In Japan, fiscal decentralization has recently received public attention as a solution for the problematic intergovernmental fiscal relationship between its central and local governments, and as a potential solution for some of the country's most serious problems such as the large size of total government expenditures, its continuously inactive economy, and its huge public debt. This fiscal decentralization policy is actively being discussed within the Koizumi cabinet especially between Mr. Shiokawa and Mr. Katayama. Mr. Akaiwa will discuss following issues based on his interdisciplinary research:

1. What are the problems in the current intergovernmental fiscal relationship in Japan?
   
2. How has the fiscal decentralization policy been argued among bureaucrats and politicians for several decades?
   
3. What are the expected effects of the fiscal decentralization policy in both economic and political contexts?
   
4. How should the Japanese government implement fiscal decentralization policy?