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The Need for Administrative And Financial Reform in Japanese Local Governments 1 Hiroshi Inayama Director general for secretariat’s policy matters Minister’s secretariat, Ministry of Internal Affairs and Communications, Japan September 2015 20150807ver 1

Lecture 1 Japan

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Page 1: Lecture 1 Japan

The Need for Administrative And Financial Reform in Japanese Local Governments

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Hiroshi InayamaDirector general for secretariat’s policy matters

Minister’s secretariat, Ministry of Internal Affairs and Communications, Japan

September 2015

20150807ver1

Page 2: Lecture 1 Japan

Contents

1 Outline of local autonomy systems in Japan2 Outline of administrative and financial reform in

Japanese local governments

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1 Outline of local autonomy systems in Japan

1-(1) Characteristics of local autonomy systems in Japan     Fundamental information about Japanese local autonomy systems     Composition of local governments     Local government institutions     Relationships between leaders and assemblies     Division of administrative work between the national and local

governments

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Fundamental information about Japanese local autonomy systems

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In Japan, local autonomy is guaranteed by the constitution. The national and local governments have different legal personalities, and the Local Autonomy Act prescribes local autonomy structures and the relationships between the national and local governments.

Local governments have assemblies composed of members chosen via public elections (direct elections by the citizens).These assemblies possess legislative power (the right to establish regulations)—within the range of law—including budget decisions.

Administration is performed by publicly elected leaders (prefectural governors and heads of municipalities).

* National government administration is performed by the Cabinet. The national government has a parliamentary system.

The Japanese local government system has two levels: prefectures and municipalities.

* Japan is a unitary state; it does not have a federal system.* There are 47 prefectures and 1,718 municipalities (as of April 1, 2015).

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Composition of local governments①

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Japan

Republic of Indonesia

Largest

SmallestTotal area: 377,972.28 km2

   Largest: Hokkaido   83,424.22 km2

   Smallest: Kagawa Prefecture 1,876.73 km2

(October 1, 2014)

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Composition of local governments (2)

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Type Number Population (largest – smallest) (Unit: person)

Prefecture (to, do, fu, ken)

47 To(1)

13,159,388 (Tokyo)

Do, fu, ken(46)

9,048,331  – 588,667(Kanagawa Prefecture) (Tottori Prefecture)

Municipality (city, town, village)

1,718 City(790)*Among which are designated cities  (20)

3,688,773  – 4,387 (Yokohama City)   (Utashinai City)                 (Hokkaido)

Town(745)

50,442  – 1,246  (Fuchu Town)    (Hayakawa Town)   (Hiroshima Prefecture)        (Yamanashi Prefecture)

Village(183)

38,200     –  201 (Yomitan Village)       (Aogashima Village)          (Okinawa Prefecture)         (Tokyo)

Special wards(in Tokyo)

23 877,138   –   47,115

(Setagaya City)     (Chiyoda City)(Note) Local government numbers and itemizations are current as of April 1, 2015

Populations are from the 2010 Population Census (definite values)

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Local government institutions Assembly: decision-making body

Number of assembly members      Determined by regulations (When the Local Autonomy Act was revised in

2011, the upper limits by population scale were

abolished) Assembly member term of office     Four years Assembly member eligibility for election   Residents age 25 and older Right to vote for assembly members    Residents age 20 and older* Jurisdiction        Establishing, revising, and abolishing regulations; determining budgets; authorizing account settlement; votes of censure against leaders; etc. Holding assemblies     Regular meetings (many local governments hold four per year) and special meetings

Leader: executive body Term of office     Four years Eligibility for election   Age 30 and older for prefectural governors, age 25 and older for

heads of municipalities Right to vote    Residents age 20 and older* Jurisdiction    Establishing regulations, submitting legislative bills, enacting budgets, etc.

* Will be lowered to 18 years old after the first national election after June 19, 2016

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Relationships between leaders and assemblies

(dual representative system)

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(Executive body) (Decision-making body)Right to submit legislative bills

If the views of the head and

assembly are in conflict

• The head making a decision on his/her own• Reconsideration• Lack of confidence/dissolution

Coordination methods

Right of inspection

HeadAssembly

[Directly elected by citizens] [Directly elected by citizens]

Resolutions

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Public investment

Education Welfare Other Industry and economy

National government

○Expressways○National highways (designated sections)○First-class Rivers

○Universities  (national university corporations)

○Pensions ○Defense○Diplomacy

○Currency○Trade○Energy

Local governments Pref

ectures

○National highways (other)○Prefectural roads

○High schools○Managing elementary and junior high school staff members

○Health care centers ○Policing ○Urban planning, etc.  (zone designation)

Municipalities

○Municipal roads○Sewage

○Elementary and junior high schools○Kindergartens and preschools

○National health insurance○Waterworks○Garbage processing○Care and welfare

○Firefighting○Resident registration

○Urban planning, etc.  (determining plans)

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Division of administrative work between the national and local governments (illustrated by example)

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1 Outline of local autonomy systems in Japan

1-(2) Background to the establishment of local autonomy systems     History of prefectures     Changing number of municipalities due to municipal

mergers    

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305 75

47

1871(Meiji4)Jul. 1871(Meiji4)Dec.

