Blockchain Papers

Sirilaksana Khoman

No abstract is available for this record.

Aleksić Vesna

After 2001 Serbia started the process of democratization and socio-economic transition. Within the overall reform of public administration and the public finance system, the process of fiscal decentralization has started to strengthen the position of local self-governments. Decentralization in every respect, and especially fiscal, is the most important assumption of local development. In order for the decentralized state to function well, it is important that these three forms of decentralization: political, administrative and fiscal, be well coordinated with one another. Fiscal decentralization refers to the collection and consumption of funds at various levels of government. The paper outlines the reasons justifying the process of fiscal decentralization, as well as the reasons that are against fiscal decentralization, i.e. the reasons that speak of the limitations it carries with it. The goal of properly implemented fiscal decentralization is to strengthen the role of cities and municipalities, as well as their fiscal autonomy, that the Republic entrusted the local authorities with numerous important competencies and that the local budgets are multiplied. Decentralization in Serbia has not progressed satisfactorily. Serbia put fiscal decentralization at the heart of public administration reform. Local self-government financing in Serbia changed in this period, which led to instability. Only in the period between 2008 and 2015 the legal frameworks of the system of financing of local self-governments changed several times and thus the process of budget execution and financial management at the local level was impaired. The mentioned changes in the legal framework for the ultimate consequence had the reduction of the budgets of local governments, which jeopardized their ability to perform their communal, investment and other functions.

Robin Boadway, Luc Eyraud

This paper discusses how decentralized countries can achieve sound fiscal relations between the central government and lower government levels. The concepts of “vertical gap” and “vertical balance” provide an analytical framework for identifying and addressing key challenges. These concepts can help policymakers ensure that the financing of subnational governments (composed of transfers received from the center, own revenues, and borrowing) is both efficient and adequate given the allocation of spending responsibilities. More generally, the paper offers some perspectives about the optimal design of decentralization systems by examining the sequencing and economic principles underlying revenue and expenditure assignments, the use of transfers, and borrowing.

Tetiana Vasylieva, Yuriy Harust, Nataliya Vinnichenko, Alina Vysochyna

This article generalizes arguments and counter-arguments within the scientific discussion regarding the determination of the optimal decentralization level, which will provide the country’s innovative development, since the key task of decentralization has to be not only to expand the income and expenditure powers of the subnational formations but also to understand the final goal of this process – qualitative transformation of the country’s economic system towards improving its innovativeness and competitiveness. Thus, the decentralization reform has to be the driver of the innovative economic development, which is the expected result of the managerial decision-making freedom increase at the local level, the subnational formations’ financial self-sufficiency increase and more effective spending policy (expansion of the innovative projects financing amounts that will promote the sustainable economic growth). Systematization of the scientific works on the above problems proves that there is no one idea regarding the decentralization impact on the country’s economic and innovative development among scientists. That is why it is urgent to continue the empirical searching in this area, that will enable to take into account the dual nature of consequences regarding the activation of the decentralization processes. The empirical study is carried out through using of the non-linear analysis form of dependence (GLM regression, which enables to identify the linear and nonlinear character of the relationship between variables) based on the panel data, formed for set of 23 states-OECD members (Austria, Belgium, Canada, the Czech Republic, Denmark, Estonia, Finland, France Germany, Greece, Hungary, Italy, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland, Great Britain and the USA) during 2002-2015. The expenditure decentralization index, calculated as the ratio between the consolidated expenses amount at the subnational level and state consolidated expenses, expressed in parts of the whole, is chosen as the factorial variable model. The final variable (traditional for the economic growth models) is GDP per capita (dollars the USA). Besides, the set of control variables is added to this regression model (which explain the regularities of the resultative feature change and have a strong relationship with it). The control variables are selected on the basis of correlation analysis. The practical implementation of all stages in this research is performed using the software product Stata 12/SE. The results of the study confirm the non-linear character of dependence (the inverse U-shape) regarding the GDP change per capita on the expenditure decentralization level change, and also the maximum extremum of the function in the point with expenditure decentralization level 1.35. It means that excessive expenses load (above the specified norm) on the local budgets will be accompanied by inhibition of the innovative and economic dynamics, that should be taken into account by the relevant authorized executive bodies in investigation of the concrete measures regarding intergovernmental relationships reforming in direction of their decentralization, and in the formation of the well-balanced economic and innovative policies.

