Reforms designed to revive Japan are jostling for place, with reforms across a wide range of fields being announced by a number of government organs, such as the Council on Economic and Fiscal Policy and the Council for Regulatory Reform. These reforms have been criticised as being reforms 'in name only'. However the counter proposals of those who criticise the government are a continuation of previous fiscal and financial policy and of doubtful effectiveness. In other words, these former policies emphasised big business [C1]and even if they were put into practice it is extremely unlikely that Japan's present economic recession would be resolved. It is common knowledge that Japan's current economic recession is due to the global progression towards capitalism, the rapid economic development of developing nations and the incomplete reform of Japan's socialist economic system. In other words, it is due to massive state-like enterprises, corporations with special status, licensed corporations, the third sector and public-service corporations and educational foundations in receipt of tax-exempt benefits. If the areas of activity of these kinds of enterprises were handed over to private enterprise it is not exaggerating to say that Japan's GDP would be doubled. The slogan 'privatise whatever can be privatised' is apparently hollow, however if it is set up theoretically and realistically and properly practiced, it is a proposition that hits the nail on the head. At present government reforms are proceeding swiftly and accurately and I consider that the economic benefits are appearing, step by step. However, it is even more important that local government acts as a context in which government reforms take place, undertaking proactive and independent local government reform and policy formulation. On 14 June 1991, the Committee for the Promotion of Decentralisation in Japan presented its findings, Final Report: The Journey Towards Creating a Decentralised Society to the Prime Minister and Cabinet, bringing to an end six years of effort. The Committee had produced an Interim Report in March 1996, five Recommendations and two Opinions. The Committee's work resulted in the enactment on 1 April 2000 of the Law Concerning the Decentralisation of Government Authority, *1 a reform package of 475 related laws. The effect of the decentralisation reforms is well known, however I feel that the laws should, in addition to creating a decentralised society, perform a role in economic recovery and in reviving Japan.

Local government, the fundamental local public body, is the base and centre of all people and all enterprises. All people are residents within a local government. Even the global car manufacturer Toyota has its headquarters located in Toyota City in Aichi Prefecture and without the labour of the local citizens and support of the city, company activities would not run smoothly. Toyota the company has its base in Toyota the city. In other words current national issues such as the economic recession, employment instability, education, welfare, childcare and so on cannot be resolved with broad-brush national level policies alone. First and foremost, local government, which is the point of origin for people and business, must take up these issues as its own and have the mettle and sense of responsibility to see them as issues that must be resolved locally, without seeking assistance from the central government. Japan's economic recovery and revival will be realised through local government securing the requisite legal reforms, budgets, sources of tax revenue and human resources and successfully battling to resolve these issues.

The coming into effect of the Decentralisation Law saw local government receive broad devolution of powers relating to 1. social security 2. education and culture 3. public works 4. industry promotion and 5. public order, fire prevention and so on. There are shades of variation in powers between the prefectural and municipal levels, but if local government does not rise to take up the challenge of fulfilling its new responsibilities on behalf of its citizens, decentralisation will fail. Admittedly, there are many half-measures in this round of legal reforms and almost no assignment of sources of tax revenue. However, unless local government stands up to be counted, no progress will be made in resolving these problems. Here again the fundamental principle of taking local responsibility applies.

The following four conditions must be in place before local government can fulfil the powers and duties given it. Firstly, the rights of local government are set out in the Constitution, but the development of individual policies requires further basic statutory foundations. In order to achieve devolution of power to local government it is obvious that the background measure of setting local government finances on a firm footing and the assignment of sources of tax revenue will be urgent tasks. To be specific the urgently needed reforms relate to,

Secondly, even where specific devolution of power has been carried out by statute, if there are no human resources or structures in place able to perform the tasks devolved, nothing will result. It is in this context that organisational reforms such as local assembly reform, administrative reform, reform of the system applying to public servants, training of human resources and personnel, citizen participation and mergers between local governments become necessary.

Thirdly, the administration is a public service provided for tax-paying citizens, the public being the client base. Public services are provided with limited financial resources, making it necessary to introduce private enterprise management practices in order to provide high quality services efficiently. Accordingly, the replacement of public accounting practices by private enterprise accounting practices, such as NPM, *2 ABC, ABM and ABB *3 becomes a matter of vital concern.

Fourthly, local government is under heavy pressure to devise systems for creating new policies, legal affairs relating to policy and analysing policies.

Local government now has direct official authority in relation to most fields touching upon the daily lives of Japanese people. If this authority is utilised thoroughly from the client service standpoint used by private enterprise, this should, as a matter of course, open up the prospect of Japanese revival and economic recovery. There is, in fact, no other option. The real purpose of decentralisation reforms has to be to sweep away the sense of oppression that covers Japan and to find a way forward. Of course this route has barely opened and whilst enlightened governors and mayors are striving for reforms that will fulfil this purpose, the light has not yet dawned for most local governments. It is with this perspective that the following developments in local government services and management will be introduced below.

