Wednesday, October 31, 2012

I Have a Friend in Ohio Who Has Taken a Little Time off to Ask What’s Going on with the Noda Administration

And here’s my answer to one of his points, edits in parentheses.

[The story on the diversion of post-disaster aid funds] has been generating headlines intermittently and has surely been another drain on the Noda administration's credibility. Much of the delay, reported well before the Auditing Agency report came out (which may be the reason why it did not receive front page treatment), can be attributed to local causeslack of planning and execution capacity at the prefectural and municipal level and/or consensus at the community levelthough, which limits fallout on the national government. The diversion story is of somewhat more recent origin, weeks if not months old. Some of the items will be excusable as top-priority disaster prevention regardless of location, but the items identified as inappropriately connected to the disaster areas do appear to be stretch credibility. The bureaucracy, tasked to come up with the budget items to bring the total up to a politically desirable level, will use [three] tricks of the trade to that end.
1.      Request funds for items that would normally be part of the regular annual requests.
2.      Dump money into a fund, which will be spent over multiple fiscal years. (Supplemental budgets must in principle be spent within the fiscal year.)
3.      Relabel budget items to give them descriptions that fit the theme(s) of the supplemental budget. (This has been used extensively in the regular budget, where some expenditure categories (ex. energy, small and medium) have a higher ceiling than the overall ceiling.)
There are legitimate arguments to be made for all three practices, but they depend on the specific circumstances, and the political optics and the risk of abuse are always present. Of course the political teams in the ministries and agencies should be keeping an eye on those things so that they don't produce embarrassments down the line, but that's difficult to do when the prime minister, the cabinet ministers and vice ministers and parliamentary secretaries keep coming in through revolving doors, and unprepared for the for their mandates for the most part to boot.*

* Am I being a little too understanding with the bureaucracy? You be the judge.

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