The principle of popular sovereignty, or kokumin shuken (国民主権) in Japanese, is a cornerstone of Japan's post-World War II constitutional order. Enshrined in the Constitution of Japan, promulgated in 1946 and effective from 1947, this principle marked a radical departure from the Meiji Constitution of 1889, under which sovereignty resided with the Emperor. For US companies and investors operating in or engaging with Japan, understanding this fundamental tenet is not merely an academic exercise; it shapes the entire governance structure, the legal framework for fundamental rights, and, consequently, the broader business environment, influencing stability, predictability, and the rule of law.

This article explores the principle of popular sovereignty as it is articulated in the Japanese Constitution, its manifestations in the country's system of governance, and its indirect yet significant implications for businesses.

Part 1: The Constitutional Declaration of Popular Sovereignty in Japan

The shift from imperial sovereignty to popular sovereignty is arguably the most profound transformation brought about by the current Japanese Constitution. This principle is unequivocally stated in its Preamble and foundational articles:

• The Preamble: The very first sentence of the Preamble declares: "We, the Japanese people, acting through our duly elected representatives in the National Diet...do proclaim that sovereign power resides with the people and do firmly establish this Constitution." It further states that "government is a sacred trust of the people, the authority for which is derived from the people, the powers of which are exercised by the representatives of the people, and the benefits of which are enjoyed by the people."
• Article 1: This article defines the new role of the Emperor, directly linking it to popular sovereignty: "The Emperor shall be the symbol of the State and of the unity of the People, deriving his position from the will of the people with whom resides sovereign power."

This explicit vesting of sovereignty in the people means that the ultimate source of all governmental authority and legitimacy is the Japanese populace.

The "August Revolution" Theory: A Conceptual Bridge

The transition from the Meiji Constitution, which was granted by the Emperor, to the current Constitution, which declares popular sovereignty, presented a complex legal and theoretical challenge regarding constitutional continuity. A highly influential theory in Japanese constitutional law, known as the "August Revolution" theory (Hachigatsu kakumei setsu - 八月革命説), was articulated by the constitutional scholar Toshiyoshi Miyazawa.

Miyazawa argued that Japan's acceptance of the Potsdam Declaration in August 1945, which called for the establishment of a peacefully inclined and responsible government "in accordance with the freely expressed will of the Japanese people," effectively constituted a legal and political revolution. While the form of amending the Meiji Constitution (via its own amendment procedures) was followed to enact the new Constitution, the substance of sovereignty fundamentally shifted from the Emperor to the people. This theory provided a conceptual bridge, explaining how a new constitutional order based on popular sovereignty could legitimately emerge from the old imperial system, thereby ensuring a degree of legal continuity while acknowledging a radical break in fundamental principles. This understanding underscores the profound and deeply rooted nature of popular sovereignty in Japan's contemporary legal identity.

Part 2: Manifestations of Popular Sovereignty in Japan's Governance Structure

The principle of popular sovereignty is not merely an abstract declaration; it is woven into the fabric of Japan's governmental structure, defining the roles and legitimacy of its key institutions:

The Emperor as a Symbol

As stipulated in Article 1, the Emperor's role was dramatically redefined. No longer the locus of sovereignty or a holder of governmental powers, the Emperor is now "the symbol of the State and of the unity of the People." His position and all his acts in matters of state (which are strictly limited and enumerated in the Constitution, such as convocation of the Diet and attestation of appointments) require the advice and approval of the Cabinet (Article 3 and 7). This symbolic role, deriving its legitimacy from the "will of the people," stands in stark contrast to the pre-war era and reinforces the principle that actual governing power emanates from the populace.

The National Diet: The "Highest Organ of State Power"

Article 41 of the Constitution declares that "The Diet shall be the highest organ of state power, and shall be the sole law-making organ of the State." This is a direct manifestation of popular sovereignty.