Aisha Shahzad, Mohammad Younus

The success of federalism in multiethnic societies greatly depends on fiscal decentralization. It empowers the provincial governments along with the local bodies at the grass root level. In this perspective fiscal decentralization needs structural arrangements in order to ensure revenue generation and appropriate expenditures. It helps to strengthen the national grid to avoid inter-provincial or intra-provincial discrepancies. This study illustrates the relationship between fiscal devolution and symmetrical horizontal economic development. It envisages the devolution plan (2001) introduced by former General Pervez Mushraff in Pakistan under which the Provincial Finance Commissions were established. This research would focus on Punjab as a case study to analyze the working of Provincial Finance Commission. This research tends to address the questions like what have been the patterns of fiscal decentralization in Pakistan? Did National Finance Commission and Provincial Finance Commission promote the principles of equitable devolution of resources in the divisible pool on the basis of need assessment? Could PFC be able to mitigate the intra-provincial disparities in Punjab? Did PFC take efficiency advantage in Punjab through the empowerment of local governments? This study would encompass the analysis of the resource allocation formula opted by the successive governments in the past till present and the counter arguments by the academia and the local body members. Qualitative and quantitative both methods would be used while incorporating primary as well secondary sources. This research concludes with the proposition that empowered local bodies and effective finance commission are the sine qua non of fiscal decentralization in democratic state like Pakistan.

Meryem Ait Ouali, Mohamed Boussetta

Financing local communities relies on a complex network of taxes, subsidies and loans. In the last decade the network has undergone numerous transformations .The reforms implanted in past years changed the systems of public finance substantially. Therefore, financial local autonomy is a term that frequently employed in the literature of federalism and decentralization, but it’s rarely defined conceptually in a careful way to empirical research. Generally it expresses the capacity of local communities to have their own revenue and expenditure budget, distinct from that of the state in which revenue can cover expenses incurred to meet their requirements. Indeed it is a highly valued feature of good governance. This paper is dedicated to a study in theory and practice. Starting with an overview on background of theoretical approach of local financial autonomy, then comparing the experiences of two European countries France, Italy and Morocco in the field. The purpose of this paper is to clarify the meaning of local financial autonomy and give a structured overview of the factors that may potentially influence the liberty of sub national authorities with regard of their own revenue and expenditure budget. Based on indicators and taking into account empirical evidences offered by official statistical datas, established in recent years for evaluating the position of administrative territorial units in relation to central government. The analyses prove that there is no universal model of local public finance applicable to all countries, because each has its own specific historical, cultural and linguistic particularities.

Yuke Anggun Pranata, Ahmad Rifai, Prayitno Basuki

This research aims to provide empirical proof that (a) unconditional transfer influence the regional finance capability and local expenditure, (b) flypaper effect occurred in fiscal decentralization policy at west nusa tenggara municipalities. Transfer of funds encourage the increase in the expenditure of local goverment. Using secondary data from the local government budget realization covering the period 2001-2015, we analyzing the contributions of unconditional transfer and regional finance capability to local expenditure. The results of this research by using partial least square showed unconditional transfer has significant effect to the regional finance capability and local expenditure. Other result indicate occurrence of flypaper effect, unconditional transfer have positif and significant effect on local expenditure more than regional capability. These indicated that local government still depend on unconditional transfer to realize number of local expenditure and regional capability. The implication of this research can use as the base of local government decision making on local own revenue and intergovernmental revenue management for local expenditure on public need, as well as base judgement on financial performance of local government (agen) and public (principal).

Hatim Hussain

Nearly twenty-five years ago, the internet disrupted the world and started a new era of technological supremacy. Today, with the rise of cryptocurrencies and its underlying technology, we stand at the helm of another such revolution. Cryptocurrencies like bitcoin are decentralised, digital currencies relying on a peer-to-peer network which operates without the need for a third-party intermediary like the Reserve Bank of India. Coupled with lack of regulatory guidance, its unique technical aspects create huge complications in its taxation. While much ignorance still prevails in respect of cryptocurrencies, countries around the world have finally started taking notice and acting upon it. This paper focuses on what cryptocurrencies are, why they are important, and the prevailing regulatory structure concerning them. It overviews the complete landscape for taxation of cryptocurrencies like bitcoin, analysing the indirect and direct tax structure, particularly after the implementation of Central Goods and Services Tax Act, 2017, while also addressing the issues concerning the evasionary practices. The findings help in assessing the regulatory aspects in light of the technological, economic, social and financial forces, and establishing a set framework for taxation of cryptocurrencies.

