Japan

1. Institutionalization of a Japanese version of BID (Business Improvement District) The main topic of the PB in 2018 is the legislation of the Japanese version of BID as national law. The basic scheme of the law is as follows.

   a. Area management organization applies for “activity plan” to the municipality after obtaining the agreement of two thirds or more of a beneficiary;

   b. Municipality authorizes the plan;

   c. Enact the ordinance. Collect burden charge from a beneficiary.

   d. Give grant to area management groups;

   e. Area management organization carry out area management activities based by grant;. Although the system has just been established and there is no applicable group yet, several municipalities have been exanimating of conducting the system.

2. Increase of “small-scale multifunctional local organizations.” In 2011, Unnan-shi, Shimane prefecture decided to provide grants with a relatively higher degree of freedom. This system is called a small-scale multifunctional autonomy system and has widely.
3. Wide spread use of “benefit-your-locality” tax scheme. The scheme allows residents to choose to divert part of their residential tax to a specified local government. Revenue is expected to increase, as they collect donations at the same time. The system has been popular, and the amount of payment is growing rapidly, as the local governments give back thank you gift back to payers. In 2018, the amount collected by the scheme reached 512.7 billion JPY, 1.4 times more from the previous year. However, the cost of rewards increased, and the scheme was revised to set restrictions in 2019. Spread to all Japan from 2016 to 2018. The number of local governments promoting this system currently counts up to 255.

The trend of PB in Japan is in two directions. One is residents can select the usage of part of the tax. The other is the increase of PB through grants to a community organization. In the former case, there is an increasing menu of funding for community organizations. The latter case reflects the needs of government administration which desire to improve service to residents through enhancing resident organization and developing a partnership, while the local government itself is forced to trim down by administrative reform. On the other hand, the participation of citizens in the budgeting itself on the local government does rarely exist. The background is that local administration and parliament do not welcome the participation of residents in budgeting. Therefore, there is a question whether the PB, which was initially aiming to strengthen democracy, is moving towards enhancing citizens’ participation sufficiently. On the contrary, the aspect of promoting and subcontracting the administrative services by the community organization is becoming stronger. In the future, the central government has also made a direction to make efforts to strengthen and nurture resident organizations. In this trend, more municipality will introduce PB methods. To connect these movements to strengthening of democracy rather than merely subcontracting and complementing resident organizations by the administration, strengthening the policy advocacy ability of citizens, residents, and resident organizations.

There are five types of PB in Japan:

1. Municipal budgeting decided by most or a part of residents’ participation (present implementation: 0). It has been implemented in Shiki city for four years from 2003. There is no implementation now.
2. Allocate a certain amount of budget to the resident organization and entrust the execution (present implementation: 150) “small-scale multifunctional local organizations”.
3. Adopt the project proposed by the resident organization for budgeting (present implementation: unknown).
4. Residents choose the budget allocation to the project indicated by the local government. In this case, there are two types:

   a. Residents share part of the resident tax by voting on the NPO project chosen by the local government (present implementation: 5).

   b. “Benefit-your-locality” tax scheme. Residents allocate part of the resident tax to projects of other municipalities (present implementation: 1708).