responsible for collecting information about the poor in order to act as intermediaries between the poor and social services, both private and public. They helped the poor find jobs, receive medical services, and send their children to school. The district commissioners insisted on expanding social support programs. After the introduction of the new law on aid in 1932, the number of recipients of aid increased almost 8 times, from 18 to 150 thousand, which, however, was still an extremely small proportion of the population, less than 0.3%. Assistance was still not provided to the able-bodied and was intended only for those who could not be helped by family or community mutual assistance. The district commissioners performed a political and social function – their supervision of the poor was aimed at preventing the radicalization of the least well-off segments of society. The commissioners also performed educational tasks – they urged the poor not to seek help, but to rely on their own strength ^{[30, p. 288-289]}. In 1937, under pressure from public organizations, the law on assistance to widows and orphans was introduced ^{[29, p. 215]}.

The state in Japan began to create medical institutions early. At the beginning of the 20th century, hospitals were established with donations from the emperor's family, in which medical services were provided free of charge to the poor. The Imperial Foundation exists to this day and ensures the functioning of several hundred medical institutions ^{[30, p. 286]}. But most medical institutions in Japan are still private. Due to the crisis of the 1920s, the purchasing power of rural residents declined, and many doctors moved to the cities. Due to the decrease in the availability of medical care, the level of public health deteriorated, and therefore the military began to experience difficulties with recruiting soldiers. Due to military pressure, the law on National Insurance was passed in 1937, the implementation of which was the responsibility of the Ministry of Health and Welfare, formed from divisions of the Ministry of Internal Affairs. According to this law, a health insurance network was created on the basis of local governments. After the expansion of the coverage of the law in 1942, access to medical services was ensured for almost the entire population ^{[30, p. 289]}. Some local authorities, including in Tokyo, did not create health insurance schemes, and participation in these schemes was voluntary, so coverage was incomplete ^{[20, p. 191]}, but it grew quite quickly and by the end of the 1940s exceeded 70% of the population ^[54].

In 1936, the payment of severance payments was introduced, designed to perform the functions of protection against unemployment ^{[29, p. 22]}. The 1941 law created pensions for employees of enterprises. When the pension was introduced, contributions amounted to 11%, but then they were reduced to 3% ^{[45, p. 11]}. The purpose of introducing insurance was to prevent employees from moving from one place of work to another. Payments were due for old age, disability, and funerals ^{[23, p. 39-40]}.

To improve the personnel training system, in 1943, state preferential loans were introduced for higher education for students with low income but high academic performance ^{[50, p. 8]}. In 1947, the duration of compulsory school education was increased to 9 years ^{[48, p. 23]}.

Due to pressure from the Japanese Socialist Party, the new constitution, which came into force in 1947, included a reference to the welfare of the population ^{[30, p. 290]}. According to article 25 of the Constitution, everyone had the right to maintain a living wage, and the state was supposed to promote the expansion of general welfare, social protection and public health ^[4]. The traditional ethics of family care was fixed in article 730 of the Civil Code in 1948, which obliged relatives to take care of each other ^[21]. In 1947, unemployment insurance was introduced in Japan, and in 1949, assistance to the unemployed in the form of organizing public works ^{[29, p. 32]}.

In the 1940s, the district commissioners were renamed the "Welfare commissioners". In 1946, the Living Wage Law was passed, updating the rules of the 1929 law. The Welfare Commissioners made decisions on whether to provide assistance to applicants and to what extent. They usually offered assistance below the maximum amount possible, believing that generous payments would undermine the desire to rely on their own strength. In the 1950s, the right to make a decision on the provision of assistance was transferred to officials ^{[30, p. 299]}. Assistance is provided upon request after a need check. The amount of assistance is calculated by subtracting the cost of living from household income. The cost of living is measured based on 7 categories of expenses – expenses for living, housing, education, medical services, expenses for children, employment-related expenses and funeral expenses. The level of assistance depends on the applicant's age, region of residence, number of household members, and necessary medical expenses ^{[45, p. 42]}.

