Tokyo City offices
Japan’s system of local self-government is founded on two main principles. First, it provides for the right to establish autonomous local public entities that are, to a certain extent, independent of the national government. Second, it embraces the idea of “citizens’ self-government,” by which residents of these local areas participate in and handle, to varying degrees, activities of the local public entities. Japan’s system of local self-government originates in the pre-World War II period, primarily from the concept of autonomous local entities. [Source: Web-Japan, Ministry of Foreign Affairs, Japan]

“After the war, the concept of citizens’ self-government was incorporated to a greater extent. Japan’s fundamental principles of local self-government are set forth in the Local Autonomy Law (Chiho Jichi Ho), which gives specific legal validity to the principle of local autonomy as insured by chapter VIII of the Constitution of Japan. The Local Autonomy Law specifies the types and organizational framework of local public entities, as well as guidelines for their administration. It also specifies the basic relationships between these local entities and the central government.

“Japan’s fundamental local public entities, namely cities, towns, and villages (“shichoson”), the special wards of Tokyo (“”tokubetsuku”), and prefectures “ (todofuken”) are referred to as local governments. As of Oct 2011, Japan has a total of 786 cities ishi j, 752 towns icho j, and 184 villages ison j, for a total of 1,722 shichoson. With the addition of Tokyo’s 23 special wards this total rises to 1,743. Japan has 47 prefectures: 1 “to “(Tokyo To), 1 “do “1 Hokkaido), 2 “fu “(Osaka Fu and Kyoto Fu), and 43 “ken”.

Tokyo and Osaka are ruled by governors rather than mayors. Governors are elected to four year terms.

As part of the effort to reduce the cost of government, the Koizumi administration cut the number of towns and villages in the early 2000s by incorporating small towns and villages into large ones, assuming that spending would be handled more efficiently by larger towns and cities. To get local mayors and council members to vote themselves out of office they were offered generous buy outs. The merger of villages and towns, known as “Heisei no Daigappei” has dramatically reduced the number of municipalities in Japan from 3,231 to 1,821 as of March 2006. Hundreds of small towns and villages have become parts of big cities.

Central and Local Government Relationship in Japan

Many municipal governments rely on the central government for 70 percent or more of their funding. In turn local governments are expected to pitch in on national projects such as highways, dams, bridges and trains that benefit them.

The Ministry of Internal Affairs and Communications is the central government entity that oversees local government affairs, with such matters being primarily the responsibility of three ministry bureaus. The Local Administration Bureau is concerned with localization, municipality consolidation, local public servant systems, election systems, city-based town planning, and promotion of local IT use. The Local Finance Bureau handles local finance systems, local finance plans, the local allocation tax, local bonds, local financial conditions, and local public enterprises. The Local Tax Bureau is responsible for prefectural taxes, municipal taxes, fixed property taxes, and other local taxes. [Source: Web-Japan, Ministry of Foreign Affairs, Japan]

“After World War II, in accordance with the provisions of the constitution and the Local Autonomy Law, Japan’s local governments gained broad recognition of their autonomy and self-standing, both at the formal level and at the operational level in terms of their actual dealings with the central government. However, although they are considered autonomous entities, as the source of their funding and orientation comes from the central government, it is the central government who exercises control in various ways.

“In April 2000 a package of decentralization-related law revisions was implemented that delegated a wide range of administrative operations from the central government to local governments. As part of the reduction of the system of central government control of local administration, a significant portion of the Local Autonomy Law was also revised. In order to improve the level and efficiency of administrative services at the local level, and thereby help local governments better handle delegated authority and deal with problems such as population aging and the severe fiscal situation, the national government is actively promoting the consolidation of cities, towns, and villages into larger units. In August 2002, the government implemented the Basic Residential Register Network System. This system links the basic residential registers that serve as the basis for local government administrative activities. The goals of the system are to increase administrative efficiency and improve the level of service provided to all citizens.

Local Government Leadership and Structures in Japan

As stated in the Local Autonomy Law, prefectures are administratively headed by governors (“chiji”), while cities, towns, and villages are headed by mayors. These officials represent the local governments in their external dealings and serve in an executive position vis-à-vis the elected local assemblies, the forums for discussion of local issues. Governors and mayors are elected for four-year terms by direct popular vote and are responsible to the local citizenry. [Source: Web-Japan, Ministry of Foreign Affairs, Japan]

“Local assemblies are composed of members elected by local voters. Among the functions of these assemblies are establishing or abolishing local ordinances, determining local government budgets, and approving settlements of accounts. They also check work undertaken by local bodies on their own initiative or when delegated to do so by organs of the central government. Likewise, they request audits by local government audit commissions and have a say in the selection of important local officials (vice governors, deputy mayors, etc.). Their work is carried out largely by standing committees (“jonin iinkai”). As organs for discussion and decision-making, the local assemblies, together with the executive organs centered on the offices of the governors and mayors, are the most important constituents of local government. However, it has been pointed out that the autonomous initiatives and activities of these assemblies tend to be inadequate, as the majority of proposals they consider are in fact initially drafted and presented by the office of the governor or mayor.

