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News Release

The Need for a City Manager System in Japan
to Increase the Momentum of the Sanmi-Ittai Reforms

Janualy 19, 2006


The sanmi-ittai ["three-in-one"] reforms finally got under way on December 2005, when the central government and the chiho roku dantai [six local government organizations] agreed on the transfer of ¥3 trillion in sources of tax revenue to local governments and reduction in state contributions to local government finances of the order of ¥4 trillion. However, the principal objectives of the sanmi-ittai reforms are to transfer powers and sources of revenue from central to local government, promote regional regeneration, and resolve the problems of public finance. In this light, it is clear that the sanmi-ittai reforms still have a long way to go.

Japan has already seen the launch of a number of reform initiatives, including municipal consolidation, the PFI system and the designated management agency system, are already under way in Japan. To date, however, these initiatives have had little effect in terms of revitalizing local economies and rebuilding local government finances. A survey of approaches taken in other countries reveals that reform initiatives in the United States have not been limited to downsizing (e.g. the outsourcing and privatization of public services) and that, since the beginning of the 1990s, the drive for a fundamental review of the management of local government has begun in earnest. A growing number of municipalities are adopting the "city manager" system. The following paragraphs describe the city manager system in outline and consider the potential for the adoption of a similar system in Japan.

Municipal governments in the United States can be divided into the following major forms:
(i) Mayor/council government
This form is similar to local governments in Japan. To prevent the concentration of power in the hands of one man, the prevailing tendency in the early years of the nation was to keep the powers of the mayor to a minimum. In the second half of the 19th century, as administrative demands grew, a trend emerged whereby mayors were given greater powers, giving rise to two sub-categories of mayor/council municipal government, the conventional form becoming known as "weak-mayor/council" form and the newer form as "strong-mayor/council" form. However, this form of municipal government has not gained widespread popularity owing to its inefficiency, in that, for instance, where mayor and council are at odds politically, the situation cannot be resolved before the next election.
(ii) City commission government
A commission fulfills the legislative functions of municipal government and one of the commissioners is designated to act as head of the executive branch. This scheme, which first appeared in the early years of the 20th century, was designed as a direct means of expanding administrative services and became popular as a means of responding to growing administrative demands. However, owing to the difficulty of finding commissioners with the required specialist skills knowledge and skills, the trend for adopting this form of government has slowed.
(iii) Council/manager government
A specialist manager appointed by the council is given responsibility for administrative operations. This form of government has gained in popularity as municipalities have become aware of the shortcomings of the mayor/council and city commission forms of government and has been adopted in other developed nations.
(iv) Town-meeting government
A typical scheme for direct government by local residents in which, in principle, all residents participate, and in which local residents debate and decide administrative issues. The considerable physical constraints involved mean that this form of government is now rare.

In recent years, the trend away from mayor/council government and towards council/manager government has gathered momentum. The major reasons are (i) the weakness of local government finances (ii) the growing demands on administrative services and (iii) the increasing need for strategic management. The increasing pressure for downsizing and productivity improvements due to fiscal constraints has made it essential for local governments to manage their business in a strategic manner, making use of outsourcing and undertaking fundamental reviews of executive organizations in response to the growth and diversification of demand for administrative services. In particular, the growing problem of the stagnation of local economies has made the ability to pursue integrated projects a key issue.

Moreover, the experience of the United States suggests that adoption of a city manager system would significantly further the cause of local government reform in Japan. A typical scheme is that of the "contract city". Instead of providing public service, such as police and water and sewerage, itself, the municipality commissions outside agencies to provide the services. The adoption of this scheme has been growing since the second half of the 20th century, in parallel with the adoption of the city manager system. Moreover, the simple style of council adopted by local governments in the United States would also lend momentum to local government reform in Japan. Local government councils in the United States tend to have far fewer members than their counterparts in Japan and in the majority of cases council members continue in their regular occupations and serve on a part-time basis. Councilors' salaries are also lower. In the United Kingdom, France, Germany and other developed nations in Europe, the position of local government councilor is regarded as a largely voluntary one.

It has been claimed that the introduction of a city manager system in Japan would be problematic in constitutional terms. However, the following three points suggest that the introduction of such a system would in fact be entirely compatible with Japan's present constitution.
(i) Chapter 8 of the present constitution, which deals with local self-government, was originally included at the suggestion of Douglas MacArthur. Although the local government systems built up in Japan since 1888 cannot be ignored entirely, it is, if anything, the history and background to the creation of the MacArthur draft that are more important considerations in the interpretation of the present constitution's provisions on local government.
(ii) In this light, it is difficult to interpret Article 93 of the constitution as purely and simply providing for the establishment of dual representation. Article 93 Paragraph 2 of the constitution provides for the direct election by local residents not only of the heads of local public bodies and council members, but also of other officers specified by law.
(iii) The history of the American approach to local government that is thought to have served as the model in the creation of the MacArthur draft constitution suggests that, rather than providing for a simple dual representation system, Article 93 provides for a "weak-mayor/council" form of government in which the heads of the various executive bodies are appointed by public election as a means of preventing the mayor from gaining excessive power.

Even if there are no constitutional objections, some may argue that the increased scale of administrative units due to municipal consolidation in recent years effectively presents an obstacle to the adoption of the city manager system. It is true that, in the mid-20th century, the city manager system tended to be adopted by middle-sized or smaller municipalities rather than by major cities. In recent years, however, the situation has changed. Today, huge cities are also eagerly adopting the city manager system. For instance, of the US cities with the 10 largest populations, seven, including Los Angeles, which is the second largest,have adopted the city manager system, and only three have mayor/council governments.

The chief purpose of adopting the city manager system is not to create new posts, but to serve as a catalyst to the pursuit of more appropriate forms of government and to a fundamental rethink of style of government with a view to resolving fiscal problems and regenerate local economies. To this end, the mere adoption of the city manager system will not be enough, and the following three measures in particular will be required.
(i) The further expansion of the powers of local governments. This will require the abolition of central government guidelines on compulsory placement regulations, etc.
(ii) Further relaxation of restrictions on market participation. The key to the success of the contract city system is to encourage competition on the supply side. This makes it possible to outsource good quality services at low cost.
(iii) Greater support for non-profit organizations. Rather than subsidies, the use of NPOs and participation by local residents will be the key.

For more information on the content of this report, please contact: Hidehiko Fujii the Japan Research Institute, Limited.

Tel: :03-3288-4615

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