ABSTRACT
This chapter provides the institutional framework of Japanese central–local government relations determines the costs of exchange between governmental organisations. The initial role reflects national diversity by promoting a higher degree of local autonomy, while the second helps to create national unity by supporting institutional centralisation. The concept of centralisation versus local autonomy is relatively narrow but quite elastic. To provide a more comprehensive understanding, however, different aspects of centralisation and local autonomy need to be explained in terms of horizontal relationships at the same level and vertical ones within each structure. Strong national unity is based on patterns of regularised cooperative behaviour between levels of government. There must be a consistency between local communities’ role expectations and their actual behaviour to attain the long term durability of national unity. Citizens may exercise choice by moving to a locality where service levels are closer to their needs.