Xuan Jiang, Sunhee Choi

Purpose The rise of cultural governance has made cultural democracy important in East Asia. South Korea and China have chosen to develop cultural democracy by means of developing community-based cultural houses. Cultural houses in Korea were first managed from the center but have now been decentralized, and those in China have been developed based on local financing and administration. Since central-local intergovernmental relations, as they relate to public culture, have gone untouched in East Asia, the purpose of this paper is to study how central-local intergovernmental relations have impacted the development of cultural democracy in this area, in order to better understand how public culture should be developed. Design/methodology/approach A comparative study of the cases of South Korea and China has been used. The materials and information collected for the study were gathered by a review and an analysis of extant literature, policy documents, data and other materials from the relevant departments of both countries. It was also based on semi-structured interviews conducted with the national cultural departments, regulatory institutions, and with officials and scholars. Findings This study shows that central-local intergovernmental relations can have an impact on the management of community-based cultural houses and the effectiveness of cultural democracy’s development. Only complete decentralization that directly invites democratization will provide positive local conditions for cultural democracy’s growth. In short, meaningful governmental responses to local demands and a strong civil society are critical for the advancement of cultural democracy. Practical implications This study seeks to provide insights into the relationship between central-local intergovernmental relations and cultural democracy. At the micro project level, cultural project management should be improved; at the medium local level, the public must be made part of any decentralization effort; and at the macro national level, the multiple impacts caused by decentralization need to be considered. Originality/value This study is unique in terms of both its research questions and its research area. Central-local intergovernmental relations, as they relate to public culture, have gone comparatively untouched, especially in the context of East Asia. It is in this context that studying how central-local intergovernmental relations impact the development of cultural democracy is worthwhile, in order to better understand how public culture has developed and will be developed in future. A comparative study of the cases of South Korea and China has been used to discover the impacts of different dimensions of central-local decentralization on cultural development.

Indri Oktaviana, Lalu Hamdani Husnan, H. Ahmad Rifa’i

Assessment of Financial Performance for Local Government is an important thing to do to help improve the performance of government in the management of the Regional Budget (APBD) in a sustainable manner and to achieve the public accountability that is transparent and accountable. Local Government Financial performance is the ability of an area to explore and manage financial resources native to the area to meet their needs in order to support the passage of the government system, service to the community and regional development. Local government still relies on the transfer of funds than local revenue to finance government activities. Any delays in disbursement of funds transfers by the central government as a barrier to finance programs and activities that have been set in the budget. This study aimed to examine the effect of fiscal decentralization, fiscal stress and intergovernmental revenue on the financial performance of local governments in the province of West Nusa Tenggara (NTB). This study uses panel data from 9 regencies / cities and one province for 10 years (2006-2015). Analysis using panel data regression with Fixed Effect Model estimation method (FEM). The results showed that the decentralization of expenditure and fiscal stress has positive and significant effect on the financial performance of local governments while decentralization of revenue and intergovernmental revenue has significant and negative effect on the financial performance of local governments. This research is expected to provide input and benefit to the Local Government as policy makers in order to increase the potential of revenue derived from taxes, charges and the availability of natural resources are adequate to serve as a source of income and more attention to the allocation of sources of income into spending that oriented to the fulfillment of public service

Po Yang, Yunbo Liu

In the rapid development of Chinese higher vocational education, large gaps have appeared in the scale of development and resource generation among the provinces, among regions in the provinces, and among higher education institutions in the provinces. Balanced regional development and provincial-level coordination have become policy focal points, but a discussion of the relationship between the two has been lacking in the academic world. Based on 2009 data on vocational colleges in China, the quantitative analysis in this paper shows that there is a tension between the governance models of higher vocational education and balanced development of vocational colleges within provinces. Research findings show that school affiliation is related to the ability to attract public funding, appropriations for public schools are significantly higher than for private schools, and tuition for private schools is significantly higher than for public schools; school affiliation is related to output, and the new student registration rate and number of cooperating enterprises is higher for public schools than private schools; and there is a significant positive correlation between the ratio of prefecture-level city schools and the average number of cooperating enterprises for schools in a province, and a significant positive correlation between the ratio of private schools and the average tuition of schools in a province. This paper suggests that to achieve the dual objectives of balance and development, provincial-level governments should adjust their administrations and financing for higher vocational education and decentralize their authority to local governments, in order to build a diverse and flexible new model for higher vocational education governance.