“The heads of local governments are directly elected by the citizenry. This stands in contrast to the indirect way in which the prime minister is chosen, namely, through votes cast by members of the Diet. The local assemblies, which are deliberative and decision-making organs, and the local government heads, who are, so to speak, the executive organs, are both chosen by local citizens and have a sort of parallel standing. The establishment of this democratic pattern is meant to contribute to the realization of appropriate self-government through the mutual checks that the assemblies and heads of local governments exercise on one another. People who are employed by local public entities at or below the prefectural level are called local public servants. This term usually refers to persons in ordinary public service posts, excluding such special posts as governor, vice governor, mayor, deputy mayor, chief accounts officers, and so on. Matters having to do with the recruitment, remuneration, and working conditions of local public servants are decided in accordance with regulations that are similar to those affecting national public servants and that are set out in the Local Public Servants Law.

Japan’s Large City System

In response to the special administrative needs of larger cities, the Local Autonomy Law designates for such cities a number of special regulations that differ from those affecting ordinary cities, towns, and villages. By means of government ordinances, large cities can be assigned to a number of special categories, with the largest being the “designated city” (“seirei shitei toshi”), which must have a population of at least 500,000 (almost all are over 1,000,000). As of April 2010, there were 19 such cities (the national capital, Metropolitan Tokyo, is in a category by itself); they are: Sapporo, Sendai, Saitama, Chiba, Yokohama, Kawasaki, Sagamihara, Niigata, Shizuoka, Hamamatsu, Nagoya, Kyoto, Osaka, Sakai, Kobe, Okayama, Hiroshima, Kita Kyushu, and Fukuoka. [Source: Web-Japan, Ministry of Foreign Affairs, Japan]

“In these cities, authority over 18 categories of public activity (welfare, hygiene, urban planning, etc.) ordinarily under the administration of the prefecture and its governor is transferred to the city’s decisionmaking and administrative mechanisms. Additional legal authorizations transfer still other elements of prefectural control and authority to these cities, with the result being that they are treated, for all practical purposes, on a par with the prefectures. Each of these cities is divided into several wards to facilitate the work of city administration, and each geographical subdivision has a ward office that employs a ward head and other public servants. The second largest designation category is that of the “core city” (“chukaku shi”), which must have a population of at least 300,000 and if the population is less than 500,000 the city’s land area must be at least 100 square kilometers.

“Core cities, which numbered 41 as of April 2011, are delegated most of same responsibilities as the designated cities, with the exceptions being functions that are more efficiently handled at the prefecture level. The third largest designation category is that of the “special city” (“tokurei shi”), which must have a population of at least 200,000. Special cities, which numbered 40 as of April 2011, have a degree of sovereignty similar to that of core cities in the areas of environmental preservation and city planning administration. As internal entities of Metropolitan Tokyo, the 23 Tokyo wards (“ku”) were in the past subjected to a variety of restrictions with respect to their administrative and fiscal authority, as compared to cities (“shi”). Reforms implemented in April 2000, however, defined the wards as local public entities on a level similar to that of cities.

Local Public Finance in Japan

Each year the cabinet must put together a document giving the total estimated amount of revenue and expenditures of the local governments for the next fiscal year. This document must be made public and submitted to the Diet. Ordinarily called the local finance plan, it becomes the main guideline for local government financial operations. The scale of local finances peaked at 101.6 trillion yen in fiscal 1999. Since then it has declined annually, falling to 82.5 trillion yen in fiscal 2011. Approximately 60 percent of the country’s total public expenditures are channeled through local governments. Local taxes (“chihozei”), which constitute an autonomous sort of revenue for local governments, are collected by local administrations within the limits of their authority to levy taxes. There are both prefectural taxes and taxes levied by cities, towns, and villages. Both types of taxes are subcategorized into special-purpose taxes, to be used for certain designated ends, and ordinary taxes, whose use is not specifically designated. [Source: Web-Japan, Ministry of Foreign Affairs, Japan]

“A system of local consumption taxes was instituted in 1997 as a means of increasing local government financial resources in order to promote local autonomy. The “trinity reforms” were carried out on the local tax system between fiscal 2004 and 2006. As a result local taxes are gradually rising, and in fiscal 2007 they accounted for 43.3 percent of all local government revenue. The shortfall is made up by other sources, notably local allocation and transfer taxes (“chiho kofuzei “and “chihoujoyozei”; 17.8 percent), national treasury disbursements (“kokko shishutsukin”; 11.2 percent), and local government bonds (“chihosai”; 11.8 percent).

