i) Promoting decentralization

Under the situation that decentralization has been put into practice, municipalities which have general responsibilities for providing public services as basic local governments are strongly expected to promote city planning which reflects their characteristics with their decisions and responsibilities positively, and to realize characteristic and vigorous municipalities. In order to do so, in addition to strengthening the administrative and fiscal bases and promoting efficient administration, they are required to produce ideas in accordance with their situations, and to decide and practice public services and policies autonomously and positively.

　

ii) Coping with diversified and sophisticated wide-area administrative issues

Due to the development of traffic systems and recent rapid development and popularization of the ways of informational communication, the ranges of residents' activities has become wider beyond administrative areas, and therefore the demands for wide-area city planning and policies such as the development of wide-area traffic systems, unified development and mutual utilization of public infrastructures and land use beyond administrative areas have increased.

In addition, today municipalities are required to cope appropriately with diversified and sophisticated wide-area administrative issues such as aging, environmental problems and informational developments.

　

(a) Coping with aging

Due to progress in aging, demands for medical care, health, and welfare have increased and therefore the problems of the increasing amount of related various costs and the lack of related human resources have arisen. It is true that municipalities are required to secure sufficient amount of related human resources and improve their specialties in order to provide health and welfare services smoothly, but it is sometimes difficult for municipalities to respond, depending on their scale or their administrative systems. On the other hand, the problems of the decline in powers of regional economy and the decreasing amount of tax revenues according to the decline in working population have arisen, and under these situations municipalities are required to keep providing basic public services.

　

(b) Coping with environmental problems

Under the situation that residents have been rapidly more conscious about environmental problems, constructing larger incinerators has become an urgent issue in order to control the emission of dioxin. On the other hand, municipalities are also required to deal with the promotion of recycling and the protection of natural environment from the wide-area viewpoint beyond administrative areas.

　

(c) Coping with informational development

In coping with rapid informational development, municipalities are required to develop public services with high information technologies and promote regional informational development. In order to do so, it is necessary for municipalities to develop the organizations of information technologies and secure the sufficient number of human resources with special abilities. On the other hand, it is expected that informational development will make the wide-area development of public services easier and dissolve the gap between residents and administration, which will lead to maintaining and improving the standards of basic public services.

　

iii) Coping with the fiscal situations of national and local governments

The fiscal situation in Japan is very severe because the total amount of long-term debts of both national and local governments will reach to about 693 trillion yen, and among the total amount, the mount of long-term debts of local governments among the will be over 195 trillion yen at the end of fiscal year 2002. Under these difficult fiscal situations of both national and local governments, in order to maintain the standards of current public services in the future municipalities are required to strengthen administrative and fiscal bases, to realize simpler and more effective administrative and fiscal managements, and even to promote wide-area city planning beyond existent administrative areas.

The Second Guideline mentions at first the position of municipal merger in the process of promoting decentralization.

The movements of promoting decentralization (so-called the first decentralizing reform), which began with the Resolution for the Promotion of Decentralization passed by both Houses of the Diet in June 1993, has been put into practice through the enactment of the Decentralization Promotion Law in May 1995, the establishment of a Decentralization Promotion Committee in July 1995, the five Recommendations made by the Committee, the two "Decentralization Promotion Plans" formulated by national government (approved by the Cabinet), the enactment and promulgation of Decentralization Package Law (the parts related to Law for Exceptional Measures on Municipal Merger were enforced on the day of promulgation), and the enforcement of the Law in April 2000.

Then it is considered that promotion of municipal merger is one of the effective ways to make the most of the products of decentralization. Small towns and villages which have not yet merge have limited abilities to manage their administrations in accordance with the residents' demands and regional situations in the era of decentralization because their officials have to do many affairs at the same time. And it is difficult for them to adopt and keep officials with sophisticated knowledge and skill. Municipal merger is one of the necessary ways to solve these problems and to make reliable and creative administrations.

Although there were so-called "arguments about receivers", which were advocated mainly by ministries and agencies which were passive to decentralization, that in the process of realizing decentralization it was not until the receivers have been developed, that is, these scales and abilities have been made appropriate that decentralization would progress because local governments, in particular some municipalities, were so small that they didn't have enough abilities to manage their administrations, decentralizing reform were done in a way to avoid these arguments because these were just excuses for preventing decentralization.

That is, the essence of the requirements for this decentralizing reform was to reduce as much amount of participation of national government as possible and to build an equal and cooperating relationship between national and local governments because much more administrative affairs have already been distributed from national governments to local governments in Japan than in any other developed country in the world and because it was considered that it was not the amount of affairs of local governments but the degree of freedom in executing administrative affairs that was insufficient.

Therefore, municipal merger has promoted with decentralization not as a prerequisite condition for realizing decentralization but as a means for promoting decentralization, and in addition, it has been positively promoted as a means of making the best of the decentralization reform after Decentralization Package Law was enforced in April 2001.