Expansion of social insurance programs.

In the middle of the 20th century, social policy in Japan began to move from welfare to poverty prevention and from selective programs to universal ones, but the level of social security in Japan remained dependent on employment. Large corporations are characterized by lifelong employment of employees, superannuation payments and corporate trade unions ^{[24, p. 141]}. In the 1940s, the creation of a centralized health care system was discussed, but doctors, as well as many politicians, opposed it. In the 1950s, Japan had four health insurance systems. Large companies acted as insurers for their permanent employees, inheriting the principles of insurance sales offices that developed in the 1920s. Employees of small and medium-sized enterprises were covered by State insurance, which was managed at the national level by the Ministry of Health. Employees of government agencies participated in mutual aid associations. The rest of the population, including the self-employed and the unemployed, were covered by the National Health Insurance system established in 1958, which was the responsibility of local authorities. In the 1960s, Japan became one of the first countries to achieve universal health insurance coverage ^{[30, p. 290-291]}. The procedure for collecting contributions and the share of payments from citizens for services varied significantly, but gradually the system began to work according to the same rules, although some differences between systems and even between individual actors within the systems still persist. With the introduction of universal insurance coverage, government spending began to grow, and the share of citizens' payments in medical expenses decreased from almost 50% in the 1950s to about 15% in the 1970s ^{[56, p. 2]}.

The growth rate of the rapidly developing Japanese economy was 9-10% per year in the 1950s and in the 1960s ^{[51, p. 4]}. The elderly citizens benefited the least from the rapid economic growth in the country, among this category there were the most poor and people with poor health. Despite the expansion of social programs, in the 1960s the popularity of the ruling Liberal Democratic Party of Japan began to decline, and in many municipalities the opposition came to power promising to improve the health care system. At the initiative of local authorities, medical services for elderly citizens have been provided free of charge in several municipalities. In Tokyo, a similar scheme was implemented under pressure from the Socialist Party ^{[30, p. 292-293]}.

In 1954, pensions for employees of enterprises were reformed, and the old law of 1941 was completely updated ^[16]. The level of expected income replacement increased from 40% to 60%, but the contribution rate also increased from 3% to 8% from the 1950s to the 1970s ^{[46, p. 1-2]}. Pension insurance for employees of enterprises began to cover all employees in enterprises with more than five employees ^{[30, p. 293]}.

In 1959, the Law on the National Pension was adopted, which entered into force in 1961. Participation in the national pension has become mandatory. The National Pension Insurance began to provide a basic pension for all residents of the country who have made contributions for at least 25 years ^{[46, p. 2]}, now for 10 years. To receive full payments, contributions should have been made for 40 years ^{[25, p. 55]}. Contributions to the national pension are set annually by the state in the form of a fixed amount and now amount to about 17,000 yen per month (4% of the average salary in the country) ^{[45, p. 13]}. Contributions to the minimum pension can be reduced partially or completely for low-income citizens. The national pension is relatively small and amounts to about 1/6 of the average salary ^{[25, p. 56]}, but at the same time, until 2004, one third of the funds ^{[46, p. 8]} for the payment of the national pension came from the budget, and since 2004 – half ^{[45, p. 16]}.

Adaptation and optimization of social policy measures.

Economic growth in Japan slowed down in the 1970s and averaged about 4% per year in the 1970s and 1980s ^{[51, p. 4]}. In 1995, the Japanese economy peaked and since then periods of growth have been followed by recession ^{[19, p. 168]}. Due to the slowdown in economic growth in Japan in the 1970s, during the fuel crisis, the question arose about optimizing the social policy system. The Ministry of Health and Welfare, as well as some members of the Liberal Democratic Party, advocated the expansion of the welfare state, but the Ministry of Finance and the Prime Minister were opposed. Under Prime Minister Ohira, who held office from 1978 to 1980, a "thought factory" was created to develop a Japanese model of a welfare state, according to which the family would play a key role in social support. Government sources began to talk about the "English disease", linking the low performance of the British economy in the second half of the twentieth century with the English model of the welfare state, which took care of citizens from cradle to grave, which required large budget expenditures, while resources could be directed to strengthening production capabilities ^{[30, p. 293]}.