(1) Public Order

The state has power over diplomatic relations, defence and justice, the prefecture being responsible for policing, whilst municipalities have responsibility for family registration, basic citizens' registers, seal registers, alien registration, burial and cremation permits and so on. In efforts that put the convenience of citizens first, many municipalities have now introduced one-stop-shop style service, out-of-hours service and use of convenience stores as agencies.

(2) Welfare and Medical Treatment

There is a marked difference appearing between local governments since authority over the nursing care service has been handed over to local government. Some are actively pursuing reduction in the payments made by citizens for nursing care and improvements in the content of that service, whilst others are not.

(3) Education

The broad gap between responses of particular local governments is illustrated by the level of introduction of personal computers in elementary and middle schools. The central government's goal is that by 2005 'all classrooms will be able to use computers in all lessons', however whilst there are 72 computers per targeted school in the city of Ogaki in Gifu Prefecture, the city of Toki in the same prefecture has only 7 machines per school.*4

(4) Childcare

According to White Paper on the National Lifestyle statistics, one repercussion of the recession is that salaried worker households where the wife is also in the workforce are on the rise. Families are unable to meet their expenses solely on the husband's income as bankruptcies and cases of restructuring follow one after another. The proportion of wives of salaried workers who are full time homemakers has fallen as low as 1 in 4. Demand for childcare has rise to the same extent, with children on waiting lists for childcare centres in large cities on the increase. As part of deregulation the central government recognised private management of approved childcare centres from April 2000. The Tokyo Metropolitan Government has taken the keenest initiatives in this area, introducing a new approved childcare centre system *5 in August 2001. As of 1 April 2002, approval has been given to 75 childcare centres and plans are in place for further expansion in the current fiscal year.

(5) Waste Disposal

The Waste Disposal Law *6 controls waste management. Waste is separated into the categories shown in the diagram. Waste is an important citizens' lifestyle issue, which touches upon peoples' lives, physical existence and possessions. General waste disposal management is a local government function following the decentralisation reforms. Whilst the nature of the function has not changed, the management of industrial waste has been shifted by the reforms from being institutionally delegated to being managed by local government, enlarging local government's discretion and authority. I want to expand on the general waste management , which is indispensable to the citizens' lifestyle.

General waste collection, transportation and disposal is divided into the following four methods under the Waste Disposal Law,

Of these, the first two are the usual practice, the third option occupying a complementary role. Amongst these third method municipal approval cases, trends in recent waste-related court decisions show that the courts recognise that mayors possess a broad discretion in relation to general waste disposal approvals, based on the general authority and responsibility for waste disposal resting in municipalities, the courts being willing to respect mayoral decisions within that discretion. However, the courts have been unwilling to accept the exercise of prefectural governor decision-making power relating to industrial waste disposal service providers and facilities, requiring that approval be given in all cases where there has been compliance with conditions decided by the courts.

Further, there is heightened awareness amongst citizens of waste related issues. The enactment by Tokyo's Suginami Ward of a by-law, which imposes a 5-yen tax per plastic bag given to shoppers at the cash register at supermarkets and other shops within the Ward, is topical.

(6) The Third Sector

In addition to providing the public services mentioned above, local government is also undertaking third sector enterprises in order to ensure the efficient delivery of quality services. If the third sector is defined as auxiliary organisations in which local governments have invested then, as at 1 January 1999, there were 10,135 such legal entities nationwide. These bodies comprise 1697 statutory public corporations receiving investment only from local government , 3,266 joint-stock companies, 218 limited liability companies, 4,406 incorporated foundations and 548 incorporated bodies. Third sector undertakings mostly involve local and city development projects, followed by tourism and leisure related activities and agricultural, forestry and fisheries projects. The Ministry of Home Affairs has announced that 47.1% of the 8,395 bodies that receive more than 25% of their funding from local government were in deficit as at 1 July 1999. According to Teikoku Databank figures, there were 22 cases of bankruptcy in the third sector in 2001, most of these being leisure or resort operations. *7 For the sake of the financial health of local government, private enterprise management practices must be introduced to achieve efficiency and revitalisation in administrative management focussing on the third sector. Private enterprise management practices should be introduced, not only to the third sector, but also to local government administration itself. Local governments that employ NPM, ABC, ABM and ABB are already appearing in quick succession. *8

This is truly the era of local government. Japan has passed through more than 50 years of post war progress as a free and democratic nation and experienced the end of the Cold War, economic recession and local and national financial strain. The Japanese economy and lifestyle, grounded in local tradition, culture and customs, is pursuing recovery from the base of the democratic and free grassroots activities of the citizens, rooted in the earth. It is undeniable that these are conditions in which Japan's national identity, its individual traditional culture, can be established and in which the first steps can be taken towards a 'respected position' in international society as an 'ordinary state'. In fact it is essential that each layer of Japanese society makes a firm decision to see this aim realised.

(Author's Note: The views expressed in this article were largely inspired by the views of prominent citizens and local government leaders expressed in the NHK Special 'Structural Reform Emerging from Localities' broadcast on 6 and 7 April 2002.)