• Elected Representatives: The Diet is bicameral, consisting of the House of Representatives and the House of Councillors, both composed of members elected directly by the people (Articles 42 and 43).
• Sole Law-Making Authority: The Diet's exclusive authority to enact laws means that the rules governing society and business are, in principle, created by those chosen by the people. This ensures that laws have democratic legitimacy.
• Accountability: Diet members are accountable to their constituents through regular elections.

The Cabinet and Executive Power

Executive power is vested in the Cabinet (Article 65), which is collectively responsible to the Diet (Article 66).

• Designation of the Prime Minister: The Prime Minister is designated from among the members of the Diet by a resolution of the Diet (Article 67). This ensures that the head of the executive branch has the confidence of the people's elected representatives. The Emperor then formally appoints the Prime Minister as designated.
• Appointment of Ministers: The Prime Minister appoints (and can dismiss) the other Ministers of State, a majority of whom must be chosen from among the members of the Diet (Article 68).
• Collective Responsibility: If the House of Representatives passes a non-confidence resolution, or rejects a confidence resolution, the Cabinet must resign en masse, unless the House of Representatives is dissolved within ten days (Article 69). This mechanism of accountability to the legislature is a key feature of Japan's parliamentary cabinet system, linking executive power back to the will of the people as expressed through their representatives.

The Judiciary and Judicial Review

The judiciary, while independent, also operates within the framework of popular sovereignty.

• Independence of the Judiciary: All judges are independent in the exercise of their conscience and are bound only by the Constitution and the laws (Article 76). This independence is crucial for upholding the rule of law.
• Judicial Review: Article 81 grants the Supreme Court the "power to determine the constitutionality of any law, order, regulation or official act." This power of judicial review, while exercised by courts whose judges are not directly elected (with the exception of a popular review mechanism for Supreme Court justices after their appointment and at subsequent general elections - Article 79), serves as a vital check on the legislative and executive branches, ensuring that governmental actions remain within the bounds of the Constitution established by the sovereign people.
• Upholding Fundamental Rights: The judiciary plays a critical role in protecting the fundamental human rights guaranteed by the Constitution, which themselves are seen as flowing from the dignity inherent in a system of popular sovereignty.

Part 3: Popular Sovereignty, Fundamental Human Rights, and the Rule of Law

The principle of popular sovereignty is inextricably linked to the robust protection of fundamental human rights and the establishment of the rule of law in Japan.

• Inherent and Inviolable Rights: Chapter III of the Constitution (Articles 10 to 40) enumerates a wide range of fundamental human rights, which Article 11 declares "eternal and inviolate." Article 97 further states that these rights are "fruits of the age-old struggle of man to be free" and are "conferred upon this and future generations in trust, to be held for all time inviolate." The philosophical underpinning is that these rights are not granted by the state but are inherent to individuals, whose collective will forms the basis of legitimate government.
• The Rule of Law: Popular sovereignty necessitates the rule of law. If the people are sovereign, then the government they establish must operate according to laws made by their representatives, not by arbitrary will. All governmental actions must have a legal basis and are subject to legal limits and judicial scrutiny. This creates a predictable legal environment where individuals and businesses can understand their rights and obligations.
• "Public Welfare" as a Limitation: While fundamental rights are paramount, they are not absolute. The Constitution permits restrictions on rights when necessary for the "public welfare" (kōkyō no fukushi - 公共の福祉). The interpretation of "public welfare" is itself a complex legal issue, but within a system of popular sovereignty, it is generally understood to mean that restrictions must be democratically legitimized (i.e., based on laws passed by the Diet) and must be necessary and proportionate to achieve a legitimate societal goal, rather than being arbitrary impositions.

