Melco Management Accounting Research
Discussion Paper Series
No.MDP2017-003

New Public Management and Participatory Budgeting in a Vertical Society:
A Japanese Story

January 2017
Yuji MORI*
Associate Professor, University of Shizuoka,
School of Information and Management52-1 Yada, Suruga-ku, Shizuoka, 422-8526, Japane-mail: yujimori@u-shizuoka-ken.ac.jp
Shahzad UDDIN
Professor, University of Essex, UK
Adhikari PAWAN
Lecturer, University of Essex, UK*Corresponding author

The Melco Foundation
Nagoya, Japan
Discussion Paper Series of the Melco Management Accounting Research, in order to promote
the study of management accounting, has published this unfinished paper onto the Web. Pleaseobtain the permission of the author when citing this paper.

New Public Management and Participatory Budgeting in a
Vertical Society: A Japanese Story

Yuji MORI*
Associate Professor, University of Shizuoka, Japan

Email：yujimori@u-shizuoka-ken.ac.jp

Shahzad UDDIN
Professor, University of Essex, UK

Adhikari PAWAN
Lecturer, University of Essex, UK*Corresponding author

Abstract
This paper examines a case of participatory local government
budgeting in Japan, and offers explanations for a lack of citizen
engagement and poor political participation in the process. X council, a
local government unit, was studied intensively through interviews andobservations. Reforms such as the direct participation of citizens haveachieved questionable success. Participation of a sort does occur, albeit inan alternative format through lobby groups. The budget desk anddepartments of the council remain the most powerful actors in thebudgeting process, whereas the assembly members function through lobby
groups rather than being part of the process. The assembly provides anofficial rubber stamp rather than countering the power of the mayor.

Keywords: NPM, Culture, Participation, Budgeting, Vertical Society, Japan1

1. Introduction
This research concerns participation in local government budgeting in Japan.
Many accounting researchers have been interested in understanding new publicmanagement (NPM) reforms in a variety of structural conditions (Ashraf and Uddin,2016). Over the last decade, participatory budgeting has been one of the mostwidespread NPM reforms undertaken by local governments, with 1,500 participatory
budgeting instances in various countries (Célérierand Botey, 2015; Ganuza andBaiocchi, 2012). NPM ideas began to penetrate Japan during the early 1990s(Yamamoto, 1999; Kim, 2010). Previous studies have suggested that political affairs
and prevailing social and cultural values in Japan are significantly different from thoseof Western countries (Nakane, 1970; Van Wolferen, 1989). The adoption of NPM
reforms in decentralised regions of Japan, which have advocated an Anglo-Saxon
attitude toward governance, is likely to raise interesting issues. Nevertheless, studies inthis area, especially in the English-speaking world, are difficult to find.
NPM in local government, including participatory budgeting, has been subject toscrutiny in many countries, especially in Europe and the USA (Nyamori et al., 2012;
Osborne, 2006; Benhabib, 1996; Gusmano, 2013; Rossmann and Shanahan, 2011;
Ahrens and Ferry, 2015; Lapsley, 2009). Many studies have been carried out to identify
the outcomes and consequences of participation in budgeting (Dahl and Soss, 2014).
For instance, some studies have argued that participation is more of a threat to than anopportunity for the renewal of democracy (Nyamori et al., 2012; Hong, 2015). Recently,
Caperchione et al. (2014) have stated that citizens’ participation in the budgeting
process appears to have been a means of exonerating governments from inevitablebudget cuts. Interestingly, fewer studies have examined how the budgetary participation
process operates and interacts with the local context, and especially with cultural
conditions, which may provide deeper explanations for why NPM technologies such as
participation produce a variety of unanticipated consequences.i We seek to fill this gap
by drawing on a Japanese case of participatory budgeting in a local government.
The NPM reforms in Japan led to the delegation of more responsibility from
central to local levels for decisions on and provision of a range of public services (Kim,
2010). Recent cutbacks and ever-decreasing resources seem to have motivated local
governments in Japan to adopt NPM-style participatory budgeting in order to identify
and justify their activities. Two levels of participation have been attempted: politicalparticipation and the direct participation of citizens. Political participation has long beenin place through the direct election of mayors and assembly members. This has been2

further strengthened by the idea of direct participation, for instance by engaging citizens
in the selection of local priorities. In recent years, increasing numbers of Japanese local
governments have introduced measures to involve citizens in their budgeting processes,
as well as in making decisions on local affairs (Matsubara, 2013). The purpose of thispaper is to investigate the nature and extent of participation in the budgeting process of
X city council office, a Japanese local government frequently cited for championing
citizens’ participation in the budgeting process. We also examine how cultural
conditions interact with the idea of participation in budgeting.
The paper begins with a brief review of local government budgeting andparticipation. This is followed by an introduction to a theoretical framework presenting
the cultural conditions of Japanese society, and a description of the research methods
adopted. The empirical findings are presented and set in the context of the cultural
norms of Japanese society, and the paper finishes with some concluding remarks.

2. Participatory Budgeting in Local Government
Citizen participation in budgeting and policymaking are considered to be an
important means of strengthening civic skills, capacities and duties, thereby developing
a sense of community (Bryer, 2014; Michels, 2011; Musso et al., 2011; Neshkova,
2014). In Western democracies, the adoption of participatory budgeting has been linked
to political emancipation and the revitalisation of local democracy. It has beenenvisaged as a tool through which to articulate a deliberative or participative form of
democracy in which citizens have opportunities to engage in local authority decisionmaking processes and have a say on issues that impact directly on their wellbeing(Burns et al., 1994; Fung, 2006; Flinders and Dommett, 2013; Ariely, 2013; Tholen,
2015; Shah, 2007). This has also spread to non-Western countries (van Helden andUddin, 2016; Uddin et al., 2011; Kuruppu et al., 2016).
We observe at least two distinct streams of literature on participatory budgeting.
Many studies, conducted mainly in Europe and the USA and largely critical in nature,
have focused on its results and unintended consequences. Participatory budgeting has
played a role in many contexts in undermining the level of trust between politicians andcitizens (Michels and De Graaf, 2010). Im et al. (2014) state that citizens’ disassociationfrom participatory budgeting has become more extensive in some local government
units owing to the manner in which local politicians have deployed it to advance theirpersonal objectives and to create an element of political patronage rather than genuinely3to serve the citizens. Ebdon and Franklin (2006) have demonstrated the failure of many
US cities and local governments to elicit participation in the budgeting process. Despite
the adoption of various methods, including public meetings, focus groups, simulations,committees and surveys, attendance at budget meetings has remained low andunrepresentative and has suffered from groupthink (see e.g. Irvin and Stansbury, 2004).
In a similar vein, Wampler (2007) posits a lack of technical and analytical skills
amongst politicians and citizens as a key factor which has had unintended consequences
for the implementation of participatory budgeting. Domination of technical experts,
limiting the capacity of citizens to influence the budget, is evident in the extant
literature (Fung, 2006; Gusmano, 2013; Lowndes and Wilson, 2001; Lyon, 2000; Hong,2015; Musso et al., 2011; Célérierand Botey, 2015). Individual citizens have therefore
played a minimal role in the budgeting process, and vertical government decision
making has remained intact in many European local governments, despite the adoptionof participatory budgeting (Beckett and King, 2002; Michels and De Graaf, 2010).
Some researchers argue that, in many local government units, participatory budgetinghas become merely a consultative process and legitimacy tool, with no directconsequences for the final budget (Lapsley, 2008; Bräutigam, 2004; Adams, 2004).
Other studies on participatory budgeting have been more concerned with the lackof engagement of wider stakeholders in the process, especially citizens at large, citing
mainly material reasons such as economic austerity and lack of discretionary budgets. In
their study of a public university budgeting committee, Rossmann and Shanahan (2011)
argued that there was little room for adjustments to budget allocations, which madecitizens’ participation in the budgeting process a merely ceremonial event. Ahrens andFerry’s (2015) study examined the situation of Newcastle City Council, which was
subject to budget cuts of about 30 per cent of its uncommitted funds over three years.
The budget cuts forced the council to take a political decision to involve grassrootsgroups and citizens in the budgeting process as part of a strategy to mitigate the wrathof the citizenry and shift the blame to central government. Similar attempts to engage
citizens ceremonially in the budget process and engender consensus on local spending
cuts have been evident in other countries (see e.g. Almquist et al., 2013; Caperchione etal., 2014).
The studies presented above have concentrated on outcomes and lack ofengagement in the participation process, citing mainly material (economic) reasons.
Little attention has been paid in the literature to exploring how the process ofparticipatory budgeting interacts with cultural conditions and perhaps better explains thelack of citizens’ engagement in the participation process. The importance of cultural
conditions has been acknowledged in the literature. For instance, Irvin and Stansbury4

