［January 2015］
Local Public Corporations

Japanese local governments deliver services such as water supply, public transportation and sewage by establishing “local public corporations.”

You can imagine Sydney Water Corporation and Transport for NSW as their counterparts.

Although local public corporations are part of local governments’ structure, their operations are set apart from ordinary local governments’ operations because of their unique status as corporations and their emphasis on efficient and streamlined management.

Local public corporations are run by corporate managers who are the equivalent of CEOs of private companies, and they have to make financial statements based on corporate accounting principles. While Japanese local governments are usually funded by taxpayers’ money, local public corporations charge fees to users of their services, and the income from these fees mostly cover their operational costs.

In recent years, as it has become increasingly important for Japanese local governments to establish efficient financial management systems, local public corporations have also been required to adopt more strict private sector principles.