Japanese bureaucrats outraged by
cuts in local government subsidies
By Andrew Stevens, Political Editor

12 September 2004: Cuts in subsidies to local councils by the Japanese government of Junichiro Koizumi (Liberal Democrat Party) will be a significant test for the new Ministry of Internal Affairs and Communications following a reorganisation of the government department. A proposed cut in central government subsidies, agreed by the Cabinet in June 2004, has provoked a political outcry among the nation’s bureaucrats and lawmakers in the Japanese legislature (the Diet).

The cuts come at a time of profound shifts in the culture of the Japanese state, previously buttressed by a sound economy but increasingly the target of initiatives designed to reduce the dependency culture of the state. Local government is certainly no exception to this culture shift and the reforms, badged as ‘decentralisation’, have been swiftly enacted against the usual consensus that dictates the requirement of agreement on the part of all parties concerned in any new policies.

Japan’s local authorities are represented by a plethora of bodies, such as the Association of City Mayors and the National Governors Association. In response to the Cabinet’s decision to seek subsidy cuts as part of both the decentralisation process and the wider restructuring of the government finances, a coalition of the representative bodies for local government has proposed a reduction in the powers of central government to make subsidies to local government, in effect reducing the central bureaucracy’s influence over local government and increasing decentralisation and the reliance on locally-raised finances.

The move has angered many, both within the government machine and those in the Diet with sectional links to the bureaucrats. Indeed, the factions that make up Japan’s political parties are often reflective of tribal loyalties to certain professional fields within the private and public sectors. The subsidy cuts, while ensuring a greater degree of reliance on locally-raised funds and decreasing central bureaucracies’ scope to directly intervene in certain policy areas, mainly education, has sparked a ministerial turf war ahead of a predicted reshuffle this autumn. Not surprisingly, bureaucrats in the country’s Education ministry are at odds with their colleagues in the new Ministry of Internal Affairs, who have the responsibility for driving the decentralisation process.

The economic realities faced by Japan, not to mention a changing and challenging environment for local governments internationally, is forcing a settled political system to confront traditional ways of working and introduce new concepts that might prove alien to some. The two-tier system of prefectures and municipalities is under threat from centrally-imposed demands for local councils to merge and the nation’s 47 prefectures look likely to be banded together in 11 distinct regional groups. In addition, the government would like local councils to consider the introduction of a US-style Mayor and City Manager system that would see Mayors take on a more policy-related role and allow professionals, envisaged as being drawn from the private sector, to take on operational roles that allow for scope in improving performance and driving efficiency. Such radical thinking might prove unsettling for a political system accustomed to slow change and consensus-driven reform.