Subcommittee on Local Autonomy (Second Meeting)

Thursday, March 28, 2002

Meeting Agenda

Matters concerning local autonomy

After a statement was heard from Prof. MORITA Akira concerning the above matters, questions were put to him; this was followed by discussion among the members.

Informant

  • MORITA Akira, Professor, Graduate School of Law and Politics, University of Tokyo

Members who put questions to Prof. MORITA


Main points of Prof. MORITA's statement

1. Introduction

>> Decentralization reforms are part of the reorganization of the system of government in response to the fact that a number of social institutions are no longer attuned to reality. Various reforms of this type are presently being carried out in many other nations of the world.

2. Decentralization reforms: Present status and future issues

(a) Progress to date
>> In Japan, results have been achieved to a certain extent by the Comprehensive Decentralization Law; for example, "functions delegated by government" have been abolished. However, fiscal decentralization reforms have been inadequate, due in part to the deteriorating state of public finances.

(b) Fiscal crisis and issues of decentralization reform
>> At present, the ratio of tax revenues between the central and local governments is 6:4, but their expenditures are in the reverse ratio, 4:6. Also, in many localities there is an imbalance between the tax burden on residents and the benefits they receive. To resolve this situation, subsidies should be consolidated and rationalized, and sources of tax revenue should be transferred to the local governments.

>> The first items for study on the agenda of the Council for Decentralization Reform are reviewing the excessively large number of duties performed by the central government, together with improving the institutional environment.

3. Municipal mergers

(a) The need for mergers, and the types of merger
>> Recently, there is a growing debate over municipal mergers. The reasons for this increased interest include: (i) the need for a minimum administrative and fiscal capacity in order to maintain administrative services; (ii) the approach of the March 31, 2005 deadline set by the Special Law on Mergers of Municipal Authorities for preferential fiscal treatment accompanying mergers; (iii) the fact that residents' daily lives and activities today extend over a wide geographical area; (iv) the need to address population decline, the aging of society, and the hollowing-out of industry. But mergers are not a panacea, and responses tailored to local conditions are needed.

>> There are four types of merger: (i) the "designation-seeking" type, in which two cities, each with a population of several hundred thousand, merge with the aim of becoming a "Cabinet-order designated city" (population 500,000 or more), or for similar reasons; (ii) the "metropolitan periphery" type, which merges municipalities with small areas and large populations on the periphery of a large city; (iii) the "regional city expansion" type, in which a regional city of a certain size merges with surrounding towns and villages to become a large city; (iv) the "small municipality integration" type, in which small towns and villages in hilly and mountainous areas, where fiscal conditions are severe, merge to strengthen their administrative and fiscal capacity. Mergers of type (iv) are expected to face particularly serious problems in future.

(b) Issues and responses
>> Municipal mergers should be approached with a clear vision of the qualities desired in local communities in the twenty-first century. The government's current policies tend to promote uniform mergers, to overemphasize preferential fiscal treatment, and to attach too much significance to numbers like the goal of 1,000 local bodies nationwide. These tendencies should be avoided; what is needed is a response fine-tuned to particular local conditions.

>> Critics of the current merger promotion policies argue that: (i) the promotion of mergers by the central government runs counter to the principle of local autonomy; (ii) mergers destroy local communities; and (iii) it is better for a number of municipalities to form a regional federation, instead of merging to create a single local authority that covers too large an area. My views on these points are: (i) it is necessary for the central government or the prefectural governments to coordinate mergers, as this is an issue that involves all municipalities from the viewpoint of maintaining administrative services; (ii) while it is important to maintain communities, it is also important to maintain administrative services to residents, and we need to find a form of local government that strikes a balance between these two interests; and (iii) as federations are more effective than mergers in only a limited number of cases, this is no reason to reject all mergers.

(c) The ideal form of municipalities and prefectures after municipal mergers
>> As municipal mergers proceed, in those prefectures that have many large cities the prefectural governments will transfer their powers to them, thus reducing their own role; conversely, in prefectures that have many small municipalities, the prefectural governments are likely to take on an increasing burden and role. Thus, the ideal form of the prefectures should also be studied very carefully.

Main points of questions and comments to Prof. MORITA

ITO Kosuke (Liberal Democratic Party)

>> The central government has recently been actively promoting municipal mergers. In my view, however, it is difficult to promote mergers without first resolving the problem that most local bodies are not financially independent, as they have few fiscal resources of their own. What is your view in this regard?

>> The Tokyo Metropolitan Government introduced a "bank tax" (levied on gross profits adjusted for such "external standards" as the number of employees, capital, and other measures of the scale of operations), but a court has just ruled that it violates the Local Tax Law. However, I think that efforts by local bodies like the Tokyo Metropolitan Government to levy taxes independently are important from the standpoint of securing fiscal resources of their own. What are your views in this regard?


NAKAGAWA Masaharu (Democratic Party of Japan and Club of Independents)

>> I believe that the lack of progress in transferring fiscal resources to local governments is due to the lack of a detailed vision, and that such a vision should be put forward. Do you agree with this?

>> To what extent should the central government formulate laws and standards concerning local autonomy?

>> In promoting municipal mergers, I think it is important to present a model to allay the concerns of local bodies. Do you agree?

>> When promoting municipal mergers, I think it is important to respect communities and ensure opportunities for resident participation, in keeping with the spirit of self-government by residents. What are your views in this regard?


EDA Yasuyuki (New Komeito)

>> Mergers should be coordinated by the central or prefectural governments to ensure that local bodies that want to take part are not left out because of their small size or poor financial condition. Concretely, what method would you recommend for this purpose?

>> Unlike municipal mergers in urban areas, mergers in hilly and mountainous areas seem to face many difficulties. What measures are available to promote them?


