This new competition model has three prerequisites: political stability based on election
results, public confidence in government, and a solid belief in local autonomy; fiscal solvency
alone is not enough. Even small local authorities can put forward an exemplary policy for
citizen participation—as did Niseko town in Hokkaido (see “Citizen Engagement” box)—or
for housing aid for earthquake victims—as did Tottori prefecture. While the central
government finds itself in yet another fragile coalition, where policymaking seems an elusive
task, local governments are exhibiting the ability to make decisions and implement them
promptly, and have displayed sufficient authority and gathered enough energy to alter the
balance of the central-local relations.
Reform of the Administrative System
With decentralization part of the broader public-sector reform initiative, the Omnibus Law of
1999 required that sixty-four government functions be devolved to the local level. While the
number is small, it should be remembered that, under the ADF system, most domestic
functions had already been implemented at the local level. So, of greater interest were the new
functions created to satisfy the desire of the central bureaucracy to maintain control over
domestic affairs in order to calm the fears of local authorities that they would inherit devolved
functions without sufficient fiscal resources to handle them