Prime Minister Yukio Hatoyama held his first meeting with the nation’s prefectural governors in late November and laid down the principle of devolution. Under the principle, local governments would decide on and carry out policies closely related to their residents and the central government would help them when needs arise.

Gov. Wataru Aso of Fukuoka Prefecture, head of the National Governors’ Association, praised Mr. Hatoyama’s idea of increasing local governments’ decision-making authority.

On Dec. 14, a “strategic conference” for devolution comprising the prime minister, Cabinet members and experts (including local government representatives) decided to enact a comprehensive law for rationalizing the division of labor between the central and local governments in the coming Diet session, and to adopt a “strategic outline” describing details of devolution by the summer of 2010.

As a first step, the administration should create as soon as possible a venue with a legal backing for consultations between the central and local governments. The central and local governments should be able to discuss policy matters on an equal footing, replacing the current system in which the central government imposes its decisions on local governments.

And Mr. Hatoyama should heed Mr. Aso’s request for clarification of the division of roles between the venue and the strategic conference, which will also be given a legal backing.

For devolution to take root, the economic and financial foundations of local governments must be strengthened. The central government should strive to increase tax-funded grants in aid to them. Grants have been cut by more than ¥5 trillion since the days of the Koizumi administration. Some central government policies may shrink local government coffers and weaken local economies. The administration should handle these policies carefully.

For their part, local governments should be ready to shoulder more responsibilities, including tightening controls for handling public money.

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