(2004) have argued that low and unrepresentative participation in the budget process
may be indicative of a local culture characterised by citizens’ undisputed acceptance ofdecisions undertaken by politicians. Flynn (1998) has argued that some cultures are
simply unused to the idea of participation, and therefore the process and outcomes ofparticipatory budgeting may be very different from initial expectations. In a similar vein,
Stigliz (2002) has stated that local politics, context and culture may be key determinants
in materialising NPM reforms, particularly participatory budgeting. None of the above
studies has examined how local cultural conditions interact with imported participatory
budgeting processes advocated by NPM ideals rooted in different cultural context. Thisis perhaps due to the fact that very few studies have been conducted on participatory
budgeting processes in local governments in non-Western contexts (van Helden andUddin, 2016; Uddin et al., 2011). The need for more culture- and context-specificstudies has long been identified in the public sector in order to clarify the processes,
consequences and outcomes of NPM reforms across countries (Broadbent and Guthrie,
2008; Guthrie et al., 1999; Hood, 1995). Studying the budgeting process in X city
council in Japan has provided an opportunity to examine the interactions between local
cultural conditions and the elements of NPM ideal-driven tools such as the participatory
budgeting approach.
Previous studies in Japan have questioned the applicability of NPM ideals to theJapanese public sector. For instance, Yamamoto (1999) has stated that Japanese local
culture has often been characterised by secrecy, with a lack of transparency in politicaldecision-making processes. It has therefore been claimed that NPM reforms and theirunderlying rhetoric, such as “value for money”, “improved performance andparticipation” and “transparency”, have had little impact on Japanese people and their
day-to-day routines (Yamamoto, 1999). However, fiscal stress and budget cuts havealtered the environment in the country, in that NPM measures such as participatory
budgeting have increasingly attracted the attention of local government units(Sintomeret al., 2012; Yoshida, 1990). Matsubara (2013) states that participatory
budgeting has now become one of the most widespread NPM reforms in Japanese local
governments. Very few studies have examined the suitability of Western technologies
to Japanese cultural conditions. In examining the extent of participation in the budgeting
process of X city council, which has been cited as a champion of participatory
budgeting, we shed light on the role that culture may play in shaping NPM tools such as
the participatory budgeting approach.

53. Vertical Society –the Japanese Way
This paper draws on Nakane’s (1970) work on Japanese society, which has soldmore than a million copies in Japan and has been translated into English with the title“Human Relationships in a Vertical Society”. Nakane’s (1970) main focus was tounderstand Japanese society by examining the Japanese “individual”, group formation,and relationships between group and individual and between groups. Cultural conditions
have obviously not remained static over the four decades since Nakane’s (1970) work
was written, and it has also been criticised by scholars as somewhat outdated and purely
structuralist. However, our focus is on some of the fundamental features of Japanesecultural traditions informed by the most recent Japanese literature. We do not claim that
culture fully explains how and why the Japanese do things but, as Nakane (1970)
claimed, it provides an understanding or angle from which to understand Japanesesociety (Curtis, 1999; Kim, 2010).

Nakane (1970) began with the two concepts of “frame” (“Ba” in Japanese) and“attribute” to capture how individuals see themselves in a group and in a society at large.
Frame indicates a location or belongingness, while attribute indicates profession or
position. Nakane argued that, for a Japanese individual, frame is important. Identifying
with a particular frame – a company, family or group –or, in other words, a collective isconsidered to be the primary means of introduction. Japanese people will often (thoughless so in modern times) introduce themselves to an outsider as “I am from B publishingGroup” or “I belong to S university”, rather than saying “I am a sales clerk” or “I am an
accountant”. Although the significance of the workplace as a frame has reduced due tothe economic downturns of the last thirty years, the primacy of group over individual isstill manifest in the everyday lives of the Japanese people (Benedict, 1988; Davis andIkeno, 2002; Yamamoto, 2013; Segers, 2008).
According to Nakane, social grouping in Japan is often constructed in terms of aparticular reference, usually on the basis of a frame of group members with differing
attributes. In order to sustain this kind of diverse group, coherence is crucial.
Theoretically, in Nakane’s view, this can be done in two ways: by influencing memberswith a feeling of oneness or unity, and/or by creating an internal structure which ties
individuals in the group to each other and thus strengthens the organisation. In practice,these two modes occur, are bound together and progress together. This is further
elaborated below.

