During last two decades, decentralization has never been far from the top of Japan’s political agenda. In 1993 the upper and lower houses of the Diet passed a resolution calling for decentralization and the coalition consisting of the Social Party and the Liberal Democratic Party has enacted the “Promotion Law of Decentralization” in 1995. Also the Committee for Promotion of the Decentralization that was established on the basis of the law took its interim recommendations to the Hashimoto Cabinet in 1997. After intensive debate and investigation, the committee submitted its final conclusion in 1998. The report suggested virtual elimination of agency delegated functions. But it was not entirely successful in terms of fiscal decentralization.