TOKYO -- In the midst of its worst economic malaise of the postwar era, Japan is preparing to oust its longtime ruling party in favor of new leaders with ambitious ideas but an untested ability to get things done.

A Dynasty on the Brink

Trace the recent history of the Liberal Democratic Party.

Polls show voters in Sunday's election heavily favor the Democratic Party of Japan, an 11-year-old collection of market reformers, union leaders and consumer activists that has never held full political power. A landslide would give the group broad powers to enact an agenda that includes an elaborate domestic spending plan, tough new climate-change rules, an overhaul of Japan's bloated government bureaucracy, and a reassessment of the nation's longtime ties to the U.S.

A landslide also would mark a sound rejection of Prime Minister Taro Aso and the Liberal Democratic Party, which has ruled Japan almost continuously since 1955 but has been hobbled by a weak economy and a series of scandals. Its cozy relationships with business, bureaucracy and the U.S. have become liabilities as incomes have fallen and more Japanese begin to question the nation's direction.

It's unclear how far a victorious DPJ can go. Japan's massive debt could hobble its social-spending plans. Many of its members will have to learn the ropes as they take powerful government positions. Others are longtime political veterans who defected to the DPJ when the LDP began to struggle and may be reluctant to endorse big changes.

A DPJ victory also would test Japan's appetite for change. Young, urban voters in particular are attracted to a platform that endorses change in a number of areas, including allowing married women to keep their original names. But many of Japan's older voters favor only jettisoning the LDP and may balk at bigger changes.

"There is an irresponsible stance of 'I don't care what, I just want a change,"' said Fumio Kyuma, a 68-year-old LDP veteran, nine-time incumbent and twice former defense minister, who represents the area around the city of Nagasaki in Parliament. "People are looking for a leadership change just for the sake of leadership change."

His challenger: Eriko Fukuda, a 28-year-old political novice who became a national figure after battling the government over a coverup of information about tainted blood products -- the cause of her contraction of hepatitis C as an infant.

"This election is a battle for the survival of those who are disadvantaged and we must not fail," said Ms. Fukuda at a recent rally. In local polls she leads Mr. Kyuma, who has repeatedly apologized for a verbal gaffe two years ago in which he said the 1945 atomic bombing of the city by the U.S. "could not be helped."

Taking a page from U.S. President Barack Obama's campaign book, the DPJ has made "Change" the slogan for its campaign, and unleashed a pack of candidates this is distinctively younger and has more females than the old guard of the LDP. No longer able to count on the party machine to drum up the necessary votes to win, many LDP heavyweights have been forced to leave their offices and slug it out on campaign trails for the first time in many years.

To woo Japanese voters discouraged by nearly two decades of an economic slump and worried about the increasing burden of a rapidly aging society, the DPJ has put forth bold proposals aimed at propping up people's livelihoods. Families are promised an allowance of $3,300 a year for every child age 15 and under, free high-school education and the elimination of highway tolls.

Businesses, already reeling from the most serious recession in decades, are asked to boost wages while forgoing the hiring of temporary workers on factory floors. While both parties are proposing similar measures, the union-favored DPJ's policies are even more worker-friendly. The DPJ also is proposing stricter rules on greenhouse-gas emissions, a step corporate executives say will restrict growth in Japanese manufacturing.

To pay for its expensive social programs and accelerate policy shifts, the DPJ wants to implement a sweeping change in the administrative branch. That means eliminating jobs and curtailing the influence of bureaucrats in Tokyo, who have loyally assisted the LDP's rule in exchange for job protection. Following the example of the British system, the DPJ wants to strengthen the role of the prime minister and cabinet, and send 100 lawmakers to ministries to instruct and oversee bureaucrats.

"Bureaucrats can't make dynamic policy changes because they are always burdened by past policy precedents," says Kazuya Mimura, a 33-year-old DPJ candidate who left his own bureaucratic position in the Ministry of Economy, Trade and Industry last year. "They have to be made by politicians."

Reflecting its main support base of city dwellers and younger voters, the DPJ adopts more liberal stances on social issues such as the participation of women and foreigners in society. If the DPJ keeps its word, working women will be allowed to keep their maiden names, while stay-at-home wives will lose their tax-exemption status.

In international relations, it wants to loosen ties with the U.S. and shake off the bitterness left among Asian neighbors since World War II. To do so, it is willing to discontinue controversial visits by political leaders to a shrine commemorating Japan's war dead, even at the risk of angering politically active groups of veterans and war widows.

The changes are aimed at half a century of political stagnation. "When one party stays in power for five decades, various evil side effects naturally emerge," says Mitsuo Ohashi, chairman of Showa Denko KK, a big chemical company, who says he opposes the DPJ's initiatives but believes the LDP is responsible for some of its own problems. "Now sensing the possibility of a change in administration, people are suddenly full of expectations."

Whether the DPJ can really implement these changes may depend on how far Japan itself is willing to challenge some of the fabric of its society.

Unlike in the heyday of the LDP's rule in the 1970s and 1980s, when Japan was united in the pursuit of economic growth, the nation today is divided.

Corporate executives are looking to cut costs and shift operations abroad as their traditional strength in exports faces greater competition. Japan's share of world exports is an estimated 4.1% this year, roughly half the level of 15 years ago.

Meanwhile, ordinary workers have seen their income and job security slip. As retirees try to lock in generous pension and health benefits as a reward for their past work, the young feel the burden of paying for such expenses and worry whether anything will be left when their generation gets old. Japan's per-capita GDP made it No. 4 in the world 20 years ago. Today, it is no longer in the top 10.

Yumiko Kosugi lost her job as a temporary worker in January when the Tokyo travel agency where she worked began suffering from falling sales to its main client, Toyota Motor Corp. The 31-year-old mother of an infant girl must go back to work soon to supplement the income of her husband, but worries she may not be able to find day care.