1888(Meiji21)

History of prefectures (1)

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History of prefectures (2)Prefectures:  Prefectures are in charge of wide-area administrative work, contact regarding municipalities, etc. In Japan, all of the municipalities and special wards are included in one of the 47 prefectures.

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■   There have been few changes to the number and boundaries of prefectures for more than 120 years since the Meiji Period      

They are established among the people as regions with fairly high degrees of penetration

* There are always discussions about administrative reform that integrates today’s prefectures, but this has not been carried out because of the high degrees of penetration

* Administrative reform through integration○ Establishing do and shu as local governments instead of prefectures ○Administrative work performed by today’s prefectures would be substantially transferred to municipalities. Administrative work performed by the national government would be transferred to do and shu as much as possible.

1871 (Meiji 4)・ Fu and ken were established for the wide-area control of feudal domains in the Edo Period (three fu, 302 ken)・ Governors were established in the fu and ken・ Fu and ken were merged(three fu, 72 ken)

1886 (Meiji 19)・ Governors were under the supervision of the Home Minister

1888 (Meiji 21)・ Today’s prefectural boundaries and names were mostly determined (one do, three fu, 43 ken)

1890・ Prefectures were stipulated to be local governments, not national government administrative organs

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There were more than 16,000 municipalities in Meiji 21 (1888), when the modern municipality structure was established. After the great mergers during the Showa and Heisei Periods, today this number has been reduced to 1,718 municipalities.

Great Merger of the Meiji Era

Great Merger of the Showa Era

City Town Village Total

1888 - 71,3141889 39 15,859

October 1945 205 1,797 8,518 10,520

October 1953 286 1,966 7,616 9,868April 1956 495 1,870 2,303 4,668J une 1961 556 1,935 981 3,472

April 1965 560 2,005 827 3,392

April 1985 651 2,001 601 3,253

April 1999 671 1,990 568 3,229March 2006 777 846 198 1,821March 2010 786 757 184 1,727

April 2014 790 745 183 1,718

      Month/Year

(71,314)(15,820)

Great Merger of the Heisei Era

○ For the administrative processing of elementary schools and family registers, across Japan municipalities were merged all at once based on the standard of 300 to 500 households

* From the natural village level to organizations that are governmental bodies

○ Municipalities were merged, based on the standard of populations of 8,000 people, to efficiently establish and manage one junior high school

○ Voluntary mergers of municipalities took place for the purpose of administrative and financial reform, and to ensure fundamental administration and management functions, amidst the decentralization of power, etc.

※ 平成 26 年 4 月 5 日時点。

Changing number of municipalities due to municipal mergers

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2 Outline of administrative and financial reform in Japanese local governments

2-(1) Fundamental decentralization of power concept

     Local administration around World War II

     Background of administrative and financial reform

     Administrative and financial reform and decentralization of power since the 1990s

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Meiji – early Showa (Constitution of the Empire of Japan)

Mayors

Ministries and government offices

Prefectural assemblies

Administrative organs

Prefectural governors

Boards of E

ducation

Prefectural police

Prefectural citizens

Municipal assemblies

Administrative organs

Municipal heads

Boards of E

ducation

Municipal citizens

Local branch offices

Late Showa – today (Constitution of Japan)

Delegated functions imposed upon local governments

 ・ National government administrative work and local governments were controlled and supervised as national government organs・ This was abolished in 2001, making everything local government administrative work

Prefectural assemblies

Citizens

行政機関

Home Ministry

Prefectural governors

(Integrating the internal affairs field)

Appointment = government appointmentPrefectures = composite bodies of national administration and public organizations

        Relationships Assembly → Head: Vote of censure Head → Assembly: Dissolution

Direct public elections (men age 25 and older)

Collegialboard

Assistant officials

City councils

Citizens

Appointments/approval

Recommendation/election

Municipal heads

Assistant officials

Municipal assemblies

Citizens

Direct public elections (men age 25 and older)

Direct public elections (men age 25 and older)

Direct public elections (men and women age 20 and older)

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Local administration around World War II

Direct public elections (men and women age 20 and older)

Recommendation/election

Direct public elections (men and women age 20 and older)

Direct public elections (men and women age 20 and older)

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(1) Motivated by postwar recovery (1945 – early 1950s)・ Restoring territory/society that had been damaged by the war ・ Constructing a legal framework for democratic local governments

