Japan’s Stagnating Attempts at Regional Government Reform

After starting in a flurry of ambitious activity, Prime Minister Noda Yoshihiko’s attempts to shake up the regional branches of central government have stalled.

Branch offices (desaki kikan in Japanese) are the huge subsidiary arms of central government ministries that exist in all of Japan’s regions. Trimming these behemoths down and making them more efficient by transferring their functions to local governments is a vital issue for decentralization and administrative reform. But the draft proposal currently before the Diet imposes a number of unrealistic conditions that must be fulfilled before control of the branch offices is transferred to the regions, and all but ensures the continued existence of the vested interests of the central government.

Of roughly 300,000 government employees, around 190,000 are assigned to regional branch offices, many of them to organs such as the Tōhoku Regional Development Bureau run under the Ministry of Land, Infrastructure, Transport, and Tourism (MLIT), and the regional agricultural offices of the Ministry of Agriculture, Forestry, and Fisheries. The “Hello Work” employment agencies run by the Ministry of Health, Labor, and Welfare, are another example. It is likely that a lot of the work done by the regional branch offices could be handed over to local government; indeed, as many have pointed out, there is already a good deal of overlap between the two. In this sense, reforming the regional branch offices would kill two birds with one stone and have a dramatic effect in terms of decentralization and administrative reform. It would also be a vital step in terms of trimming the government payroll.

However, within the central government there has been stiff and vociferous opposition to these proposals. This is not surprising, since any such reforms would be akin to central government clipping its own wings. Under the Liberal Democratic Party–Kōmeitō governments of Fukuda Yasuo and Asō Tarō, a committee on decentralization suggested a target of 35,000 job cuts. Work started on reforms, but was soon put into cold storage following strong resistance from the ministries.

The Barrier to Further Reforms

The Democratic Party of Japan government was slow to address the problem after coming to power, until demands from two conglomerations of regional government demanded a change in the law as a matter of priority. The Union of Kansai Governments, centered on the Kinki area around Kobe, Kyoto, and Osaka, and the Governors’ Association of the Kyūshū Region, demanded a handover to local government of powers currently administered by three government ministries: MLIT, the Ministry of Economy, Trade, and Industry, and the Ministry of the Environment. For a time, the government worked toward achieving devolution in these two regions. Although he is widely believed to be noncommittal on the subject of decentralization, Prime Minister Noda Yoshihiko announced that he would submit a draft bill during the present session of the Diet, and preparations within the government were proceeding, centered on the Cabinet Office.

It now looks increasingly likely that the final legislation will fall substantially short of what was originally envisaged. One problem lies with the unnecessarily high hurdles the proposal puts in the way of delegating responsibility to the regions. The draft proposes that powers should be handed over to a regional union of local prefectural governments. It also requires that the areas under the authority of the government’s branch offices need to be brought together first before any progress toward decentralization can be made.

In the case of Kinki, for example, this means that reforms cannot go ahead without a Union of Kansai Governments that brings together all the prefectures under the supervision of the Kinki Regional Development Bureau. And since Nara Prefecture refuses to join the Union of Kansai Governments, it has proved impossible to fulfill the preliminary requirements necessary to go ahead with reforms. This situation allows the government to push the blame for the lack of progress back onto the regions, claiming that nothing can be done because of Nara’s refusal to get involved.

There are similar issues in Kyūshū, where there is no schedule in place for a regional union incorporating all the local prefectural governments. As a result, the prospects for decentralization are fading fast.

On top of this, an innate sense of cautiousness has led the MLIT to demand that ultimate supervisory control should remain with the ministry even after responsibility has been handed over to the regions. It is an unyielding and belligerent attitude.

The DPJ has struggled repeatedly with decentralization issues since it came to power—issues such as subsidies reforms, and revisions of the “obligations and evaluations” by which the national government imposed various standards on the regions. But changing the way the regional branch offices are run is an even more difficult challenge than any of these. This kind of reform stands little chance of success without considerable input from the prime minister’s office, but there has been little evidence of strong political leadership so far.

To make matters worse, some DPJ Diet members who have become voices for vested interests, and local municipalities compromised by their reliance on central government handouts of strings-attached subsidies, have banded together to oppose the reforms. Opposition to reform is every bit as stubborn and determined as it was when the LDP was in power. Meanwhile, the prime minister’s decision to appoint former MLIT administrative vice-minister Taketoshi Makoto as his deputy chief cabinet secretary strengthened the view of many in Kasumigaseki that the government’s efforts to reform the regional branch offices are doomed to lose momentum.

Setting aside for now the question of whether the Noda administration is fundamentally under the thumb of the bureaucrats, there is no doubt that the central ministries seem to have got the measure of the cabinet and that efforts to push through reforms have stalled.