In 1983, free medical care for senior citizens was abolished. Under the new law on healthcare for the elderly, insurance funds were created for pensioners under 70 and over 70 years old. Subsidies to these funds came from three main health insurance schemes. As a result, the state's share in subsidizing the cost of medical services for the elderly has decreased from 50% to 20%. The healthcare system has been stabilized, but the reforms have become a warning that the cost of healthcare will inevitably rise as the population ages. To finance social policy expenditures, a sales tax of 3% was introduced in 1989, increased to 5% in 1997 ^{[30, p. 293-294]}, and to 8% in 2014 ^{[13, p. VI]}. The rapid increase in spending on the health care system was associated with the aging of the population, which began to manifest itself in the 90s, but many benefits were maintained in Japan so that the availability of medical services to citizens would not decrease.

Direct payments for medical services are not made by those patients who receive social benefits for low-income citizens. There are upper limits on medical expenses, above which the costs will be covered by insurance, not by the patient. The limits depend on the age, income and health status of the patient ^{[38, p. 45]}. Therefore, at the nominal level of standard payment for medical services in the amount of 30% of the cost of services, the actual payments are almost always lower. Health insurance contributions are divided between the employee and the employer and amount to an average of 10% of the salary ^{[39, p. 428-429]}. To reduce costs, in the 1990s, a system of price regulation for medical services was introduced by the social protection councils within the Ministry of Health and Welfare, due to which, according to various estimates, the growth rate of healthcare costs decreased by about 1/6 ^{[38, p. 51]}.

Since 2008, a separate scheme for financing medical services has been in effect for citizens over the age of 75 ^{[13, p. 137]}. The least well-off citizens do not pay contributions ^{[7, p. 113]}. National Health Insurance contributions decrease by 20%, 50% and 70% depending on income ^{[13, p. 122]}. There is also a decrease in the level of expenses for direct payment of medical services – citizens over 70 and 75 pay 20% and 10% of the cost of medical services, respectively, but those elderly citizens who have high incomes pay the standard 30% ^{[7, p. 113]}.

In 2000, an insurance system was introduced to finance long-term care for citizens over the age of 65 or for citizens aged 40-64 with disabilities. Insurance premiums are paid by all citizens over the age of 40. In 2008, a separate program was created for citizens over the age of 75, which is 50% funded by the state, 10% by contributions from senior citizens, which are deducted from their pensions, and 40% by transfers from other insurance programs. Senior citizens with low incomes pay 10% of the cost of long–term care services, other senior citizens - 30% ^{[30, p. 295-296]}.

In 1994, it was decided to gradually raise the retirement age from 60 to 65 years by 2030 ^{[40, p. 93]}. Contributions also continued to grow. In 1985, the contribution rate to pension funds for employees of enterprises was about 12%, in 1995 – 14% ^{[40, p. 74]}. Currently, contributions to the pension system for employees of enterprises amount to 9% for employees and 9% for employers ^{[39, p. 428-429]}. In the 2000s, the issue of pensions gained political importance and became one of the main topics for debate in the 2003 elections ^{[30, p. 296]}. In 2004, a mechanism for macroeconomic indexation of pension payments was introduced, which was based on taking into account life expectancy and changes in the number of people paying contributions ^{[35, p. 41]}. In 2007, the Democratic Party reported that a total of 50 million retirement account records were not integrated into the general system due to accumulated errors by employers, employees and institutions. Due to problems with pensions, the Liberal Democratic Party showed poor results, and Prime Minister Abe resigned. The Democratic Party went to the 2009 elections with a program to increase the minimum guaranteed pension, integrate incorrect data on pension accounts, and combine health insurance systems. These projects were very popular, but were poorly planned and were not implemented ^{[30, p. 296-297]}. In 2015, pensions of employees of enterprises, employees receiving salaries from the budget, and teachers were combined to reduce administrative costs ^{[25, p. 52]}.

