Getting the Most Out of Public Sector Decentralisation in Japan

Isabelle Joumard and Tadashi Yokoyama

No 416, OECD Economics Department Working Papers from OECD Publishing

Abstract: Revamping fiscal relations across levels of government is of paramount importance in supporting fiscal consolidation and public sector effectiveness. This paper analyses a number of problems, including regulations that limit local governments’ ability to innovate and respond to local citizens’ preferences, the inefficient system of intergovernmental grants, the complex structure of local taxes and fiscal rules which are too lenient to secure fiscal discipline. The paper concludes that the grant system should be reformed to promote local governments’ incentives to introduce innovations so as to better respond to needs at lower cost. Barriers to the effective use of sub-national governments’ taxing powers should be removed while efforts should be made to keep the tax system as simple and neutral as possible. Existing fiscal rules and market instruments should be hardened. This would require that the central government state clearly that it will not intervene as a lender of last ...

Optimiser l'impact de la décentralisation au Japon La réforme des relations financières entre l’État et les collectivités territoriales est essentielle pour soutenir le processus d’assainissement budgétaire et l’efficacité du secteur public. Ce document met en lumière un certain nombre de problèmes, notamment les réglementations qui limitent la capacité des collectivités territoriales à innover et à répondre aux préférences des citoyens, un système inefficace de transferts intergouvernementaux, une fiscalité locale excessivement complexe et des règles budgétaires trop laxistes. Ce document conclut qu’une réforme du système des transferts est nécessaire pour inciter les collectivités territoriales à innover afin de répondre mieux et à moindre coût aux besoins des citoyens. Les dispositions institutionnelles qui limitent l’utilisation effective des pouvoirs des collectivités territoriales en matière d’impôts doivent être éliminées tout en s’assurant que le système fiscal soit le plus simple et le plus neutre possible. Les règles ...

Keywords: collectivités territoriales; discipline budgétaire; fiscal discipline; fiscal federalism; fédéralisme financier; intergovernmental grants; Japan; Japon; local government; transferts intergouvernementaux (search for similar items in EconPapers)
JEL-codes: H1 H2 H7 R58 (search for similar items in EconPapers)
Date: 2005-01-27
New Economics Papers: this item is included in nep-geo, nep-pbe and nep-sea
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:oec:ecoaaa:416-en

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