Stop dictating how local governments spend national grants, and give them one lump-sum grant they can use freely
In short
- The national government gives money to local governments as one lump sum, without fixing how every piece must be spent.
- An independent agency, not a minister, calculates how much each local government gets, using a set formula.
- Local governments decide for themselves how to spend the money to fit the needs of their own areas.
- The national government sets only the minimum standards that must be kept in areas like schools and health care.
If this comes true
A small coastal town, which once got road money it could only spend on roads, now uses its lump-sum grant to run a boat every day to an island with no doctor, and a grandmother on the island picks up her medicine at the harbor.
Perhaps
The town council might cut the budget for sign language interpreters because few people use it, and a deaf boy might no longer be able to follow his teacher in class.
Water so far 💧 0
The proposal in detail
This covers the money that passes from the national government to local governments as subsidies, where the uses and procedures are set in detail. Except for a very small part that the law says needs special protection, these subsidies are combined into one grant, and each local government can decide freely how to use it by a vote of its assembly. The amount for each local government is set by a formula that combines population, the share of older people and children, conditions such as area and remote islands, and how much tax the area can raise by itself. The calculation is done by an allocation agency that is independent of the government. Ministers and lawmakers cannot add to the amounts for individual places or pick projects to hand money to. In place of control over spending, the national government sets by law the minimum standards that should hold wherever people live, such as compulsory education, basic medical care, and water and sewage. If a local government falls below a standard, national experts first help it improve, and only if it stays below for a long time is the money for that one field temporarily returned to designated uses. The offices that handle subsidy applications and reviews are cut back sharply, and their staff are moved to work on the ground in local areas. The move to the new system takes several years, and for local governments whose amounts would suddenly drop a lot, a limit is set on how much they can lose.
BenefitsMoney can go to what each area truly needs
Once spending is no longer dictated, local governments can put money into what truly troubles their residents instead of what a subsidy happens to cover. They can reach work that never fit the uniform national subsidy molds, such as a boat to an island with no doctor, snow removal in a town with heavy snowfall, or check-ins on elderly people in a village with many older residents. When the paperwork and reviews for winning subsidies disappear, local staff can use that time to work for residents, and the national government no longer needs large offices for reviewing. Because an independent agency sets the amounts by formula, the amounts no longer change because of ties to a minister or a powerful lawmaker, and money reaches every area by the same logic. Also, since local governments decide how to spend the money themselves, they cannot blame the national government when things fail. Residents can question the mayor and the assembly they elected directly about how their town's budget is used. When the flow of money is shorter and easier to follow, it also becomes easier to see who decided what. Only by moving the power to decide together with the money, instead of leaving decentralization as mere words, can we build the foundation for each area to come up with its own ideas.
DrawbacksThe support people get can differ widely depending on where they live
Money that can be used freely is open to good uses and bad uses alike. Towns that listen closely to their residents may come up with creative ideas, but in towns that do whatever powerful people want, the money might flow to showy buildings or to jobs for supporters. Subsidies with fixed uses also had the role of reliably protecting support for small groups of people. Support for people with disabilities, education for children who speak minority languages, and treatment for addiction bring few votes in local assemblies, and they risk being the first things cut once the money can be spent freely. Even with national minimum standards, nothing can be done until an area drops below them, and in the time between the drop and the return of controls, the ones who suffer are the people who need support. Differences in judgment from one local government to another also create differences in the support people receive depending on where they live. The unfairness of being unable to get help that the next town over would provide weighs most heavily on those who cannot move. And when the center's eyes reach less far, corruption in local areas also becomes harder to find. Moving the power to decide to local areas means that society as a whole accepts local failures and gaps between places.
Learn the background
Decentralization is promised in many countries, but even when powers are said to be transferred, the center often keeps its grip on how the money is spent. Most of the money flowing from the national government to local areas comes as subsidies with detailed conditions: this form for roads, this standard for facilities. For a local government, it pays more to build whatever the subsidy covers than what the area truly needs. That is why we see oversized facilities built in towns that are losing people, leaving only the upkeep costs behind. The paperwork and reviews needed to get a subsidy take enormous effort, and local staff spend more time working to explain themselves to the national government than working for residents. This system does not change because handing out subsidies is a source of power for national ministries and politicians. Being able to decide which town gets which project becomes a way to make local areas obey, and it can also be used as a reward at election time. Local governments have their own comfort too: if the national government decides how money is spent, they can blame it when things fail. So even as the transfer of powers moves forward in words, the real power to decide hardly ever reaches local areas.
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This proposal was written in Japanese by AI (claude-opus-5-5, policy version 2026-10-23a) and translated by AI (claude-sonnet-5-5). Nobody has checked the facts. Read the original (日本語) How the AI writes