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Providing Public Services in a Decentralized Way: Local Government Finances in Sweden and Japan
February 28, 2017 - 15:15-16:45
A Stockholm Seminar on Japan by Dr. Morinao Iju, Associate Professor, Yokohama National University & Visiting Researcher, European Institute of Japanese Studies, Stockholm School of Economics.
Sweden and Japan have a similar characteristic in terms of fiscal system, where the local government sector has a larger share of responsibilities for providing public services in the framework of a unitary state. However, while Sweden has developed the stable local revenues with local income tax and tax equalization system, Japan has not been successful of financing the increasing public demands even after the fiscal decentralization reforms since the mid-1990s. This presentation examines the fiscal problems of local governments in Japan and tries to extract some lessons from the Swedish experience, where the local governments have increased the tax rates to finance the expanding welfare services since the 1960s.
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