In fact, the Second Recommendation produced by a Decentralization Promotion Committee in July 1997 recommended promoting municipal merger including the amendment of Law for Exceptional Measures on Municipal Merger as a part of the development of administrative system, and this content reflected on Decentralization Promotion Plan made in May, 1998, and then it was included in the amendment of Law for Exceptional Measures on Municipal Merger by Decentralization Package Law enacted in July 1999. In addition, after the enforcement of Decentralization Package Law, Decentralization Promotion Committee turned in "The Opinion about Promoting Municipal Merger" in November 2000, which asked national government to make plans for more promoting municipal merger with the amended items of Law for Exceptional Measures on Municipal Merger.

The Second Guideline also mentions "coping with diversified and sophisticated wide-area administrative issues" following promoting decentralization. That is, it indicates that there is a necessity for more expanding the living area and providing public services in municipalities in wide-area ways behind the current movements of municipal merger. Programs for health and welfare programs due to aging, programs for waste treatment for environmental problems, and various public services for residents with regional informational development are examples of the necessity for providing public services in municipalities in wide-area ways.

The area of daily life such as the area of commuting and school zone has been established by the policies such as the formation of wide-area municipalities since around 1970 and the tendency toward widening and clarifying the living area and changing from centralized regional structures to decentralized regional structures within prefectures can be found from the result of census.

Aging and decreasing number of population have become real problems, and they are expected to progress rapidly in future. This is mainly because the sum of special birth rate has decreased year after year to 1.36 in 2000, which was far below the standard for maintaining the number of population (2.08).

According to the estimate (median estimate) made by National Institute for Social Security and Population Problems in January 2002, the total number of population is expected to reach at the peak to 127,710 thousand in 2006, and then the number is expected to decrease to 100,590 thousand in 2050. The proportion of the number of young population (between 0 to 14 years old) and the number of old population (over 65 years old) in total number of proportion was 14.6 percent and 17.4 percent respectively in 2001, but it is expected to be 11.6 percent and 28.7 percent respectively in 2025, and then 10.8 percent and 35.7 percent respectively in 2050.

It is expected that this change of population structure will have a big impact on communities. Especially for the regions between mountains and farming and fishing villages which have had tendencies to outflow population and become aging, it is considered that they have to take drastic measures including municipal merger in order to maintain and improve the basic municipal public services because aging has progressed at the pace far above the national average in these areas.

In addition, particularly urgent issues among those of municipal administration which are considered the most necessary to manage in wide-area ways such as the establishment of big-scale facilities of industrial wastes, the management of nursing care insurance, and the establishment of wide-area systems of fire-fighting/disaster prevention, have been mainly coped with so far mainly with joint management of mutual affairs such as partial cooperatives and wide-area union system, and in fact these responses have produced certain results. But it is considered that from the viewpoints of clarifying who owes the responsibilities, making fast and appropriate decisions, securing human resources, and developing general administrations, single municipalities formed by municipal merger can make decisions and administer projects more effectively.

The issues for coping with the informational development are developing the systems and securing human resources with special abilities to support the systems, which are one of the backgrounds of municipal merger, and it is expected that the mutual function of the Internet will bring the chances to change the ways of interactions between residents and administrations a lot, and will be effective for not only procedural rationalization through electronic application and delivery of notifications, but also a new method of residents' participation in the process of policymaking.

According to the Third Guideline, national government has clearly adopt the policy that it will realize the administration which deals equally with electric information and written information by fiscal year 2003, and it has been supporting the efforts to develop electric municipalities. Municipalities are expected to promote to make administrative procedures between residents and administrations online, and remove the geographical restraints after municipal merger, utilizing the basic specification of the system made by Ministry of Public Management, Home Affairs, Posts and Telecommunications in March 2002.

Anyway, it is necessary for merged municipalities to prevent residents' autonomy from deteriorating by expanding areas due to municipal merger, utilizing the results of information and communication technology more.

Finally, the deterioration of fiscal situations mentioned in the Second Guideline will be examined especially from the viewpoints of local finance. From the broad view, the total amount of long-term debt of the whole local finance will increase to 195 trillion yen at the end of fiscal year 2002, which is 2.5 times as much as the amount 10 years ago, due to the increasing amount of local bonds issued for compensation of the shortage of revenues because of the decreasing amount of local tax revenues and tax reductions, and for implementing plans to stimulate economy. From the detail view, the ratio of ordinary balance, which is considered preferable if it is around between 75 percent and 80 percent, was 78.8 percent on weighted average of all municipalities in fiscal year 1985, but it has increased to 83.6 percent in fiscal year 1999 and the number of municipalities whose ratio were over 90 percent is 267, which occupied 8.3 percent of total number of municipalities. These situations indicate that the local fiscal structure has become inflexible. The ratio of debt burden, which has been considered cautious if it was over 15 percent, and dangerous if it was over 20 percent until recently, was 7.8 percent on weighted average of all municipalities in fiscal year 1975, but it has increased to 11.3 percent in fiscal year 1990 and to 16.3 percent in 1999 and the number of municipalities whose ratio of restriction on issuing bonds were over 10 percent is 1,500, which occupied 46.5 percent of total number of municipalities. These situations indicate that structural reform by thoroughly improving the efficiency of administration through municipal merger is essential.