“Local allocation taxes are used by the central government as a means of adjusting local financial administration with a view to ensuring a certain level of administrative equality throughout the country. The monies are allocated as general revenues that local governments can use as they see fit. In particular, the trinity reforms have resulted in local allocation taxes being substantially reduced (by roughly 5.1 trillion yen). On the other hand, roughly 3.0 trillion yen was transferred from the central to local governments by means of reducing income taxes (national taxes) and increasing individual inhabitant taxes (local taxes). Treasury subsidy reform was also carried out, resulting in a reduction of 4.7 trillion yen. The reforms also worked to clarify the respective burdens borne by the central and local governments with relation to contributions for public projects under direct control of the national government, a longstanding demand of local governments. As a result, local governments contributed about 641.5 billion yen to such projects in fiscal 2011.

Local Government, Corruption and Waste

Local autonomy also increased in the early 1990s when prefectural governments were encouraged to spend more money to counterbalance the collapse of the bubble economy. As a result local governments have become powerful and won more control over local projects and corruption involving local officials has increased.

Money is often wasted on unnecessary things, In a 2002 event organized by a local politician, former U.S. President Bill Clinton was paid $400,000 by a local civic group to speak before a youth group in Mito City in Japan. For that money addressed 1,700 high school students, posed for pictures at a reception, attended a banquet and met with college students the next morning.

Misuse of funds is common at the local level. Making fake purchase orders for stationary and desk items is a tactic commonly used because such items are difficult to account for. Local governments are typically allowed to purchase items with a discretionary contract if their purchase is less than $10,000. In Aichi Prefecture, local officials created a $660,000 slush fund using such methods..

See Corruption, Bribery Scandal in 1993

High Salaries in Local Government

The relatively high salary levels of local civil servants has become an issue in assessing government finances. Katsumi Takahashi wrote in the Yomiuri Shimbun: “About 21 trillion yen, or about a quarter of the total 81.9 trillion yen (about $1 trillion) spent by local governments in fiscal 2012, covers salaries. To cover the revenue shortfall of local governments, the central government has distributed 17.5 trillion yen as tax revenue allocations. [Source: Katsumi Takahashi, Yomiuri Shimbun, November 5, 2012]

Salary levels of staff such as drivers and security guards, are higher in local governments than in the private sector. According to the ministry's data, the salary levels of cleaning staff and bus drivers are about 50 percent higher than those in the private sector, while the salary levels of security guards are about 90 percent higher.

Some local governments still continue a practice of paying housing allowances to officials who own homes. According to the ministry, the Kanagawa prefectural government pays 6,300 yen a month on average as a housing allowance to about 27,000 employees. The Fukuoka prefectural government pays 4,500 yen a month in housing allowances to about 21,000 employees, and the Sapporo city government pays 9,700 yen a month to about 4,000 employees.

The ministry said in Aomori, Akita and Ehime prefectures, average monthly salaries of local civil servants and private-sector workers differ by more than 100,000 yen. While such salary gaps remain between the local government sector and the private sector, the central government has increased its allocations to local governments since fiscal 2009. The increase has been attributed to a decline in local tax revenues due to the economic slump following the Lehman Brothers collapse in autumn 2008.

As a result, the central government's long-term debts have ballooned, with the total predicted to reach 739 trillion yen by the end of fiscal 2012. Though the fiscal state of local governments has deteriorated, the total debt of local governments in the past three years has not increased significantly from about 200 trillion yen.

Because local civil servants' salaries are decided by each local government through labor negotiations and other procedures under local ordinances, the central government has no authority in the matter. Therefore, many local governments have been unable to cut salaries among their employees, as opposition is solid. Whether and to what extent the central government will be able to make local governments cut their labor costs will likely become a challenge for the fiscal reconstruction of the nation as a whole.

Prof. Motohiro Sato, an expert in local government finances at Hitotsubashi University, said: "Cutting the salary levels of national civil servants is a time-limited measure for financing post-disaster reconstruction. It's too early to conclude that local salaries are too high simply because the Laspeyres index [a formula used for comparison of central and local government salaries] has risen. But fiscal conditions have continued to be severe for local governments. "Salary levels should be discussed again. Local governments that receive allocations of the central government's tax revenues need to make efforts to minimize spending on employee salaries. But if labor costs are cut uniformly, some job categories will be adversely affected. Residents and local assembly members should also keep an eye on the situation so that spending for labor costs is distributed in line with the value of administrative services.”

