APRIL 24, 2000 VOL. 155 NO. 16

PROVINCIAL POWER
Japan's Governors Take Aim At Mighty Tokyo
By DONALD MACINTYRE Tokyo

When Shintaro Ishihara let fly with his anti-foreigner invective last week, it was a striking--if controversial--show of "Governor Power." A small but growing number of Japanese governors are quietly thrilled every time Tokyo's combative chief executive makes headlines, whether he's bashing the central government and its bureaucrats or taking on other sacred cows. These reformers outside the capital are waging their own battles against a top-down system they view as hopelessly inefficient and badly out of touch with local needs. When Ishihara tangled recently with Japan's big banks, forcing them--against central government objections--to start paying a hefty tax to the city, many lauded him for striking a blow for autonomy. "His way of doing things may be different," says Morihiko Hiramatsu, Governor of southern Oita prefecture, "but he has really fired up Japan's governors."

Numbering 47, the governors need all the energy they can muster. In the country's highly centralized system of government, the mandarins who run the powerful ministries have enormous influence over local spending. From their offices in central Tokyo, they control a flow of state funds that can mean life or death to towns as far as than 1,000 km away. This power of the purse gives these bureaucrats a free hand to impose mind-numbing uniformity on much of the country. The often-cited story of the town that couldn't move a bus stop without Tokyo's permission is only the most famous example of the central government's long reach.

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The system has begun to unravel during Japan's decade-long economic slump. Many localities are broke. The national government, burdened with the biggest debt load among the advanced industrialized countries, can't dish out cash the way it did in the good old days of turbocharged growth. As a result, Hiramatsu and other reformers are challenging the system, demanding greater authority to raise money and more say over how it's doled out. Facing local pressure to spend more efficiently, these leaders are canvasing independent opinions on public-works projects and encouraging greater scrutiny of how money is spent. The goal, says Sukeshiro Terata, Governor of northern Akita prefecture, is to find local solutions to local problems: "The days when you can run the whole country the same way are over."

The governors complain most about their limited powers to tax and spend. About two-thirds of the money prefectures raise in taxes goes to the central government. A big chunk of that comes back in the form of subsidies and spending on projects like roads and bridges. But the ministries that shell out the funds run the projects, so if a governor thinks his prefecture doesn't need a proposed agricultural road, he can't redirect the money to build a nursing home. At the same time, local taxpayers feel they are losing if they don't get their share of the largesse Tokyo parcels out. "It is a system of irresponsibility," says Masayasu Kitagawa, Governor of Mie prefecture. "If you don't create a system in which you can decide and take responsibility for yourself, the system will derail."

The governors are agitating for change, trying to rebuild the system from the ground up. Kitagawa has set new standards for information disclosure publishing a balance sheet of his government's assets and debts, a first for any prefecture in Japan. He has also brought in outside experts to assess whether government projects are really worth doing. In Miyagi prefecture, Governor Shiro Asano has backed citizens' demands for disclosure of excessive entertainment spending by local officials. His personal style and flair for promotion have attracted nationwide attention to the issue of regional authority and helped to rewrite the role of a governor. Asano personally promotes Miyagi's rice in light-hearted television spots and even hosts a weekly radio program, playing songs by his long--time hero Elvis Presley.

The battle for autonomy is just beginning, and the critical question of spending reform is far from settled. The governors are making themselves heard, but for now at least, they can't impose their will on the central government. Moreover, prefectures outside Tokyo can't pull tax stunts like Ishihara--big companies that have to be in the capital at almost any cost could abandon other regions if taxes get too high. "So far it is not structural change," says Masayoshi Honma, an expert on Japanese politics at Tokyo's Seikei University. "It depends on the governors' personalities and attitudes." If Ishihara is a guide, those qualities should never be underestimated.

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