In 2016, the Liberal Democratic Party turned back to the topic of pensions, and despite the protests of opposition parties, especially the Communist Party, the principles of calculating pension payments were changed ^{[30, p. 297-298]}. The mechanism of macroeconomic indexation in 2004 was not previously used during the years of negative inflation. Therefore, a rule was introduced according to which pensions were reduced in the event of a decrease in prices and salaries ^{[35, p. 41]}.

About 1/5 of the population uses private pension programs, their popularity is growing, and in 2018 a law was passed according to which small and medium-sized enterprises can pay extra funds to the individual pension accounts of their employees ^{[25, p. 78]}.

About 1.5% of the country's population receives assistance for the poor that is not related to insurance premiums, this share decreased until 1995, but has been growing since then. The recipients are mainly elderly citizens, as well as families with disabilities. Assistance is provided for a limited time, but requests can be sent repeatedly. More than half of the recipients receive assistance for 5 years or more ^{[45, p. 43-45]}.

Social policy was not a priority of Prime Minister Abe's program for the development of Japan's economy in the 2010s, dubbed "Abenomics". The program included the "three arrows" – easing monetary policy, introducing a flexible tax policy, and restructuring the economy with a focus on competition. But in his speech on January 28, 2019 at a meeting of the 198th session of parliament, in which Abe justified the continuation of the project, he spoke about the focus of "Abenomics" to strengthen "social protection for all generations" ^[42]. According to the program, the increase in sales tax from 8% to 10% in 2019 was aimed not at reducing Japan's debt, but at improving the quality of social services for senior citizens and for children ^{[30, p. 285]}.

From the 1940s to the 1980s, the birth rate in Japan gradually declined from 2.5 to 1.5 million per year due to government family planning and fertility reduction programs. In the 1980s, the birth rate fell below the reproduction level ^[28]. The number of births in Japan has now decreased to levels lower than ever in the XX-XXI centuries, less than 800,000 children per year ^{[31, p. 74]}.

The Japanese authorities made attempts to reverse the downward trend in the birth rate already in the 1990s. In 1994, a 5-year project on child care was launched under the title "Main directions of measures to support the future upbringing of children". To implement the plan, the state increased the number of kindergartens. In 1999, a "Basic policy for the development of countermeasures against the decline in fertility" was introduced, within which support for kindergartens was maintained, as well as attention was paid to measures in the field of health, employment and education. In the 21st century, similar programs were also adopted, and the capacity of kindergartens increased by 25%, from 2 million places in 2000 to 2.5 currently ^[28]. In 2019, the state made kindergartens for children from 3 to 5 years old free of charge ^{[31, p. 79]}. The proportion of children attending kindergartens has almost doubled ^[28] and today almost all children over the age of 3 attend kindergartens ^{[32, p. 177]}.

Tax incentives were introduced for companies that supported their employees raising children. Since 1992, employers have been required to provide their employees with parental leave of up to a year, in some cases, when children do not go to kindergartens, the leave can be extended up to two years. Also, for those employees whose children have not reached the age of 3, a reduced working day is provided ^[28]. In Japan, there are monthly payments of 15,000 yen (4% of the average salary) for children under 3 years old and 10,000 yen (about 2.5% of the average salary) for children from 3 to 15 years old ^{[31, p. 79]}. If for adults, insurance covers on average 70% of the cost of medical services received, then for children – 80% up to 6 years old ^{[20, p. 197]}.

According to the results of research, including sociological surveys, among the main prerequisites for a decrease in the birth rate, such reasons as high child-rearing costs, late age of marriage due to changes in the labor market and an increase in the number of working women, the inability to combine childcare with work were identified. Despite many fertility support programs, the decline in the birth rate in Japan has not stopped, as in other countries, in particular, in Korea ^[28].

