Comparative Local Governance: Lessons from New Zealand for Japan by Harufumi Shiba A thesis submitted to the Victoria University of Wellington in fulfillment of the requirement for the degree of Doctor of Philosophy in Public Policy School of Government Victoria University of Wellington 2008 Abstract This study concerns local governance in Japan and whether lessons can be derived from New Zealand and other countries. There are significant differences in the constitutional arrangements of Japan and New Zealand and the history and cultural influences that shape local governance in each country. The case studies, which compare three different policy areas in both countries, confirm, however, the usefulness of the comparative analysis. This is not a parallel comparison; the focus is more on lesson learning from different systems and styles of local administrations. The Japanese local government sector is more subject to control and guidance from the centre. A premise of this study is that that a greater degree of autonomy for local government in Japan will be beneficial. ‘Governance’ is a term used in different ways in many contexts. In this study emphasis is placed on the ‘means for achieving direction, control and coordination of individual or organizational units on behalf of their common interests’ (Hill and Lynn Jr, 2004, p. 6). It is associated with the notion of ‘steering’ rather than ‘rowing (Osborne and Gaebler, 1993). Governance is not synonymous with government . In a decentralised environment, local governance concerns the way different interests are settled among, broadly, central government , local authorities and communities . The power balance among central government, local authorities and communities is at the centre of analysis in this study. Six case studies in roading administration, environmental management and emergency management identify characteristics of the so-called ‘strong’ Japanese state while revealing both positives and potential pitfalls of autonomous local governance in New Zealand. Each of the cases is assessed against five criteria ― local capability , responsiveness , coordination , sustainability and financial/economic viability ― and classified as one of eight hypothetical governance ‘types’. Imposed relationships are often observed in Japan, which is contrasted with more consensual multilateral interactions in New Zealand. Constituents of the Japanese power balance include constant administrative guidance ( gyosei shido ), human resource management (including amakudari ) and other ‘informal enforcement’, whereas devolution, contracts and strategic guidance are more conspicuous in New Zealand. Breaking the inertia of age-old practices in Japan would not be an easy task as unsuccessful attempts to reform local government in the past indicate. Political and administrative interests at both agent and institutional levels are inevitably involved. The power balance results not only from strict hierarchy and long- standing institutional influences from the centre, but also from the passiveness of local authorities and communities. Altering the power balance and the nature of local governance can be triggered and sustained in various ways: New Zealand experiences through policy transfer examined in this study can provide useful insights. i Acknowledgement I would like to express my sincere gratitude to my two supervisors, Professor Claudia Scott and Mr. John Martin for their tremendous support patience throughout my PhD study. The completion of this thesis would not have been possible without their academic guidance and encouragement. Editorial input from Georgia Hughes is very appreciated. I am also grateful for the assistance of Rotary International that has given me the opportunity to study at Victoria University of Wellington, New Zealand. ii Table of Contents Abstract i Acknowledgement ii Table of contents iii List of tables and figures vii Chapter One – Introduction Background and interests 1 Research purposes 3 Main focus 4 Methodology 5 Thesis outline and the course of discussion 8 Chapter Two – Public Administration in Japan and New Zealand Introduction 10 Japan 11 General characteristics of local government 11 Institutions and functions 11 Historical background and present state 13 Legislative framework and reform 14 Funding arrangements 18 Central – local government linkages 23 Administrative connection 23 Political connection 25 Local authorities’ autonomy and discretion 26 Public sector in society 28 Central-local relations – overview and reform attempts 31 New Zealand 34 Introduction 34 General characteristics of local government 35 Institutions and functions 35 History and recent developments 38 Funding arrangements 42 Central – local government linkages 44 Administrative