6In order for members to have a feeling of oneness or unity with the group, people
with different attributes are led to feel that they are members of same groupconsciousness of “us”. There develops internally a sentimental tie between “members of
the same troop”. This emotional approach is facilitated by continual human contact of akind that may often intrude into the personal sphere. Although less frequent in moderndays, this characteristic used to be seen in businesses and public organisations withlifetime or long-term employment systems. Such relationships between employer andemployee cannot to be explained in contractual terms, but are recognised in terms of a
big family. The company/group buys not only labour hours but the total man, as shownin the expression marugakae, a Japanese style of management meaning literally “totalenveloped”. Although long-term employment in the private sector and seeing thecompany as a family has declined over the last three decades (Segers, 2008), theJapanese preference for “Ba” or latent group consciousness remains strong. Japaneseemotional investment in groups is manifested in the way they speak about their groups.
Oneness is frequently expressed – “our company”,” us” – in everyday private and publicconversations. As Nakane (1970, p.4) put it:… latent group consciousness in Japanese society is expressed in the traditional
and ubiquitous concept of ie, the household, a concept which penetrates every nook andcranny of Japanese society. The Japanese usage uchi-no referring to one’s workplaceindeed derives from the concept ie. The term ie has also implications beyond those to befound in the English words household or family.
Interestingly, Nakane argued that oneness is also strengthened by differentiating
the group from other groups/frames (“us” versus “them”). Hence, there is often fierce
rivalry and hostility towards other groups. Such hostilities are so intense that intergroup/-frame cooperation is often problematic. To explain this, Nakane (1970, p.102)
argued that “a Japanese group, the internal composition of which is heterogeneous, hasa character homogeneous with that of many other groups. Hence, there is no necessity
for positive relations with other groups; instead, relations tend to be hostile orcompetitive.” The entire society is composed of numerous competing but independentgroups. Nakane reflected on how the hostile nature of competing and self-containedgroups, whether political or civil society groups, contributed to the acceptance ofvertical state authority.
The internal structuring of the group is also very important for group coherence
and survival (Abegglen, 1958; Aoki, 1988; Suzuki, 2011):

7

A group where membership is based on the situational position of individuals
within a common frame tends to become a closed world. Inside of it, a sense of unity is
promoted by means of members’ total emotional participation, which further
strengthens group solidarity. In general, such groups share a common structure, aninternal organization by which the members are tied vertically into a delicately gradedorder (Nakane, 1970, p.39).
In a social group with different attributes, this tie will be based on vertical
relations. Vertical systems link two individuals who are different in quality, such as
parent and child, or superior and inferior. A vertical relationship emphasises differences
between members, or develops a very delicate and intricate system of ranking within it(Abegglen, 1958; Milgrom and Roberts, 1992). The most fundamental criterion isrelative age in the organisation, year of entry into the company or length of continuous
service; for example, among professors at the same college, rank may be assessed by theformal date of appointment. This sense of seniority in Japan is very important in any
formal or informal occasion (Mizutani 1995).
In vertical group formation, three categories of relationship are found to exist:
sempai (seniors), kohai (junors) and doryo (equal). These differentiations are clear andare expressed both publicly and privately, and this order is maintained, irrespective of
an individual’s status, qualifications, popularity or frame (Mizutani 1995). As Nakane
put it, “there is a deeply ingrained reluctance to change the established order. The
relative rankings are thus centered on an ego and everyone is placed in a relative locus
within the firmly established vertical system” (1970, p.28).
This vertical organisation, fixing the ranking of participants from its beginning, isreflected in various organisational literature (Yashiro, 2011). For example, the line
manager of a group has strong power drawn from the emotional confidence of asubordinate. It must be noted that this vertical relationship does not necessarily meanthat the leader or sempai would take the initiative. In fact, Japanese organisations havetraditionally had bottom-up decision-making systems that encourage subordinates totake initiatives within the comfort zone of the leader (Kitamura 2013). The strength ofhierarchical arrangements in Japan is such that no material indicators are needed toreinforce it (Curtis, 1999). For instance, communal eating, company uniforms and carparks without special areas reserved for management are common practices forJapanese corporations, in sharp contrast to corporations in the UK and USA. The leader
is also seen as someone who facilitates an environment in which kohhai juniors canwork effectively (Horie, 1990). In other words, maintaining “wa” (harmony) is an
important element of leadership. A lifelong emotional bond between kohhai and sempai

8is the most important element in maintaining the vertical structure. In Japanese society,the philosophy of each is defined by others or, more precisely,” I and somebody have arelationship or will have a relationship in the future” (Abe, 2005).
The Japanese word “seken” perhaps expresses more accurately the role of theindividual in the group, and indeed in Japanese society. Being in seken means that all
members of the group should act cohesively or “seken will purge individual differences
to impose Wa, oneness or unity without any debates and questions” (Kitamura 2013;
Abe, 2005). This needs no further justification, given the cultural conditions of theJapanese individual. Van Wolferen’s (1989) comment on Japanese political powerreflects this: “Japanese who disagree with the way in which the system works and whotranslate their discontent into political actions are considered subversive and looked
upon as potential bomb-throwers” (p.196). In summary, the primacy of group overindividual and frame over attributes, group rivalries, and a deeply embedded Japanese
consciousness of vertical relationships and oneness or wa have serious implications for
how an organisation works. It is therefore interesting to examine how notions such as“participation” are implicated in the everyday lives of Japanese organisations. We
examine these cultural conditions in relation to the workings of citizen and politicalparticipation in budgeting in the X case. Drawing on cultural perspectives to understandaccounting practices is not new (Gray, 1988; Ansari and Bell, 1991; Wickramasingheand Hopper, 2005; Efferin and Hopper, 2007; Bryer, 2014). The contribution of thispaper is to apply it in the context of NPM reforms. Theoretically, the paper
demonstrates the usefulness of culture in the engagement (or lack thereof) of citizen
participation in the budgeting process.

4. Research Methods
Conducting a social scientific inquiry in public sector organisations in traditionalsocieties is a challenge (Uddin and Choudhury, 2008). Although Japan is very
developed, being a very vertical society (seken) it offers different types of challenges,
especially in gaining access to interviewees. The professional connections of the firstauthor with a key contact in X University who had previously worked in the city council
provided us with the necessary access. In line with the theoretical orientations, our datacollection focused on identifying societal and cultural conditions as well as actors’interpretations and actions. One of the authors, a native Japanese, has been researching
local government for several years. Our data consist not only of interviews andconversations but also of personal observations and this author’s subjective experience.

9

Data for this case study were collected in 2014 over a span of one year, including
multiple visits to the city council and the collection of documents.
Important data sources for the identification of societal and cultural conditions
included a preliminary review of the historical literature on X council, as well as thebroader politico-economic historical literature, such as analytical commentaries on
Japan’s political and economic situation and on local government in general. The
review was conducted with specific reference to identifying the structural conditions
surrounding local government. As a next step, in order to develop a better understandingof the structural conditions faced by the key actors in X, we also collected news reports,
annual reports and official documents relating to X. These reports proved very usefulfor developing a general understanding of the conditions faced by local government
actors in general, and in X in particular.
Interviews were one of most important sources of data contributing to anunderstanding of local government budgeting practices. Two authors (one native
speaker) were involved in facilitating the interviews. Prior to the interviews, both
authors visited the research site and arranged appointments with the informants. In total,nine interviews were conducted with 18 interviewees. The interviews were conducted
mainly in Japanese, but translated immediately into English so that the non-Japanese
author could follow them. Most interviews lasted around 60 minutes and were digitally
recorded. They were conducted with key stakeholders, comprising one community
leader (user of local government services), one ward official, five assembly members,
ten local government officials, and one professor (retired from the city government,with experience in the budgetary department). A number of issues was discussed during
the interviews, including the nature of budgeting; the level of participation; the role ofdepartments, politicians (assembly members), community members and the generalpublic in influencing budget decisions; and the role of central government and civil
servants. After completing each interview, the authors discussed the interview data andreflected on the findings to prepare themselves for the next interview.
The second round of interviews at the local council was based on knowledge
acquired from the first round. Only one interview was held, with the deputy mayor. Our
attempt to interview the mayor was unsuccessful. The selection criteria for interviews
were based on the principle of theoretical sampling (Mason, 2002). According to thisprinciple, we chose respondents who were important for the theoretical insights that wewere trying to generate. In line with our theoretical aims, we were interested inunderstanding the participation of key actors in the budgeting process. Most interviews
took place in the workplace, while some, especially those with politicians, were held in

