Chapter 14: Government or Governance?: Japan’s New Balance Sheet In International Perspective

The latter half of the 20th century saw governments face mounting financial pressures, administrative overload, and declining public confidence in the institutions of democracy. While these factors have stimulated innovations in public management and accounting in many countries, the environmental conditions for governmental innovation in Japan were, for a long time, unfavourable (Lüder, 1994). As recently as 1998 Kokubu et al. described Japan as a “runner a lap behind” in New Public Financial Management. Since then, however, the fiscal position of the Japanese central government has become the worst in the developed world while political scandal has heightened citizen demands for accountability and transparency. In response, two major initiatives have been undertaken: the formation of semi-autonomous public organizations called Independent Administrative Institutions (Yamamoto, 2000) and the development of a balance sheet for the whole of government.