Japan, like other East Asian countries, is characterized by high expectations of education as a means of social mobility, which goes back to the traditions of Confucian scholarship and promotion through exams. The growth of mass demand for education began in the 1950s, and in 1962 a public movement was created in support of expanding the availability of education in high schools ^{[48, p. 27]}. In 2010, under the rule of the Democratic Party, high school education became free for public schools, and private schools were co–financed by prefectures ^{[50, p. 4]}. The education system in Japan is one of the best in the world, as demonstrated by the high results of Japanese students in the international student assessment ranking of the Organization for Economic Cooperation and Development development (PISA) ^[41]. In the second half of the 20th century, the number of higher educational institutions and the share of citizens with higher education grew rapidly, increasing from 10% in the 1960s to 40% by the 1980s ^{[48, p. 27]}. Since the 1980s, the country has had a single exam for admission to higher educational institutions, but Many universities conduct additional tests ^{[48, p. 36]}. Higher education in Japan is paid, today its cost is on average about 500,000 yen per year, or about one monthly salary, but preferential loans are available ^{[32, p. 332]}.

Volunteering is highly developed in Japan, which allows you to reduce the cost of social programs. There are tens of thousands of volunteer organizations and hundreds of thousands of volunteers in the country. The Welfare Commissioners Service is embedded in the system of state bureaucracy, but its employees are volunteers. Welfare commissioners and other volunteers working with government programs are approved by the Ministry of Health and Welfare and local authorities. They help the elderly, the poor, the disabled, and single-parent families ^{[30, p. 299-300]}.

Advantages and disadvantages of the welfare state in Japan, comparison with other states.

A SWOT analysis, that is, a comparison of strengths and weaknesses, opportunities and threats for the Japanese welfare state, shows the following results.

The strengths of the Japanese welfare state can be attributed to the overall high level of development of healthcare, long-term care, pension provision and the completeness of coverage of the population by social insurance systems.

The weaknesses of the Japanese welfare state are organizational fragmentation and the coexistence of virtually different insurance schemes within a nominally unified system, which increases administrative costs, necessitates state co–financing of programs or failures in systems that entail negative political consequences, as in the case of the pension scandal of 2007.

The opportunities for the development of the Japanese welfare state are the continuation of the integration of social insurance systems in recent decades, the promotion of private initiatives, the expansion of support for volunteerism widespread in Japan and the traditions of family and local mutual assistance, which currently act as significant factors strengthening the sustainability of the welfare state.

The main threats faced by the welfare state are the aging of the population, a decrease in the birth rate, as well as a significant amount of debt accumulated by the state, which reduces the ability to increase spending in the social sphere.