10

different locations, including one in a café. In all cases, we were allowed to record thewhole interview. We presented our initial findings at seminars held in Shizouka andEssex attended by Japanese local government researchers. These interviews were
further corroborated and complemented, especially by letters and reports published by
the X council, previous studies (in Japanese) and local government associations. In
addition to the interviews, one author attended an assembly meeting and watchedassembly meetings on YouTube.
Having collected the data, the next stage was an analysis of the interviews in two
forms: uncovering the structural conditions, and determining the key actors’
understanding of the practices. In this line of analysis, we developed themes that
captured the contextualised interpretations of agents and their actions (Mason, 2002).
Our main aim was to make sense of the participation of citizens and assembly membersin the budgeting process. Themes were developed to demonstrate the extent ofparticipation at each stage of the process. Our final analysis involved converting all data
relating to cultural conditions and agents’ actions into deeper and more meaningful
theoretical narratives. In order to do this, we drew on Nakane’s work on the verticalsociety and identified key themes to interpret the findings and agents’ interpretations ofbudgeting practices. As we interpreted our findings, we constantly reworked our themes
to capture deeper explanatory nuances of the data and to theorise the process ofparticipation in the budgeting process.

5. Governance and Reforms in Local Government
Local governance has been enshrined in the Japanese constitution since 1946,born out of Japan’s historical legacy. Local government units provide a wide range ofservices to citizens, covering virtually everything except diplomacy, defense, currency
and justice. This is reflected in the income and expenditure of local government units:
local government spends almost three fifths of the total tax revenues and employs three
million people. Japan’s local autonomy system has a two-tier system of local
government: prefectures and municipalities. ii These are further divided according togeographical conditions, population size and scope of local administrative services.
Prefectures are regional government units, and municipalities are basic local
government units. The population and area of prefectures and municipalities vary
greatly, iii yet the principle of uniformity is maintained in terms of similar power,
organisation, administrative operations and financial capabilities. National government

11

employs various financial tools, such as localisation tax, to maintain parity between
municipalities and prefectures.
Prefectures and municipalities are independent of each other. Nevertheless,prefectures provide some guidance to municipalities from a regional perspective whennecessary. Each type of unit has separate functions, but municipalities are more closely
connected with residents’ daily lives. The largest city within a municipality is often
formally designated by the national government, and its power and functions are often
similar to those of prefectures in core areas such as social welfare, public health andurban planning. Designated cities are further divided into administrative wards. X, ourcase study, is a formally designated city; hence, its functions are similar to those of aprefecture.
There are two branches at the heart of local government in Japan: legislative andexecutive. The legislative branch is composed of representatives from local
communities elected through adult suffrage, and makes decisions on the budget andlocal ordinances. Prefecture assemblies and municipal city councils fall under thisheading. They comprise the mayor or governor, plus assembly members, all of whomare directly elected by local residents for four years. The number of assembly members
depends on the size of the population. Matters to be decided by the assembly are set bylaws and ordinances, especially important among these being voting on the budget. The
other branch is the executive branch, which implements policies decided by thelegislative branch. The governors of prefectures/mayors of cities and the heads ofmunicipalities and special administrative committees/boards fall under this heading.
The administrative committee/board is expected to run its affairs independently, without
the intervention of other agencies and bodies. Committee members are appointed by themayor/governor for four years. The mayor is the head of both legislative and executive
branches, and has general control over all executive agencies involved in preparationand implementation of the budget. The mayor/governor has the power of veto over the
local assembly/city council, mirroring the powers of the US presidency. Nevertheless,the chief executive may be dislodged from power if the required number of citizens
submits a petition, or if two-thirds of the assembly members carry a no-confidence vote.

12

6. X Case
6.1 Overview
X is a typical industrial city in Japan. In 1900, the newly Westernised Meiji
government established X as an “iron city”. Since then, X has grown economically andin population. The local government reforms in Japan have significantly shaped X
council since 1990. Long before the reforms, since 1970, the economy of X has been
gradually shrinking. In the context of overall economic decline of Japan, the central
government began to delegate administrative burden to local government without
sufficient funding (Tanaka, 2010). X, like other councils, had to take series of initiatives
driven by NPM ideals such as ‘prioritization of efficiency’, ‘client-based orientation’,‘emphasis on results’, to reduce costs and meet the challenges of service delivery to
local citizens (Tanaka, 2010). Thus, reduction in staff numbers and outsourcing local
council tasks such as garbage collections, transports etc have been common themes
during the last two decades in X and other councils. In this context, direct citizen
participation agenda was adopted in 2008 in X. In X, the economic decline is further
compounded by steady increase of elderly population. For instance, 25.1 per cent of the
population was elderly in 2010 and this is predicted to grow to more than 30.0 per centby 2020, so social welfare costs have been rising, making a strong dent in the city
council’s finances. Annual cuts are a common phenomenon for city council officials.
Table 1 depicts the council’s budgets for the three years from 2011 to 2013.
Table 1 X revenue budget for 2011 to 2013 financial years

Unconditional revenues
Locally raised
National grants
Prefecture grants
Conditional revenues
Locally raised
National grants
Prefecture grants
Total

2013
1,000JPY
278,868,408
200,187,639
56,473,462
22,207,308
233,359,820
122,572,387
91,118,624
19,668,809
512,228,229

%
54.4
39.1
11.0
4.3
45.6
23.9
17.8
3.8
100.0

2012
1,000JPY
284,884,855
203,059,556
60,064,649
21,760,650
241,941,918
136,873,043
85,843,707
19,225,168
526,826,773

%
54.1
38.5
11.4
4.1
45.9
26.0
16.3
3.6
100.0

2011
1,000JPY
286,988,330
203,981,586
61,823,800
21,182,944
236,011,073
130,319,892
85,906,002
19,785,179
522,999,403

%
54.9
39.0
11.8
4.1
45.1
24.9
16.4
3.8
100.0

It is clear from the table that revenue is decreasing, and that almost 55 per cent of
the total budget is under the local government’s discretionary power. Further scrutiny
reveals that half of the so-called unconditional revenues are in fact committed to fixed13