Background of administrative and financial reform

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(2) Rapid economic growth and creating a “big government” (1950s – 1960s) ・ Ending the period of postwar recovery・ “ Big government” through the enhancement of public works and social welfare services

(3) Administrative organization reorganization and deregulation due to the oil crisis (1970s – 1980s)

・ From the era of high growth to low growth・ Switching from quantity to quality (social interest in environmental issues and QOL)・ Privatizing and reducing administrative work

(4) Government financial crisis and reconsidering administrative organizations (from the 1990s)

・ Local administration and social welfare services as targets for expenditure cuts・ Decentralization of power, the necessity of more effective administration and management

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Administrative and financial reform and decentralization of power since the 1990s (1)

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○ First Phase of Decentralization Reform Outline of the Comprehensive Decentralization Act (passed in July 1999, executed in April 2000; comprehensive revision of 475 laws)

Restructuring of administrative work and abolition of the system for delegated functions imposed on local governments (a structure in which the head, positioned as a national government organ, is made to do national government administrative work)

Creating new rules for the national government to participate in local governments (enshrining national government participation into law, etc.)

Delegation of authority (national government → prefectures, prefectures → municipalities) (Examples) Authorization authority for the conversion of agricultural land (two to four hectares)

from the national government to prefectures City planning decision rights from prefectures to municipalities

○ Second Phase of Decentralization Reform Deregulation for local regions (reconsidering obligation and frameworks) Transferring administrative work and authority from the national government to local

governments, etc. Transferring administrative work and authority from prefectures to municipalities, etc. Enshrining discussions between the national and local governments into law

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Administrative and financial reform and decentralization of power since the 1990s (2)

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○ Decentralization reform in a new stage   Reform that stresses the importance of local ideas and diversity

Inviting proposals on authority transfer and deregulation for local regions Introducing the “raise your hand” format for transferring authority Detailed discussions utilizing the Advisory Council on Decentralization

Reform (an expert committee)

  Enhancing information transmission by creating collections of excellent cases, utilizing social media, holding national symposiums, etc.

Creating a driving power for reform by having citizens experience the results of decentralization reform

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○ Decentralization of power and administrative and financial reform

Clarifying the roles that should be played by the national and local governments through the decentralization of power

   : Changing the relationship between the national and local governments from a hierarchal, master and servant relationship to an equal, cooperative relationship

Local governments perform administrative work according to their own responsibility and judgment

The necessity of insuring administrative transparency and administrative management with accountability

Towards local administrative and financial reform        ・ Municipal mergers        ・ Drastic revision of personnel expenses, etc.        ・ Reconsidering related corporations, etc.

Administrative and financial reform and decentralization of power since the 1990s (3)

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2   Outline of administrative and financial reform in Japanese local

governments2-(2) Administrative and financial reform in local governments

    Major administrative and financial reform methods

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Major administrative and financial reform methods (1)

Firstly...

Stringency of financial affairs ・ Increased expenses related to social welfare ・ Necessity of keeping down allocation tax(deficit-covering

government bonds, extraordinary expenses for financial affairs countermeasures)

Enhanced activities by the private sector, NPOs, etc.  → Local government work being performed by external

parties

Reconsidering the inefficient nature of administrative organizations

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Major administrative and financial reform methods (2)

Making organizations more efficient: This method is presupposed on people working at the same local government until the retirement age

In many cases, personnel reduction and organizational arrangement is performed by narrowing the quota for replacing retired persons

  * In Japan, the thinking of the past was to use jobs at administrative bodies for employment policy

Lowering pay levels ・ Systems are determined by each local government   

   * However, the standard is the pay levels for private corporations and government officials

   ・ Exceptional methods also exist because of financial reasons 22

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Major administrative and financial reform methods (3)

Making work more efficient: What will improve services to residents, corporations, and groups?

Rapidity : Shortening standard processing times   (Offering one-stop services, revising inspection

processes)    → (Example) Paying taxes at convenience stores

Ensuring and improving quality  : This depends in many ways on accumulating human

wisdom, such as FAQs

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Major administrative and financial reform methods (4)

Sustainability of administrative resources

Drastic review of annual expenditures

Durability of administrative buildings

Bond issuance management: Equalizing bond issuance balances and reducing interest burden ratios through conversion, etc.

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Major administrative and financial reform methods (5)

Reconsidering businesses/utilizing the private sector  →  Reducing and abolishing businesses, outsourcing

  (1)   Introducing private-sector business schemes (publicly built, privately operated)   ・  PFI   ・  Designated manager system

  (2)   Introducing the vitality of private business operators into operations by local governments (consignment to the private sector)

   ・  Water and sewage services   ・  Garbage collection

  (3) Outsourcing the administrative organizations that conduct businesses   ・  Local incorporated administrative agencies

  (4)   Abolishing businesses due to the improvement of services by private-sector business operators

   ・  Abolishing public corporations for housing, land, and roads

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