connection 44 Political connection 45 Local authorities’ autonomy and discretion 46 Public sector in society 47 New Zealand and Japan: differences and similarities 51 iii Chapter Three – Local Governance: A Theoretical Perspective Introduction 54 Governance 54 Local governance 56 Decentralisation and devolution 57 Subsidiarity 59 Networks and participation 60 Community governance 61 Institutionalism 62 Path dependency 66 Policy transfer and lesson learning 68 Conclusions 71 Chapter Four – Analytical Framework Comparing local governance systems 73 Comparative framework 76 Consensual/Imposed continuum 78 Eight different governance settings 80 Stronger local governance 84 Five evaluating criteria 85 Local capability 85 Responsiveness 86 Coordination 88 Sustainability 89 Financial/Economic viability 90 Criteria and governance patterns 91 Preferences among different actors 92 Chapter Five – Local Governance in Practice: Six Studies Focused comparisons and case selection 95 (A) Roading administration 97 Eastern Transport Corridor in Auckland 97 Introduction 97 Road administration in New Zealand 98 Principal actors 100 Relationships among CG–LG–LC 100 Classification of the Eastern Highway project 107 Overall evaluation 107 iv Nagoya-Seto Expressway in Aichi 109 Introduction 109 Road administration in Japan 110 Principal actors 112 Relationships among CG–LG–LC 112 Classification of the Nagoya-Seto Expressway 121 Overall evaluation 121 Similarities and differences: assessing the criteria 122 Highway in Auckland 122 Nagoya-Seto Expressway 127 (B) Environmental administration 132 Project Aqua in the Waitaki River 132 Introduction 132 Environmental administration in New Zealand 133 Principal actors 137 Relationships among CG–LG–LC 137 Classification of Project Aqua 145 Overall evaluation 146 Subsequent developments 146 Dam construction in the Yoshino River 149 Introduction 149 River administration in Japan 150 Principal actors 153 Relationship among CG–LG–LC 153 Classification of the Yoshino River case 165 Overall evaluation 165 Similarities and differences: assessing the criteria 166 Project Aqua 166 Dam in Yoshino River 171 (C) Emergency management 176 Manawatu-Wanganui flood in February 2004 176 Introduction 176 Emergency management in New Zealand 177 Principal actors 180 Relationships among CG–LG–LC 180 Classification of Manawatu-Wanganui flood 187 Overall evaluation 188 v Aichi flood in September 2000 189 Introduction 189 Emergency management in Japan 190 Principal actors 192 Relationships among CG–LG–LC 192 Classification of Aichi flood 197 Overall evaluation 198 Similarities and differences: assessing the criteria 198 Flood in Manawatu-Wanganui 198 Flood in Aichi 203 Chapter Six – The local governance environment: evaluating the case studies Comparative overview 208 Lessons from case studies 212 Comparative Framework 215 Factors that affect rankings 217 Political ascendancy 217 Administrative ascendancy 219 Informal connections and formal institutions 220 Governance patterns, institutions and informal connection 223 Lessons for improving scores against the criteria 225 Local capability 226 Responsiveness 232 Coordination 233 Sustainability 233 Financial/Economic viability 235 Constraints on change in different environments 237 Concluding remarks and future reforms 239 Chapter Seven – Strengthening Local Governance in Japan: the way ahead Local governance options 242 Option 1: Devolved local government 245 Option 2: Sharing power 251 Practical challenges 256 Summary and conclusions 263 Further research agenda 269 References 271 vi List of Tables Table 2.1: Functions of Japanese public authorities 12 Table 2.2: Main composition of local tax in Fiscal Year 2005 in Japan 19 Table 2.3: Tax and adjustment between the central and local government 20 in Japan Table 2.4: Functions of New Zealand public authorities 37-38 Table 2.5: Financial structure of New Zealand local government 42 Table 2.6: Variations in governance 52 Table 3.1: Policy transfer process 69 Table 4.1: Patterns of political-bureaucratic relations 74 Table 4.2: Different preferences of CG, LG and LC 94 Table 5.1: Criteria rankings in roading 122 Table 5.2: Criteria rankings in environmental management 166 Table 5.3: Criteria rankings in emergency management 198 Table 6.1: Criteria rankings in case studies 208 Table 6.2: Governance classifications and nature of relationship 216 Table 6.3: Criteria and CG/LG/LC 226 Table 7.1: Two paths towards stronger local governance 243 Table 7.2: Four dimensions of local governance 258 List of Figures Figure 4.1: Eight governance classifications 81 Figure 5.1: Map of Auckland Region 97 Figure 5.2: Map of Auckland 98 Figure 5.3: Map of Aichi Prefecture 109 Figure 5.4: Map of Nagoya-Seto Expressway 110 Figure 5.5: Map