costs such as personnel, public assistance and the cost of public debt. In theory, theremainder is not fixed and may be influenced by assembly members, as citizen andpolitical representatives. As explained earlier, the mayor is the key power holder,directly elected by the population. Sharing the mayor’s spending power through direct
engagement with citizens and assembly members has increasingly been considered to beimportant in the Japanese local government context, and NPM-driven budgeting seems
to provide a ready-made solution.
The budget cycle comprises six distinct steps. First, the cycle begins in midOctober with an announcement by the mayor and setting out the budget principles.
Second, local government departments prepare their departmental budgets and send
them to the budget desk by late October following the announcements. Third, by lateNovember, the budgetary division compiles the budgets and opens them up to citizens
for comments. Fourth, in early January, the budgetary division begins to assess andrevise the budgets to be approved by the mayor by the end of January. Fifth, the mayor
provides feedback directly to citizens in mid-February and puts the budget to theassembly. Sixth, assembly members deliberate on the budget and officially approve it
by mid-March. With reference to the actual budget cycle for the year 2013-14 in X,
these phases were examined and discussed in relation to direct citizen and politicalparticipation in three important stages of budgeting, as detailed in the following subsections.
6.2 Budgetary Proposals: Vertical Negotiation
The principles of the annual budget result from the functioning of a three-tierplanning system: strategic plan, master plan and implementation plans. The strategicplan dictates a general framework and guidelines for the next ten years. The master plan
specifies the objectives and projects to be undertaken in order to realise the strategicplan. X council claims that both are the result of wider public consultation.
Implementation plans are detailed budgetary documents covering 10 years, reflecting
the master plan. The annual budget is part of an implementation plan. The present
research did not examine the participatory process of the long-term plans, butinterviewed key people to understand the process of the annual budget.
The principles set for annual budgets reflect the implementation plans. These
principles are mainly the remit of the mayor, who has overall authority to prioritise or
ignore specific policies or projects. The mayor does not undertake any active
consultation before setting out the principles each year. The budget desk, headed by the14

deputy mayor, circulates the budget policy document at the behest of the mayor. The
main task of departments is to comply with the policy and propose a budget.
One of the most important aspects of the annual budget policy document,
particularly in recent years, is the cost-cutting agenda. Commenting on the cost-cutting
policy, an executive director/senior staff member on the budget desk of the budget
division stated: “The policy of budget proposal is that each bureau should compile its
budget within its discretionary budget. We propose a decrease to such discretionary
budgets every year. So in this 2015 budget, we have proposed a four per cent reductionin the discretionary budget.” The budget desk does not anticipate much resistance to its
cost-cutting announcements, which it sees as a reality. The practice is to send a letter toeach department detailing the percentage to be cut, together with the rules and principlesof the budget, at the beginning of the budget cycle. A senior official from the budget
desk commented: “Basically, every budget proposal is within the budget policy set by
the mayor. However, we discuss with them the timing, the ingenuity of the service offer,and the cost of service (compared with other designated cities).”
It appears that departments have no option but to comply with the cost-cutting
rate. Departmental heads must make a case if the specific rate is not to be achieved.
Commenting on budget cuts, an officer from the public health and welfare bureau of thegeneral affairs department, stated: “We compile the budget being aware that there will
be a cut from the budget desk.” Departments take various steps to meet the budget cuts,
for instance by reducing their activities, personnel costs and administrative costs,
providing reduced services in certain areas, and seeking cheaper delivery alternatives.
An accountant at the Public Health and Welfare Bureau shared his experience offacilitating negotiations with local associations of the elderly:
We make the arguments to re-adjust current projects with a view to reducing theexpense. For example, we seek to deliver the services in a cheaper way. For example,
we have reduced the celebratory money allocated to elderly people to ease the pressure
on our budget. We have also squeezed five per cent of their budget allocated forbusiness trips and purchases.
It is interesting to see how budgets cuts are handed down to departments. The
budget desk confirmed to us that there are some negotiations but little resistance fromdepartments because they know this has to be done. Vertical social order is clearlyreflected in how negotiations are handled in cases of disagreement with the cuts or any
other matters. One official from the budget desk said: “We negotiate this with the
managers, directors and even the chief executive of each department and ask them to15adhere to the budget policy. If a compromise is not reached, it goes up to the deputy
mayor in charge of the budget desk.” Negotiations between departments and the budget
desk are of a top-down nature. Negotiation begins at managerial level and, if unresolved,
goes up to director level, followed by head of department level. Ultimately, the deputy
mayor’s decision is final. Although there may be some discomfort within departments,
promoting oneness and maintaining “wa”is much more important (Nakane, 1970; Abe,2005). The deputy mayor, being senior to the heads of departments, perhaps also
facilitates the process of acceptance.
One of the most important jobs for the budget desk is dealing with proposals fromdepartments. The budget desk often decreases or increases the allocation of costs to line
items. A key official on the budget desk said:
In 2014, students in primary and junior high schools achieved a lower
performance against national standards. This is an important agenda for the city andmayor. Under these circumstances, the Board of Education made a budgetary proposal
for supplementary after-school classes in about ten schools. To respond to the mayor’s
wish, the budget desk proposed that the Board of Education should double the monetary
value of the project in the assessment process and obtained the mayor’s approval.
Budget desks frequently reject departmental proposals, but it was extremely
difficult to discern from the documentation why this should be so. Very few
explanations were provided. Our departmental interviewees suggested that it was
ultimately for the budget desk to decide, depending on its priorities. Nevertheless, thedocuments did not provide any detailed explanations or rationales for increasing or
decreasing the budget limits. There was little in the public domain to capture differences
between proposals and approved budgets.
In preparing the annual budgets, especially to include new capital or revenue
items, departments give the utmost importance to mayoral election promises. This wasreflected in our conversations not only with the budget desks, but also with otherdepartments. As one official commented:
Especially in an election year like this year [2015], the mayor agrees manifestos
with supporters and locals regarding the next budget. This is not in the final round of
the budget as I mentioned above but, in the budget proposal, every department checks
the mayor’s manifesto and prepares the budget accordingly.

16

The budget desk has overall responsibility for mayoral statements/promises.
Evidence was provided by the executive director/senior staff on the budget desk of thebudget division:
We assess 3,000 proposals every year. About 100 of these 3,000 proposals arechecked by the mayor. In selecting the proposals, we want to show the strategic field or
the area of focus in this budget for the mayor. These projects are flagged by the mayor
in the public announcement of the budget.
It is understandable that the budget desk would reflect on the mayoral statement.
Economic concerns play a key role here in selecting proposals. However, without
denying the importance of material concerns, it is interesting to observe the financeoffice’s keen interest in reflecting mayoral statements. For instance, in response to ourquestion of whether the mayor asks them to pursue specific projects and proposals, thefinance officer responded: “He does not need to tell us. We know what he wants and wemust be prepared for this.” Here, direct influence is unnecessary; as Nakane (1970) put
it, “junior must know what senior wants and work accordingly”. The vertical
relationship does not require undue direct intervention. As argued earlier, Japaneseorganisations promote bottom-up decision systems that encourage subordinates to takeinitiatives within the comfort zone of the senior/leader.