Part 4: Implications for the Business Environment in Japan

While popular sovereignty is a political and constitutional principle, it has significant indirect implications for the stability, predictability, and nature of the business environment in Japan:

1. Political Stability and Democratic Processes:
   • The establishment of popular sovereignty as the basis of government has contributed to Japan's long-standing political stability as a parliamentary democracy. Changes in government occur through regular, free, and fair elections.
   • Policy-making, at least in principle, involves public discourse, parliamentary debate, and processes that allow for various interests to be heard. This generally fosters a more stable and predictable environment than autocratic systems.
2. Rule of Law and Legal Predictability:
   • The supremacy of laws enacted by the Diet and the availability of judicial review mean that businesses operate within a framework governed by published laws rather than arbitrary decrees.
   • This provides a degree of legal predictability crucial for long-term business planning, investment decisions, contract enforcement, and the protection of property rights (guaranteed under Article 29).
3. Regulatory Environment:
   • Regulations affecting businesses (e.g., environmental, labor, competition, financial) are created through the legislative process in the Diet, or by executive agencies acting under statutory authority delegated by the Diet.
   • In theory, this process allows for public input and scrutiny, and regulations should be aimed at serving the public interest. Understanding the legislative and regulatory development process is key for businesses wishing to anticipate or influence policy. Foreign businesses often engage through industry associations or public consultation procedures when available.
4. Fundamental Rights as a Framework for Business:
   • Constitutional rights, while primarily directed at constraining state power, shape the overall legal environment in which businesses operate.
   • Freedom of Occupation (Article 22): Guarantees the right to choose one's occupation, to the extent that it does not interfere with the public welfare. This underpins free enterprise.
   • Property Rights (Article 29): Protects the right to own and hold property, which can only be taken for public use with just compensation.
   • Equality Under the Law (Article 14): Prohibits discrimination in political, economic, or social relations on grounds of race, creed, sex, social status, or family origin. This has implications for employment practices and market fairness.
     The "public welfare" limitation on these rights is interpreted and applied by the Diet and the courts within this democratic framework.
5. Corporate Governance and Societal Expectations:
   • While popular sovereignty does not directly dictate specific internal corporate governance rules for private companies in the same way it structures the state, the broader democratic values and emphasis on public accountability prevalent in a society founded on this principle can influence societal expectations.
   • There is a growing, albeit evolving, expectation in Japan for corporations to demonstrate social responsibility, transparency, and accountability not just to shareholders but also to other stakeholders such as employees, consumers, and local communities.

Part 5: Popular Sovereignty in Practice – Dynamics and Considerations

The ideal of popular sovereignty is realized through ongoing democratic practices, which have their own dynamics and challenges:

• Voter Participation and Public Engagement: The level of voter turnout and active public engagement in political processes can influence how effectively "the will of the people" is translated into policy.
• Influence of Bureaucracy and Interest Groups: Like any representative democracy, Japan's policy-making is subject to the influence of a powerful career bureaucracy and various organized interest groups, which can sometimes complicate the direct expression of popular will.
• Constitutional Amendment Debates: The Japanese Constitution has famously never been amended. The procedure for amendment (Article 96) requires a two-thirds supermajority in both houses of the Diet, followed by a majority approval in a national referendum, directly involving the sovereign people. Ongoing debates about potential constitutional revisions (e.g., regarding Article 9, the peace clause) reflect the dynamic nature of how popular sovereignty might be exercised in re-shaping the nation's fundamental law, though such changes have proven exceptionally difficult to achieve.

Conclusion

The principle of "people's sovereignty" is far more than an abstract theoretical concept in Japan; it is the lifeblood of its post-war constitutional and political order. It has fundamentally reshaped the nation's governance from an emperor-centric system to one where ultimate authority rests with the citizenry. This transformation has fostered a stable parliamentary democracy, a commitment to fundamental human rights, and an adherence to the rule of law.

For US businesses, this constitutional bedrock translates into a generally predictable and legally ordered environment. While Japan's political and regulatory systems have their own distinct characteristics and complexities, the overarching principle of popular sovereignty ensures that government is accountable, laws are made through democratic processes, and fundamental rights provide a framework for economic and social activity. Understanding this foundational principle offers a crucial lens through which to view the broader operational context in Japan.