The level of development and effectiveness of the functioning of the welfare state in Japan can be demonstrated in comparison with other countries. The policy of ensuring the welfare of citizens by the state, according to one of the early typologies of Wilensky and Lebeau, can be institutionalized or implemented according to a residual principle ^{[52, p. 138]}. An institutionalized social policy presupposes a developed welfare system that helps citizens in most life situations – helps in raising children, protects against unemployment, illness and disability, in old age, helps with funeral expenses. Social policy implemented on a residual basis means that the state can provide minimal support to the most needy and citizens are expected to rely on their own strength, including participating in mutual assistance schemes, or receiving assistance from family members. An institutionalized welfare state currently exists, in addition to Japan, in the countries of the European Union, in the states that were part of the USSR, in Britain and its former colonies, that is, in the USA, Canada, Australia and New Zealand, in Korea, in China and in several other small developed countries like Israel and Singapore. In these countries, 20-30% of GDP is spent on a set of social tasks either through redistribution through taxes or through state-established insurance mechanisms. In the rest of Asia, as well as in Latin America and Africa, a residual approach to social policy prevails, partly due to a shortage of resources, partly due to underdeveloped institutions and the predominance of old mutual assistance schemes, partly due to the low proportion of the elderly population. The level of social spending in these countries is less than 20% of GDP, more often less than 10% of GDP, and social programs usually do not involve universal coverage. Such programs include government assistance to private pension accounts, as in Mexico ^{[27, p. 125]}, and corporate pension funds, as in Brazil ^{[14, p. 156]}. There are also schemes to help the most needy, in cash, as in Indonesia ^{[15, p. 367]}, or in kind, as in India ^{[43, p. 60]}. A typical type of social support for North Africa and the Middle East is subsidizing the cost of goods and services. In the Arab countries in the 1950s and 1970s, a kind of "social contract" was formed, according to which the authorities acquired the loyalty of the population with the help of generous social programs funded by proceeds from the sale of resources. The scheme was created in Egypt and Syria, but due to the exhaustion of hydrocarbon deposits and population growth, the most generous schemes were able to save only those states in the region that were most provided with resources and in which the population was relatively small - the United Arab Emirates, Qatar and Saudi Arabia. Redistribution programs are still being maintained and expanded in these countries, thanks to which citizens - but not migrants, who make up a significant proportion of the population in Saudi Arabia and the majority in the UAE and Qatar – have access to healthcare, subsidized jobs, pensions and assistance programs for low–income people ^{[26, p. 35-37]}. In recent years, comprehensive schemes have also emerged, for example, in Turkey, in 2006, the pension system was consolidated ^{[55, p. 55]}, in 2012 – medical insurance ^{[55, p. 65]}. Japan combines many of the advantages characteristic of countries with a residual social support system, namely, developed mutual assistance and integration of private and public schemes, with the advantages of States with institutionalized social policies, namely a functional pension system and a health insurance system. The Japanese "social contract" in the context of social security partly resembles the paternalistic ethics of the Arab states, which promised benefits to citizens in exchange for loyalty, but differs significantly. Firstly, there is no natural rent in Japan due to a shortage of minerals, and, therefore, it is impossible to redistribute export earnings. Secondly, corporations, not just the authorities, have been the recipients of loyalty in Japan since the very beginning of building social policy. Thirdly, insurance systems were formed in Japan quite early, assuming not vertical, but horizontal redistribution. Japan shares Confucian ethics with neighboring countries in the region – the Republic of Korea and China – as a result of which many authors spoke about the "Confucian" model of the welfare state ^[22], rapid modernization with an increase in the welfare of the population due to economic growth and high employment, and the great role of corporate insurance schemes. The Japanese welfare state is currently ahead of Korea and China both in terms of spending, and in terms of the quality and coverage of programs, but other states are rapidly approaching Japan, especially Korea. Most European and Russian countries are characterized by a greater number of social programs for different categories of citizens and programs to subsidize the cost of services for the population or targeted payments than in Japan. Social spending in these countries is comparable to or exceeds Japanese spending, as in France, Germany and the Scandinavian countries ^[35], including due to more generous family benefits. According to the Esping-Andersen classification, the American model of the welfare state is an example of a liberal state ^{[17, p. 179]} and, basically, differs significantly from the Japanese one. Aspects common to Japan and the United States are the minimum system of assistance to the most needy and the principle of "least acceptability", according to which any job is more profitable than receiving benefits, as well as the large role of the private sector in the social sphere and stimulating employment. The differences are in the administrative model, in the United States, regional authorities and entities responsible for the functioning of the health and pension system have more autonomy, which results in a greater variety of rules, as well as in the role of tax benefits as a key mechanism of social policy in the United States ^{[12, p. 95]} and an insignificant element of the welfare state in Japan.