6.3 Citizen Participation: Individual and GroupThe budget desk compiles budget proposals from departments and opens them up
for citizens’ comments. Citizens have opportunities to be involved with the budget attwo stages: before the departments send the proposal to the budget desk, and after thecompilation of budgets by the budget desk. Citizens are contacted by departments
through groups and associations in various forums before the budget proposals are sent
to the budget desk. These long-established but informal connections between local
communities and local government units were operating well before the NPM-driven
formal participation began to appear in Japan. Departmental officials also commented
on contacting citizens directly to assess their needs. A director of the general affairs
division of the construction department/bureau mentioned:
Our budget proposal is based on the master plan and the implementation plan of
the budget. We then modify it by incorporating the citizens’ opinions and the annual
budget policy. Based on the needs of citizens, the goal of the city and the city plan, our17budget is re-adjusted. We are close to the citizens in several ways and communicate
with them through comment letters, directly responding to them in public lectures, andorganising meetings with them.
These contacts with citizens are not well publicised but are conducted mainly
through various associations.ivCommenting on the participation of associations in thebudgeting process, a chairman of the federal association stated: “The city andassociations have maintained an intimate relationship. We have frequent meetings withthe city and the departments and sometimes we are asked about our needs andproposals.” Maintenance of contacts with local communities and visits by community
leaders to council offices are very well-established though informal in nature. This isalso reflected in the way assembly members attempt to shape budget proposals, as will
be explained later in this paper.
NPM-driven and well-publicised formal citizen participation in the budgeting
process begins when the budget desk opens the total budgets for citizens’ opinions in
end of November. We found that a summary of budget proposals from all departments
was made available on the city’s websites, at the city’s central office and in ward offices.
These budget proposals referred to monetary amounts, agendas, policies and major
initiatives in the departments. Citizens were able to submit their opinions by e-mail,postal mail or fax, or bring them directly to the city council or ward office, giving theirname and address. Citizens’ opinions were taken into account formally in the budgetaryassessment process between the budget desk, the mayor and departments. We sought todetermine the interactions of citizens with the budgets. In the 2014 financial year, out of
a population of more than a million in Kitakyshu city, only 71 people submitted 167
opinions. Interestingly, a document was prepared by the budget desk to discuss how
these opinions had been considered:
The numbers in the budget reflect 167 opinions. On the other hand, 39 opinions
are not reflected in the current budget. Forty-one opinions with no relation tobudgetary concerns were excluded, and the opinions received reflected 69.0 per cent of
the 2014 budget.
However, our interview with the finance director of the budgetary division wasquite revealing. His candid reply to our question on participation was:This citizen participation is simply a distraction and meaningless. Budgets are
made up of a master plan, an implementation plan, debates in assembly, and daily18

negotiations between related organizations. Honestly speaking, it is hard for lay people
to understand. It is a professional task. In a recent public comment procedure for anational identity number system, we received only one comment. Compared with others,
ours are better.
The above quotation indicates that citizens’ opinions at this stage change nothing.
Also, budget officials have very little time to consider them properly due to timepressures. At the same time, economic reasons were mentioned for non-engagementwith citizens. An executive of the budget division stated:
In our city of X, our own budgetary sources are less than 50 per cent and most of
the budget is already allocated to fixed sources. We can change fees for public services
but do not make dramatic changes. If we start changing something, we then need to stopother things.
Participation has become a tool to attract citizen’s interest and legitimise thebudget, rather than triggering any changes (Bräutigam, 2004; Adams, 2004; Ahrens andFerry, 2015; Caperchione et al., 2014). This was evident in the following statement of asenior staff member of the budget desk: “These public comment procedures areintended to attract citizens’ interest, not change the budget, so we handle them withmuch care and answer them very carefully.” Nevertheless, it was acknowledged thatcitizens’ comments might signal the extent to which citizens agreed or disagreed withthe budgets. The budget division had therefore pursued a policy of encouraging citizens
to express their responses relating to budgetary issues, despite the fact that such voices
had hardly been heard. A senior staff member of the budget division stated: “We shouldhave simpler procedures to encourage citizens to provide responses. I do not want todecrease the numbers of responses. Some citizens have provided us with more than tencomments.” He also said that disclosure of an as yet undecided budget might heighten
public concerns about the budget itself. If citizens saw a budget proposal and could
recognise a finely balanced budget, they might take more interest in the policy-making
process and become active citizens in the city.
6.4 Political Participation: Maintaining Oneness or “Wa”
The assembly and its members are vehicles for political participation and aresupposed to work with the city council and the mayor to enhance participation andmaintain checks and balances. There are 61 assembly members who work full-time forthe assembly, selected from six wards for a term of four years. Assembly members take19

part in all six permanent committees and are supposed to work closely with thedepartment.vThe local assembly process comprises three steps in X.vi First, at a general
meeting, the mayor explains his propositions in terms of budget bills, closing bills andother ordinances, and assembly members discuss the mayor’s propositions in the six
permanent committees. Second, three special committees consisting of pairs of thepermanent committees deliberate on the budget and closing bills. Third, based on the
deliberations, the assembly decides whether or not to approve the bills in the general
meeting. We sought to establish to what extent the assembly and assembly members
influence budgetary documents, provide checks and balances to mayoral power andensure the accountability of city council offices.
Our interviews with assembly members and others revealed that they find it
extremely difficult to debate and make a difference to the proposed budget during theassembly or any formal meetings. Legally, the assembly and the mayor/city council
office should stand on an equal footing and the assembly is recognised as a guardian orwitness, but reality suggests otherwise. The chair of the assembly remarked: “It isdifficult for assembly members and the assembly to be involved in the budget.” To
counter the argument regarding the powerlessness of assembly members, the chair
replied: “It is not weak, but the Japanese way of problem solving. In our tradition, we
do not want to fight, nor do we like confrontation.” The chair explained: “In Japaneseautonomy law, it is rare for the assembly to change the mayor’s budget bill. But it ispossible to change. The right to compile the budget is with the mayor. If we change thebudget bill, it invades his right to compile!” Changes to budgets by the assembly are
rare. All budget and financial closing bills are passed unchanged every year. The same
respondent recalled just one occasion on which the assembly had changed a single
capital budget item.
There are also pressures on assembly members not to delay the budget approval
process. Some assembly members argued that proposing an amendment to the budget
would not only protract the discussions but would also lead to uncertainty in its
execution. This would have a negative impact on service delivery and the promotion of
citizens’ welfare. Although some assembly members during their first year wereapparently more participative in the budget process, their enthusiasm petered out as theygained more experience of being an assembly member. One assembly member
remarked:
In my first year as an assembly member, I attempted to discharge myaccountability to the citizens. I made two speeches demonstrating weaknesses in the20budget and expressed my views and dissatisfactions. The chairperson tried to stop me.
The convention is that only the positive side of the budget should be mentioned during
approval meetings and speeches.
There is evidence that on several occasions the assembly had approved the budget
despite envisaging the failure of certain projects incorporated within it.viiOnly membersof the communist party tend to argue against the budget. We were told during ourinterviews that 52 out of 61 assembly members, excluding members of the communist
party, had voted in favour of the budget in 2014. Budget disapproval by the assembly isalmost non-existent and there is no evidence of such rejection except in one case in
2011.
More interestingly, assembly members are involved in discussions of the budget
within their parties and groups. During such discussions, concerns are often raised about
the inadequacy of the mayor’s policies and the way welfare expenses are allocated in
the budget. However, such voices are seldom heard during the assembly’s budget
meetings. Instead, the members submit proposals to the mayor who, in turn, decides
whether or not to incorporate them into the budget. One member stated:
In our political group, we talk about the shortfalls of the mayor’s policies. I do
not agree with many of the policies, but I have to follow the group decision and accept
them. For this reason, I have stopped joining the political group.
The assembly’s role is to provide feedback on improvements to the next budget,
rather than to reject the proposed budget. Assembly members commented that, before
the budget meeting, every political party invites city executives to a question andanswer meeting, and within the political parties they have study meetings on important
policies. Nevertheless, the evidence suggests overwhelmingly that the mayor and thecity council office are in full control of the budget. Political groupings and vertical
relationships within the political parties (Nakane, 1970) often make it impossible forpoliticians (in our case, assembly members) to raise fundamental issues with regard to
the budget. This was reflected in our conversations with assembly members.
Political parties often attempt to shape the budget less publicly. The assembly isseen as a formality rather than a debating house. One member said:
We submit the party proposal for the budget to the mayor. Then we check thedegree of adoption of the budget proposal from our party. I personally approach thedepartment and lobby the department to accept my proposal into the budget. In addition
to a petition as a formal direct proposal, I set up a meeting with a department and an21