"Politicians always give us sweet talk before elections," Ms. Kosugi said. "I don't expect anything to change no matter who becomes prime minister or which party takes power."

Others are skeptical about the DPJ's ability to turn its promises into action.

The party itself encompasses both activists and political insiders who may not reach agreement. DPJ President Yukio Hatoyama -- widely assumed to be Japan's next prime minister -- and Secretary-General Katsuya Okada both hail from wealthy families with powerful business connections, while Azuma Koshiishi, an acting president, is a former union leader. One top leader, Ichiro Ozawa, is a former LDP heavyweight known for his behind-the-scenes political maneuvering.

The DPJ's desire to eliminate jobs for bureaucrats, for example, could be compromised by its needs to please an important constituency: labor unions of government workers.

How to fund its hugely expensive social programs also remains vague. Even without added expenses, Japan already sits on a huge fiscal deficit. According to the Organization for Economic Cooperation and Development, Japan's financial liabilities could approach 190% of gross domestic product this year. Still, fearing a voter revolt, the DPJ rules out raising the consumption tax for at least four years, closing the most effective way to raise tax revenues.

The DPJ estimates its programs to help households, including the child allowance and eliminating expressway tolls, will cost a total of 16.8 trillion yen ($177 billion) when they are fully implemented in the fiscal year beginning 2013, but says the amount can be covered by cost savings through government overhaul and mobilizing untapped financial reserves.

"Their policies seem to focus on giving lots of money to lots of people," says Hiroyuki Hosoda, the LDP's secretary-general.

The party also wants companies to boost the minimum wage to 800 yen an hour from the current range between 618 yen to 739 yen, and eventually raise it to 1,000 yen. Companies also are asked to turn as many temporary jobs as possible into permanent positions, and stop hiring temp workers altogether on factory floors.

Business executives say these steps will erode the competitiveness of Japanese companies against their global competitors, and eventually pull down Japan's economic growth rate.

"They say 'People's Lives First' but without economic growth, people are not going to feel better off," says Mr. Ohashi, the chemical-company chairman.

Mr. Ohashi, who heads the political committee of Nippon Keidanren, or Japan Business Federation, a powerful business lobby, says that instead of reducing temp workers, Japan needs steps to help its economy compete globally and attract foreign investments. The most effective, he says, will be a sharp cut in the corporate tax rate to below 30% from the current level of 40%, among the highest in the world.

The DPJ's hefty fiscal spending could help the economy, "but whether these measures will be able to lift growth in the long term is questionable," says Kathy Matsui, chief Japan strategist for Goldman Sachs. After contracting for five quarters, Japan's GDP grew by an annualized pace of 3.7% in the April-June quarter.

Despite the difference in economic policies, the main difference between the DPJ and LDP may lie in their willingness to challenge traditional social customs, such as seniority-based organizations, and low participation of women and foreigners in the society and workplace, which is often blamed as a root cause of the stagnation in the economy. While the DPJ is still dominated by a number of traditional insiders, the party has twice as many women running in Sunday's elections, and the average age of its candidates is about six years younger than the LDP ballot.

The DPJ says it will seek to revise a law so married couples can use separate last names, instead of forcing one -- usually the woman -- to change her name. It also plans to eliminate a tax exemption for stay-at-home spouses, a measure that has kept many women from going back to work after childbirths and drawn criticism from working women as unfair.

"These things have been sucking energy out of women in this country as we try to work hard on our jobs and contemplate starting families," says Fumie Furukawa, a 36-year-old college history instructor from Gifu prefecture near Nagoya. She and her husband, a hospital administrator, have lived as a married couple for five years but legally remained single so Ms. Furukawa could keep her name. If the law is changed, she says, they will probably finally tie the knot.

"I might even consider having a child," she adds.

Mobilizing younger voters would be a feat in Japan. In the last lower-house elections in 2005, only 46% of voters in their 20s cast their ballots, compared with 83% for those in their 60s, a disparity many younger voters blame for labor and pension rules that they believe hurt them at the expense of the older population. People in their 20s and 30s make up a majority of the temp worker population.

The DPJ is courting the dissatisfaction of younger voters like Kensuke Harada, a junior at the University of Tokyo, who formed a nonpartisan group called ivote last year to get people in their 20s to vote. His group has thrown parties at pubs that bring together students and young politicians, and has solicited online pledges to vote in Sunday's elections. As of Thursday, it received 1,140 pledges.

"Everyone knows Japan's pension system has a problem and we all wonder what will happen when we reach our 50s and 60s," the 23-year-old Mr. Harada said. "But politicians don't pay attention because the population of young people is so small and we don't even vote."

Last Sunday, Mr. Harada led a parade of several dozen students through the streets of Shibuya, a Tokyo neighborhood with trendy boutiques and popular student watering holes. Playing on a Japanese pun on the words for "politics" and "festival," many wore the traditional robed garb of a summer festival. Others wore Santa Claus hats, while one marched wearing the full-body costume of the local election committee's mascot, a grinning yellow cat with wings.

"It's the biggest festival of the year," they chanted as they passed out leaflets telling young people to vote. "Join the fun and change our future!"

The parade attracted a few amused onlookers. Saya Takasaki, 25, watched the parade in Shibuya while bicycle-riding with her boyfriend. She said she wasn't really interested in politics before, but this time she planned to vote. "I feel we have to make Japan a much better place to live," she said, adding that she hasn't yet decided how she will vote.

Write to Yuka Hayashi at yuka.hayashi@wsj.com, Daisuke Wakabayashi at Daisuke.Wakabayashi@wsj.com, Miho Inada at miho.inada@wsj.com and Alison Tudor at alison.tudor@wsj.com