The sudden resignation of Yasuo Fukuda, Japan's Prime Minister, has brought with it an eerie sense of déjà vu. Mr Fukuda's predecessor stepped down almost a year ago, after a similarly uninspiring year in office. Neither man had managed to carry forward the reforming zeal of the energetic Junichiro Koizumi, who steered the country back to economic health between 2001 and 2006. It is beginning to look suspiciously as though Japan's Liberal Democratic Party (LDP) is sliding back into its bad old ways.

When Mr Koizumi stepped down, the big question for Japan was whether he had built up a sufficient momentum to sustain his reforms. He had confounded those who believed that the Japanese Government could never get the whip hand over the bureaucracy, and he had begun to shake up the all-too cosy relationships between government and business.

He saw that it was essential to reduce subsidies for infrastructure and industry, and to cut the bad debts of the banks. His decision to privatise the post office was symbolic of his determination to root out the pork-barrel politics that had saddled the country with debt and waste. Not all of the LDP were convinced by Mr Koizumi's economically liberal vision. Shinzo Abe, his successor, had, within weeks, readmitted to the party some of those who had rebelled against postal privatisation. Reform ground to a halt, as did his tenure. The question of whether Mr Abe's administration had been an aberration was then answered by Mr Fukuda's lacklustre performance. His latest reshuffle removed potential reformers from the Cabinet. And on Friday he presented a £60 billion fiscal stimulus package that included many pork-barrel spending projects, bailouts for businesses and populist measures to lower road tolls and wheat prices that will be costly and do little for economic growth.

It is not clear what tipped him into resignation. Mr Fukuda was unlucky in part to have presided over the end of Japan's longest period of postwar economic growth. He faced an Upper House dominated by an opposition that has been determined to block and delay legislation such as pensions reform. But he also failed to stand up to conservative elements in his own party and to tackle, for example, Japan's wariness of foreign investment. Earlier this year Peter Mandelson called the country the “most closed investment market in the developed world”, remarking on how astonishing it was that the EU traded more with Switzerland than Japan. Vodafone pulled out of Japan two years ago, and other investors have followed suit, contributing to the relatively anaemic performance of the Japanese stock market.

Mr Fukuda's move increases the likelihood of a general election in the next few months. The LDP seems likely to go into that election deeply divided on some of the most basic principles of monetary and fiscal policy. If the next prime minister is too conservative, Japan will continue to lack political leadership to match its economic power.

The verdict on the past two years must be that the Japanese people have not been served well. A public that seemed to want more of Koizumi's charisma and reforming zeal has been handed a return to corporatism and complacency.