interest group to facilitate acceptance into the budget. In terms of my results, I haveachieved expansion of financial help for the mentally handicapped, and a subsidy forthe junior high night school.
Assembly members and chairmen also find themselves negotiating with top city
council officials in different departments, rather than with the mayor himself. The
chairman of the assembly commented:
I had proposed a plan to construct a multi-purpose stadium in Wakamatsu, which
could also be used to organise national competitions. This development would have apositive impact on local businesses and the community. I proposed it to the budget desk
and it was rejected. I started talking about it with the chief executives of different
bureaus, including the financial bureau, the mayor and heads of different sports
associations, whenever I had the opportunity to meet them. Altogether it took me ten
years to get this project approved. However, the credit now goes to the mayor.
Similarly, on behalf of the political party that they represent, they negotiate withthe mayor’s party rather than the mayor, and indirectly persuade the latter to consider
their budget proposals in exchange for political or election support. One member
clarified the negotiation process:Besides the individual proposals which are based on citizens’ demands, our party,
the Liberal Democratic Party, sends a formal proposal document on much broader
issues relating to the mayor’s plans and policies for X to facilitate political negotiations.
The mayor has accepted our election support.
There is no guarantee that such institutional proposals will receive the mayor’s
approval. The political groups accept the mayor’s decisions but keep on pushing theirparty’s proposals for the next year. This acceptance of mayoral power can perhaps be
explained by Nakane’s reflections on how state power is organised in the context ofhostile political groupings:
Once the state’s administrative authority is accepted, it can be transmitted
without obstruction down the vertical line of a group’s internal organisation. In thisway the administrative web is woven more thoroughly into Japanese society thanperhaps any other in the world (Nakane, 1970, p.102).

22

Knowing that it is difficult to influence the budget through the assembly,
assembly members often work in lobby groups and visit the city council office prior to
the budget proposals. One assembly member commented that they go to city council
offices with proposals for inclusion in the budget. These proposals reflect local
constituents’ wishes, but are pursued informally rather than through structured
interactions between the departments and other stakeholders. Assembly members act
more as lobbyists, rather than having close involvement with each department in
preparing budget proposals. This lack of formal participation by assembly members insetting budgets was also reflected in our conversations with officials at the city council
office. The mayor is officially the most powerful actor, but his workload precludes himfrom considering all proposals. It is not unusual for the mayor to depend on city council
offices, especially the budget desk, but the scope for politicians to share the mayor’s
workload or participate in the budgeting process is glaringly absent in the Japanese case.
Despite mentioning some regulatory loopholes, assembly members argued thatthey find it difficult to raise any substantial issues in public or in assembly because “thisis not the Japanese way”. This is not only because the mayor has full political support
from the leaders of other political parties, but also because assembly members find it
difficult to gainsay the political arrangements, especially against their own politicalgroup. This may be true to some extent in every cultural context, but the extent to which
resentment or differences are shown here is particularly low. Fear of being a disruptive
individual within the Japanese “seken”, or fear of being purged from the “seken”,
contributes to their inability to raise concerns publicly (Kitamura 2013; Abe, 2005).
The poor participation of assembly members was also visible in the proceedingsof the assembly itself. One of the authors attended an assembly meeting and watched
YouTube videos of many assembly meetings. Participants simply articulated their needto spend more, and failed to question budget items or raise fundamental questions. One
assembly member commented that there are also regulatory restrictions in place toinhibit true engagement. For instance, the budget bill has to be voted with a blanket “yes”
or “no”, with no opportunity for partial agreement or disagreement with budget items.
As the fieldwork revealed, there is also no opportunity for members to scrutinise
individual items, as most members follow the party line and find it uncomfortable to go
against the party to disagree publicly with bills.
The internal organisational structure of the political parties, the primacy of groups
over individuals, and the maintenance of oneness inhibit assembly members fromlaunching any strong resistance to the budgets. One of our interviews with an assembly
member, who was only a representative from her party to the assembly, was free to raiseissues but found no support. Although other assembly members privately supported her,23

publicly they remained silent. She understood the predicament that these assembly
members face when it comes to raising issues not supported by the party. Lack ofpolitical participation through the assembly is understandable if we see it in terms ofNakane’s understanding of Japanese society. The mayor is seen as the leader, and publicdisagreement in the assembly is not seen as good practice. In contrast, it is much easier
to maintain oneness and vertical relationships by influencing the mayor’s budget
through council offices. Most assembly members are keen to maintain the politicalgroup’s position, and strong group consciousness plays a pivotal role. There is no needfor the whipping system of Western democracy. Members of a political group almost
inevitably go along with the political position unless they resign from political parties.
The impossibility of raising issues close to their hearts leads them to lobbying council
offices before the budget proposal to the assembly.