FUJISHIMA Masayuki (Liberal Party)

>> What are your views regarding the "principle of local autonomy" referred to in Article 92 of the Constitution?

>> I believe that we should expand municipalities through mergers until they number about 300 nationwide, while transferring fiscal resources to local governments, so that the public works that are presently subsidized by the central government can be financed locally. What are your views in this regard?

>> You noted that the incentives for mergers are not very effective in hilly and mountainous areas. What steps can be taken to promote mergers in such areas?

>> How do you evaluate the results of the abolition of functions delegated by the government under the Comprehensive Decentralization Law?


HARUNA Naoaki (Japanese Communist Party)

>> What do you think is the significance of the fact that the Constitution of the Empire of Japan contained no provisions on local autonomy, but the Constitution of Japan has a full chapter on local self-government?

>> One of the principles of local autonomy is "self-government by residents," and I believe that this spirit is important today. But is there not a risk that, as municipalities merge and expand, residents will have fewer opportunities to participate in politics and the significance of "self-government by residents" will be diminished?

>> As I understand it, in 1994 the 24th Local Government System Research Council took a negative position on municipal mergers as a means of decentralization. Having participated in the Committee for the Promotion of Decentralization as a counselor, could you explain how the government came to adopt its present position in favor of municipal mergers?


YOKOMITSU Katsuhiko (Social Democratic Party)

>> The heads of local governments that are in difficult financial straits have criticized the proposed overhaul of the "stratified supplement system," which grants large amounts of Local Allocation Tax to small local bodies. How do you view their criticisms?

>> In a democracy, I see no need for every municipality to think the same way; for example, the town assembly of Yamatsuri-machi in Fukushima Prefecture voted against a merger, and a large majority of residents then upheld that decision in a referendum. What are your views in this regard?


WATANABE Hiromichi (Liberal Democratic Party)

>> What do you think is the right size for a local government?

>> The current system, which makes uniform provisions for all municipalities, seems impractical to me; what is your view of this? Also, how do you think roles should be divided between the municipalities and the prefectures?


NAKAMURA Tetsuji (Democratic Party of Japan and Club of Independents)

>> The fact that a designated city has powers similar to those of a prefecture seems to me to pose problems for the prefectures and neighboring municipalities. What is your view of this?

>> You stated that a case can be made for giving designated cities independence from their prefectures, but would that not run a risk of abandoning regional governments. In my view, to achieve administration that is responsive to regional needs also, a new level of local authority should be established, ranking above the basic unit and extending over a wide region, and personnel exchanges should be arranged among the basic units of local government. What are your views in this regard?


MORIOKA Masahiro (Liberal Democratic Party)

>> The current policy on municipal mergers is being carried out within the framework of the prefectures, but I think that mergers across prefectural boundaries could also be allowed. What is your view in this regard?

>> Do you think that a municipal merger offers any advantages for a municipality like Asuka Village, which has a strong identity despite its small size?

>> Some countries, such as Germany, have detailed provisions on local autonomy in their constitutions, while others, such as France, make provision only briefly. Do you think that the Japanese Constitution should make provision in detail, or should do so briefly and leave this area to legislative policy?

>> Article 93, paragraph 2 of the Constitution provides for public election of the chief executive officers of local public entities. What do you think of introducing an American-style system of city managers (i.e., nonelective chief executive officers)?

Main points of comments by members of the Subcommittee (in order of presentation)

ITO Kosuke (Liberal Democratic Party)

>> With regard to the form of the prefectural system, various groups and experts have proposed a "do-shu" system, which would integrate the prefectures into a small number of states or provinces. In discussing decentralization, we should give positive consideration to the introduction of a "do-shu" system.


NAKAMURA Tetsuji (Democratic Party of Japan and Club of Independents)

>> There are concerns that, as decentralization is promoted, friction will develop between local governments in major urban areas, which have dense populations, large size, and high administrative and fiscal capacity, and those in other areas. Partly to ease these frictions, we should establish local bodies extending over a wide region and responsible for overall coordination (regional-level republicanism), and we should also encourage personnel exchanges among local governments.


HARUNA Naoaki (Japanese Communist Party)

>> I cannot agree with the "do-shu" system, as it is not clear to me on what principles it is based. The deterioration of local public finances is cited as a reason for the current series of municipal mergers, but local public finances deteriorated due to the economic policies of the central government, which pressed local governments to carry out public works without adequate fiscal backing in order to stimulate the economy. This is a problematic rationale for promoting municipal mergers.


NAKAGAWA Masaharu (Democratic Party of Japan and Club of Independents)

>> It is controversial that the Diet has left decentralization to be discussed by such bodies as the Committee for the Promotion of Decentralization and has not made the necessary political decisions itself. In future, the Diet should actively make political decisions on such issues as the proper division of duties between the central and local governments and the transfer of taxes and fiscal resources to local governments.


NAGAI Eiji (Democratic Party of Japan and Club of Independents)

>> From my experience of many years' involvement in local politics, I think that it is definitely necessary to introduce the "do-shu" system in order to dismantle the structure of centralized power and bureaucratic control and establish decentralization in its ultimate form.


HIRAI Takuya (Liberal Democratic Party)

>> The development of "electronic government" and related IT networks that the government is promoting will make greater administrative efficiency possible and usher in a new phase of administration, beyond mere computerization of procedures. In future, should we not study what form decentralization should take in keeping with advances in information technology?


YOKOMITSU Katsuhiko (Social Democratic Party)

>> Citizens and civic groups who take independent action, such as volunteers and nonprofit organizations, also have an important role to play in local autonomy. In promoting decentralization, our field of view should include not just local governments standing alone, but local governments working together with these citizens and civic groups.