Andrew Dewit,
Associate Professor, Faculty of Economics
Rikkyo University

Abstract

For much of the last century, the central government was generally seen as the appropriate focus of taxation and locus of decisions on economic and social policy. We are now moving away from that era, with subsidiarity and decentralization being the new common sense guiding fiscal design. But progress on this front has been extremely slow. I use the two sharply contrasting cases of contemporary Japan and Korea to illustrate the politico-economic challenges and choices in fiscal decentralization. The two cases contrast sharply in that Korea is doing decentralization at breakneck speed while Japan is getting nowhere. The two contrasting situation in the two countries will be described and the reasons for the contrasting trajectories will be explored.