The plan officially began in 1981 because of the 1970s energy crisis and the disparity between Tokyo and other prefectures, that caused to streamline the administration to reduce a fiscal constrain.
The decentralization law enacted in 2000, which abolished the central government delegation system, but it was perceived as unfinished reform.
[2] Meiji Restoration in 1871 made feudal lords turned into a governor over local territories in which became Prefectures of Japan.
The Government of Meiji Japan then dismissed all feudal lords to become peerage and appointed new direct-reported governors.
[4] Itagaki Taisuke led civil moments to create a system of people participation, the Constitution of Japan and the National Diet, in 1889.
[7] After the World War II ended in 1946, the new Constitution of Japan introduced a directly guaranteed of local governments by Articles 92 to 95 in the Chapter 8.
[9] In 1949, the Shoup Mission recommended that local revenue sources should be strengthened and the subsidy from the central government should be abolished or rationalized.
[5] Japanese government then established a Committee to Study Local Administration (Chihô gyôsei Chôsaiin kaigi), called the Kanbe Committee, published "Recommendations on the Reallocation of Administrative Services" (gyôseijimu no saihaibun ni kansuru kankoku) in December 1950.
[11] The New City Planning Law of 1968 (shin toshi keikaku hô) and the creation of the first National Land Agency (Kokudochô) in 1974 showed an unintentional attempt to decentralize.
[14] There was a slowly improvement on decentralisation, but postwar Japan was still struggle to increase autonomy level of local communities.
CAR submitted the final report to the Yasuhiro Nakasone cabinet under the slogan, "Financial reconstruction without tax increases.” Academics read as an early sign of a decentralization.
Chair Prof. Yoriaki Narita, from Yokohama National University including 13 members (1 business, 4 academics, 2 local government, 3 former central government officials, 2 journalists and 1 labour representative) brought together to examine land use, housing, industrial, transport and telecommunications issues.
Chair Prof. Wataru Omori of Tokyo University including 10 members (3 academics, 2 local government, 2 former central government officials, 2 journalists and 1 labour representative) brought together to examine welfare, health, education, culture, employment and consumption issues.
In 1996, the Decentralization Promotion Committee (DPC) made the interim report on five reasons to implement decentralisation reform.
"[24] The Decentralization Promotion Committee (DPC) played an important role in 1997 as they proposed to repeal the Meiji era's Agency Delegated Function System (ADT, kikan inin jimu.
[26] DPC also proposed the new system, Self-Governing Functions (SGF, Jichi Jimu) and the Statutory Entrusted Functions (SEF, Hotei Jutaku Jimu), and to close the gap of revenue between the central and the locals by using the Local Allocation Tax Grant (LATG).
[28] The principles of the law are to reduce an intervention by the central government to the absolute minimum, to guarantee fairness and transparency in process of document delivery or requesting permission or giving approval.
More than 100 laws were revised with the propose to repeal an approval by the central government such as a decision to issue local bond.
[32] One of the revised laws was the City Planning Law in June 1999 with the enacted the Package Act to transform city planning administration from a "agency-delegated administrations" (ATD, kikan inin jimu) to the Self-Governing Functions (SGF, Jichi Jimu), in which it increased a level of autonomy.
[35] Based on the Omnibus Decentralization Law, the central government forced municipal amalgamations by using incentive schemes according to special financial measures.
[39] From 2006, individual laws were enacted to support decentralisation process, however it produced no strong responses from local governments.
Two main goals are to equalize disparities in fiscal sources and to guarantee a public goods and services.
The law requires local governments to provide public goods and services at least to meet the legal obligation.
The Debt-to-GDP ratio of local governments had increased from 15% in 1991 to more than 40% in 2004, represented the equivalent of the gross national income of France.
[51] Japan has a two-tier system of local government, 47 prefectures and 1,718 municipalities in 2018, including cities, towns, and villages.
[53] Since the decentralisation law enacted from 1999 to year 2014, local councils had played a weak role in legislative performance.
Only 11.0% of local councils submitted a bylaw proposal in the same year, instead, most of them depend on the strong role of mayors as a lawmaker and are considered as a rubber stamp for the administrative body.
[56] Ichiro Aoki of the Policy Research Institute Ministry of Finance Japan, criticised the Local Allocation Tax Grant (LATG) which guarantees the ideal income of the local governments that LATG is unsustainable and lack of transparency of a decision-making process.
Other points are lack of tax collection in local level, difficulty of prefecture tasks that overlapping with the central government.
It was not start from "bottom-up", but "top-down", Second, it was pressured because the need to reduce the fiscal trouble from the economic slowdown, third, the dependent character of local governments has remains after the reform.