A law stipulating that national civil servants' salary levels be lowered by 7.8 percent on average for two years went into effect in April, 2012. A supplementary provision in the law states: "Salaries of local civil servants are voluntarily and properly handled by local governments.” The ministry said the clause is to encourage local governments to follow the example of the central government and voluntarily cut salary levels.

Local Government and Public Works in Japan

In recent years there has been a drive to decentralize power from the central government to local governments and one the biggest steps to making this happen is freeing the local government from the burden of financing extensive public works projects such as dams, expressways and Shinkansen rail lines dreamed up by the central government.

Large government projects, the central government pays two thirds and local governments pay a third. The system was set up under the notion that people who benefit from projects should pay for them. But in many cases the costs of projects outweigh the benefits.

Local governments complain they are “slaves” to the national government and their requests. Sometimes they are required to come up with billion of dollars to fund projects like highways, ports and train lines that were largely hatched without their consent by the national government

The Niigata prefectural government said it may defy a request by the central government to increase its spending on a Shinkansen project by ¥22 billion, arguing it would be too much of strain to come up with the extra money.

Bankrupt Towns in Japan

Yubari is an infamous town that tried to revitalize itself after a coal mine closed in the 1980s by attempting to turn itself into a tourist attraction by building an expensive amusement park, a robot museum and other poorly thought-out tourist attractions with municipal funds. Few tourists came to the town and the result was huge debts and the bankruptcy of the town.

In the 1960s, Yubari was a prosperous mining town with a population of 120,000. By the early 2000s, it was saddled with $500 million in debts, which worked out to about $40,000 for each of the town’s’s 12,828 inhabitants. In 2006, the local government consolidated 11 schools into four, cut back on snow removal, closed libraries and museums, raised taxes, began charging hefty fees for water and sewage and made other changes to pay back the debts.

About half of the town’s 300 municipal workers were laid off and the those that stayed on had salary cuts of 30 percent to 70 percent. The cuts was so thorough and severe that the toilets in Yubari station were closed, forcing those in need to use a hotel next door, and the hospital-turned clinic could no longer offer things like kidney dialysis, forcing people who needed such treatments to go elsewhere or die. Not making matters any better as Yubari looks ot the future is the fact that 40 percent of the town’s residents are over 65 and 8 percent is under 8, making Yubari the most aged town in Japan.

Experts are watching what is happening in Yubari and see it as test of how much or how little Tokyo will help Yubari out and how the precedent would affect other towns in financial trouble. Many blame Tokyo for creating the situation by giving out too much money and soft loans.

Growing Citizen Awareness in Japan

Japan’s local self-government has provisions for direct democracy not seen at the national level. For example, after collecting signatures from 2 percent of registered voters in a given local area, residents may request that heads of government establish, change, or abolish a certain ordinance. Or, with the same percentage of signatures, local residents may demand that a local audit commission perform an audit of work carried out by a local public entity or local elected leader. [Source: Web-Japan, Ministry of Foreign Affairs, Japan]

“By collecting the signatures of one third or more of registered voters, petitions can be made to local election administration commissions to dissolve local assemblies or to dismiss an elected leader or local official. In addition to these types of direct petition, local residents are guaranteed by the constitution (article 95) the right to vote directly on special laws applicable only to one local public entity. As a result of changes in the political environment and local political awareness, a growing number of local governments are establishing voting ordinances allowing residents to vote yes or no on important local issues.

“This trend is not based on the Local Autonomy Law but on the constitutional right to establish local ordinances. At present, local ordinances have been established in this way with respect to such issues as the building of nuclear power stations, plans to fill in seaside marsh areas, the continued presence of U.S. military bases, and the building of waste disposal facilities. Reflecting the need to respond to resident complaints about local government, systems have been established for employing a local ombudsman charged with investigating aspects of local administration, with the first such system being created in 1990 in the city of Kawasaki in Kanagawa Prefecture. The ombudsman has the necessary powers of investigation to resolve complaints, and in cases where it is judged that the reasons for complaints are grounded in systemic defects or administrative shortcomings, the ombudsman will make his or her views public and advise the local administrative leader to correct the problems.

Image Sources: 1) 2) 3) 4) 5) Wikipedia, 6), 7) Shugin House of Representatives site , 8) Japan Zone, 9) Ray Kinnane, local government, Aomori Prefecture . Tokyo offices, Japan-Photo.de

Text Sources: New York Times, Washington Post, Los Angeles Times, Daily Yomiuri, Times of London, Japan National Tourist Organization (JNTO), National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.

Last updated January 2013

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