Japanese fiscal system places a high premium on tax and expenditure harmonization and on the control by higher level governments. Over the past decades, Japan has developed a robust system of decentralized fiscal system. The fiscal system has both positive and negative experiences and lessons for the rest of the world.

This report focuses on the cooperative manner in which revenue decentralization has occurred and the way in which intergovernmental transfers have been structured. It also addresses issues such as dealing with soft budget constraints and establishing true accountability of local government to their constituency. Against these background, recent reform initiatives, trinity reform and mass amalgamation, try to address the negative side of Japan’s intergovernmental fiscal relations.

Other titles in Global Urban Economic dialogue series:

• Community Land Trusts 2012
• Economic Development and Housing Markets in Hong Kong and Singapore 2011
• Economic Role of Cities 2011
• Fiscal Decentralisation in Philippines 2011
• Fiscal Decentralisation in Japan 2012
• Gender and Economic Development 2011
• Impact of Global Financial Crisis on Housing Finance 2011
• Infrastructure for Poverty Reduction and Economic Development in Africa 2011
• Microfinance, Poverty Reduction and Millennium Development Goals 2011
• Organisation, Management and Evaluation of Housing Cooperatives in Kenya 2010
• Public-Private Partnership in Housing and Urban Development 2011
• The Sub Prime Crisis: The Crisis of Over-Spending 2011