Why Decentralize?

MITA Katsushige
Vice Chairman

November 1994 marked a turning point for the "Heisei Reforms" and their goals of reworking the political system, rewriting the tax code, and decentralizing governmental authority. Not only were bills to reform the political and tax systems passed by the Diet, final reports on decentralization were submitted by the Working Group for (Promoting) Decentralization of the Administrative Reform Promotion Headquarters, a ministerial-level group, and also by the Local Government System Research Council, an advisory group to the prime minister. These recommendations were in addition to those already received in September from the Decentralization Promotion Committee, a group of six local government organizations.

There are many reasons why reform is necessary, and one of the most important is socioeconomic maturation. As living standards rise, people are no longer satisfied with values forced on them by "business" or "the powers that be." They want more independence and variety. When it comes to consumption, it is consumers who understand best what they need. That is why we, the business community, place so much emphasis on customer satisfaction. In local communities, it is residents who know best what must be done. Decentralization is thus part and parcel of the same "customer satisfaction" idea.

The second reason for decentralization is that Japan finds itself in the midst of vast changes both domestically and internationally. At home, we are making the transition from the "how to" age to the "what to" age. Companies are being asked to show more self-dependence; instead of "me-too" strategies that seek conformity, they must be able to say "this is what we make and you'll find it nowhere else." Internationally, the situation has best been summed up by Yasushi Akashi, Special Representative of the Secretary-General for the former Yugoslavia, who said, "The postwar world must respect differences. We are no longer divided into the two camps of communism and liberalism. The world is a more varied and colorful place than that." This "respect for differences" involves both a "recognition of differences"and an"acceptance of differences." This is just as true for individuals and nationalities as it is for states, and within any one country it also holds true for different regions. As is the case with corporate autonomy, decentralization is crucial because it enhances the potential for more richly varied regions. That is why I think Mr. Akashi's comment captures the essence of the changes that are taking place. Decentralization in Japan is a recognition of "internal diversity" and it is reaching a stage that should put it on par with the recognition of "external diversity" that comes with internationalization.

For this reason, it is extremely frustrating to see people in favor of the general idea of decentralization while opposing all of the specifics. Let us move beyond this impasse and get to work on the decentralization that Japan so obviously requires.

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