Despite the challenges associated with an aging population, the healthcare system in Japan shows high efficiency and is significantly ahead of the United States. Unlike the United States, all Japanese citizens have health insurance, the quality of public health in Japan is higher than in the United States, and Japanese healthcare consumes fewer resources than American, although the level of costs is rapidly increasing. If in the 1990s, health care costs in Japan amounted to about 6% of GDP against 7.5% on average among developed countries and 13% in the United States ^{[33, p. 71]}, now they amount to 11.5% of GDP against 9% on average among the OECD and 16.5% in the United States ^{[34, p. 155]}. Almost half of the expenses of the healthcare system are carried out from insurance premiums of citizens, more than a third – from government subsidies, and 1/6 – from direct payments of citizens ^{[20, p. 191]}, which is lower than the average among OECD countries of 1/5 ^{[34, p. 155]}. Life expectancy in Japan was 84 years in 2024 ^{[53, p. 16]}, according to this indicator, the country was ahead of all major states. The "burden of disease", that is, the number of years lost due to illness per 100,000 people, in Japan is also the lowest among large countries and amounts to 16 thousand against an average of 20 in Europe, 26 in the USA and 37 in Russia ^[18].

A comparison of the effectiveness of pension systems based on such criteria as the poverty level of citizens over 65 years of age compared with the average poverty level of the entire population shows that the pension system in Japan is somewhat inferior to European ones, but comparable to the American one. In Japan, about 20% of citizens over the age of 65 have incomes below 50% of the national median, while the average poverty rate for the entire population is 15% ^{[36, p. 199]}. This means that pensions do not allow you to reimburse the income that citizens received during their work. The replacement ratio, that is, the ratio of pensions to salaries, in Japan is about 30-40% against the average for developed countries of 50% ^{[36, p. 151]}. The share of pensions in Japan's GDP is comparable to the average for developed countries and amounts to 12% ^{[36, p. 213]}.

Conclusion

A feature of Japan since the early years of the introduction of a systematic social policy has been the combination of a prominent role of state redistribution and reliance on insurance premiums. Even the earliest measures involved the joint participation of municipal, regional and central authorities, as well as private players. Common principles guided the activity of many participants. Also, starting with early social support measures, some programs received state subsidies, and subsequently a redistribution was used between more sustainable programs and programs in which demand for services and payments exceeded contributions, as in the case of long-term care programs for the most elderly citizens. This allocation of costs made it possible to maintain and expand program coverage while reducing the burden on individual system participants.

Pressure from interest groups, political parties, and administrative and bureaucratic groupings played a significant role in the formation of the welfare state in Japan. The formation of the Japanese social policy system was greatly influenced by the cultural traditions of the country, thanks to which a significant part of the burden associated with helping those in need falls on their relatives and volunteers.

In recent decades, the country has carried out many reforms designed to adapt the current system to new demographic and economic conditions. On the one hand, the government tried to reduce the burden on the budget associated with financing some programs. Insurance premiums were increased to finance pensions and the health care system. An insurance system has been introduced and expanded to finance long-term care. The retirement age was increased from 60 to 65 years. On the other hand, in some areas, primarily related to solving the problem of the decline in the birth rate, expenditures have been purposefully increasing. Programs were created to support families with children, the state invested significant resources in increasing the availability of preschool education, and also made high school tuition free.

Despite the serious challenges it faces and the serious increase in risks to budget sustainability due to increased spending, the welfare state in Japan is one of the most effective in the world in terms of aggregate indicators. The system consumes the same amount of resources as welfare states in European countries, or less, and the effectiveness of Japanese programs – coverage of the population by programs and accessibility of benefits to the population – is comparable to European ones. In terms of the quality of organization and efficiency of healthcare, Japan is a world leader, which is manifested both in the world's highest life expectancy, the lowest "burden of diseases", and a lower share of direct payments from citizens for medical services than in other developed countries. The pension system in Japan lags slightly behind European ones, which is reflected in a higher level of poverty among the elderly population than the national average. Demographic programs have not led to an increase in the birth rate, but this problem is not unique to Japan. The Japanese experience in optimizing expenditures while maintaining social programs is of great value to other states, although a number of Japan's successes in the field of social policy are associated with local culture and peculiarities that developed during the years of rapid economic modernization in the 20th century.