7. Concluding Remarks
This research has investigated a local government budgeting process in Japan. In
comparison with Western counterparts, we found that Japanese local governments aremuch more decentralised in terms of the power and resources given to them by central
government. However, economic crises in Japan have pushed central government todelegate more and more activities to local government with little additional funding, andto demand reforms such as participatory budgeting in local governments (Sintomer et al.,2012; Yoshida, 1990; Matsubara, 2013). As our data reveal, reforms such as the direct
participation of citizens have met with questionable success. Interestingly, traditional
means of citizen involvement through local communities and assembly members havecontinued. Most publicised citizen participation is characterised as a distraction and “toolittle, too late”. The budget desk and departments remain the most powerful actors in thebudgeting process. We found that the mayor is the central figure but has limited time tointervene directly in the budget. Political participation through the assembly is almost
non-existent, and that the assembly members work as lobbyists rather than being part ofthe process. The assembly works as an official rubber stamp rather than presenting acounter-power to the mayor. Participation does occur in some senses, albeit throughlobby groups rather than through channels prescribed by NPM tools, such as direct
individual participation or assembly debates propagated by individual assembly
members.

24

We sought to understand how NPM-driven participation agendas interact with theJapanese way of doing things and why they have not produced the anticipated results.
We argue that Nakane’s claims about vertical relationships in groups/organisations,maintaining or performing “wa” or oneness in the group, and the primacy of groups
over individuals are useful in shedding light on low public participation. We
acknowledge that the deeper subjective experiences of individuals are missing from theabstract cultural norms and values described above; nevertheless, they are still powerfulin providing some understanding of the Japanese way of doing things. The dominanceof the mayor (as superior) and his office (the budget desk), the nature of negotiations
between departments and finance office, the lack of explanations by the budget desk forknocking back departmental requests, and taking care of mayoral promises require
explanations beyond simply economic ones. For instance, negotiations following
hierarchy are an interesting example of superior (sempai) versus junior (kohai).
Subordinates of the mayor and his offices working for the mayor and trying to take on
projects anticipating his wishes also reveal a classic case of vertical relationships – aform of internal organisational structure within the groups. The importance of
maintaining social order through “wa”or oneness is reflected in the monologues ofassembly meetings (Nakane, 1970). Traditional engagements between departments andcitizens are much more effective and still continue, even though public comments
through websites are encouraged. Traditional engagements by departments with local
leaders and associations allow for vertical relationships and group characteristics.
Leaders going to departments to raise their concerns or lobby for a particular group fitswith the group behaviour of Japanese society.
This paper contributes to the accounting literature in several ways. First, the paper
provides deeper explanations of a lack of citizen engagement with NPM-driven reforms
generally, and in Japan in particular. Without denying the impact of economic crises,
regulatory loopholes and institutional contexts, the paper argues that local cultural
norms do not match the conditions required for wider citizen or political participation in
the assembly. Debates in the assembly are few and far between: as the interviewees
commented, this is not the Japanese way of doing things. Instead, departments’
engagements with local associations and community leaders, and assembly members
lobbying away from the wider public eye are consistent with local cultural conditions.
Second, in the process of engaging with the empirics of our case study and withJapanese cultural and political conditions, this paper offers a critique of unquestioning
assumptions about the transfer of accounting technology from one context to another. In
addressing political and cultural conditions, our case study problematises such linear
transfers of knowledge. It might be argued that, in Japan, material conditions

25

necessitating reforms should be similar to Asian nations. However, cultural conditions
influencing accounting technologies are unique, not just to each country, but also toindividual organisations within a single country (Guthrie et al., 1999; Pollitt andBouckaert, 2011). Appreciation of these unique cultural conditions is a key to better
understanding and theorisation of NPM-driven accounting reforms.
Third, the paper contributes to the wider debate on NPM and structuraladjustment programmes. Previous studies in Japan have questioned the applicability of
NPM ideals to the Japanese public sector (Yamamoto, 1999); yet, participatory
budgeting has now become one of the most widespread NPM reforms in Japanese local
governments (Matsubara, 2013). This paper suggests caution should be exercised in thewholesale adoption of such programmes. Previous studies within the critical tradition
have questioned the consequences and outcomes of NPM in Asian countries. In many ofthese cases, NPM reforms have been brought about to meet the private-sector ideals of
cost management and have been championed by private-sector change agents (Ashraf
and Uddin, 2013). NPM researchers have already highlighted such risks, warning that,
unlike Western countries, Asian countries often do not have the necessary structural
conditions for participation to be effective. Clearly, participation takes different shapes
and forms and did not materialise as expected through NPM channels in our case. The
side-lining of assembly members, the centralised power of the mayor, citizens’ apparent
disengagement with the participation effort, and city officials’ default power inevitablyraise questions about the success of the participation project.
Finally, despite the issue of economy versus effectiveness at the heart of the NPM
debate, the extant local government management accounting literature has not addressedin sufficient detail the role of budgetary participation efforts in different culturalcontexts. It would be useful to articulate cross-national comparisons so as to examinecontextual differences in NPM reforms and the unquestioned transfer of accounting
knowledge (see also Broadbent and Guthrie, 2008; Caperchione and Lapsley, 2011;
Guthrie et al., 1999).Cross-country research on budgetary participation should perhaps
be encouraged so as shed further light on the narrowness of public sector reforms
around the world.

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i

We do not wish to ignore the obvious impact of material conditions such as economic crises on
local government budgeting, but understanding how these are culturally mediated has not been well
examined.
ii
In addition to prefectures and municipalities (ordinary local government units), there are fourtypes of special local public bodies: special wards, local public cooperatives, property wards and local
development corporations.
iii
There are 47 prefectures of various sizes, a number that has remained unchanged since theintroduction of the modern system of local autonomy in 1888.There is great variation among the 1,788
municipalities in Japan.
iv
In Japan, each region has organised, voluntary neighborhood associations targeting certain
groups and professions in the community, such as children, elderly and disabled groups. There are also
federal associations coordinating and representing all associations in a particular district. For instance, thefederal neighborhood association in the Kokura-Kita ward consists of 25 neighborhood associations. A
federal chairman is elected for two years from amongst the 25 chairmen of the neighborhood associations.
The associations collect fees from the residents and are involved in activities such as protecting members
from crime, disasters and pollution, amongst other issues.
v
General affairs and financial committee (10 members), city planning and extinguishing firecommittee (10 members), environment and construction committee (10 members), welfare and hospitalcommittee (11 members), education and water operation committee (10 members), and economy andharbour committee (10 members). The local government covers a variety of activities, as reflected in thenames of the committees.
vi
Their meetings are held in February/March, June, September and December. The budget isdeliberated on in February/March, and financial closing is in September. Each permanent committee
discusses specific policy matters for 20 days per year. With regard to budgeting and closing, pairs of thesix committees combine into one group for discussion. These three special committees discuss the budget
and financial closing separately for seven days as follows: (1) special committee consisting of the generalaffairs and financial committee, and the city planning and extinguishing fire committee; (2) special
committee consisting of the environment and construction committee, and the welfare and hospitalcommittee; (3) special committee consisting of the education and water operation committee, and theeconomy and harbour committee.
vii
Illustrating the failure, the chairperson of the assembly stated that, for instance, the “Comcity”
redevelopment of the Kurosaki station building, in the western part of X, had been one of the biggest
failures of the city. The assembly had pointed out the potential failure of this project at the outset. There
were discussions about this project among the members, but not in a formal budget setting. During thebudget and committee meetings, few members talked about the project.

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