Jane Beckett‐Camarata

The Albanian government has been decentralizing decision making. Central to decentralization is a system of intergovernmental revenue transfers, especially unconditional transfers. This study examines in what ways market conditions and policy options affect the central government and local government relationship. It analyzes unconditional intergovernmental revenue transfers between the central government and local governments to better understand Albanian fiscal decentralization. While the unconditional intergovernmental transfers during the time of this study were found to be stable, the fragmentation of local government units and the evolving role of the regions, could complicate decentralization. The lack of a clear path to local government debt and borrowing, coupled with the system of intergovernmental transfers, has resulted in few viable policy options for balancing local government budgets. A more diversified local revenue structure, coupled with the ability to borrow on the open market, could allow larger and better growth-enhancing public investments without additional budgetary pressures.

Thereca Febryani Gobapuspita

T he implementation of regional autonomy through fiscal decentralization scheme has not been able to exploit regional income that, in the long run, can support the success of the region in implementing the regional autonomy. With regard to such a problem, this research aims at examining the financial performance of the regional government in Sikka regency through ratio analysis towards the regional finance (financial independence ratio, effectiveness ratio, efficiency ratio, compatibility ratio, and growth ratio). This descriptive quantitative research applies document study for the data collection method. The data of this study were obtained through documentation method. The results of the analysis illustrate that the financial independence of Sikka Regency is still low, and it is categorized into instructive relationship pattern. Meanwhile, its own- source revenue is very effective, and its regional tax is efficient. However, the regional expenditure shows lack of compatibility in terms of its direct and indirect expenditures towards the total expenditure of the region. In addition, the regional income and expenditure growths also persistently fluctuate. K e ywords: Fiscal Decentralization, Regional Government Financial Ratio

Santiago Pinto

It is well-known that competition for factors of production, including competition for residents, affects the public services provided in the communities. This paper considers the determination of local investment in urban transport systems. Many specialists question the effectiveness of the current U.S. top-to-bottom transportation institutional arrangement in which the federal government plays a dominant role and recommend a shift toward a decentralized organization. We examine how such a shift would affect the levels of transport investment. Specifically, we consider a model of two cities, and assume, as in Brueckner and Selod (2006), that transport systems are characterized by different time and money costs. We compare the outcomes reached when the transport system is decided by a central authority (a state or federal government) to the one decided by each jurisdiction in a decentralized way. In the latter case, city or local transportation authorities choose the system that maximizes residents? welfare, taking as given the decisions made elsewhere, essentially competing for residents (or workers). Our analysis shows that even though a shift toward a decentralized arrangement of the transportation system would generally lead to overinvestment (relative to the centralized case), the extent of this bias depends on the specific factors that drive transport authorities in deciding the transportation system, on the landownership structure, and on the financing arrangements in place. The paper also shows that, in a more general setup, when the two cities differ in their productivity levels, the more productive city will tend to overinvest in transportation systems that connect the two cities, and the less productive city will tend to underinvest in those systems.

Peter Morgan, Long Q. Trinh

Sustainable and inclusive growth in emerging Asian economies requires continued high levels of public sector investment in areas such as infrastructure, education, health, and social services. These responsibilities, especially with regard to infrastructure investment, need to be devolved increasingly to the regional government level. However, growth of sources of revenue and financing for local governments has not necessarily kept pace, forcing them, in some cases, to increase borrowing or cut spending below needed levels. This chapter reviews alternative models of the relationship between central and local governments, and provides an overview and assessment of different financing mechanisms for local governments, including tax revenues, central government transfers, bank loans, and bond issuance, with a focus on the context of emerging Asian economies. The chapter also reviews financing mechanisms for local governments and mechanisms for maintaining fiscal stability and sustainability at both the central and local government levels. Based upon the evidence on the decentralization process in Asia, it proposes some policy implications for improving central–local government relations and fiscal sustainability.

Anwar Nasution

Without much preparation, Indonesia, in 2000, at a stroke replaced the previous system of centralized government and development planning with a wide range of decentralization programs. The reforms gave greater authority, political power, and financial resources directly to regencies and municipalities, bypassing the provinces. The powers transferred include those of executing a wide range of responsibilities in the areas of health, primary and middle-level education, public works, environment, communication, transport, agriculture, manufacturing, and other economic sectors. At the same time, the government replaced the antiquated cash-based, single-entry system of public finance with a modern double-entry accounting system that uses a single treasury account; is performance based; and has transparent management of the public treasury, tight expenditure and financial controls with performance indicators, computerized reporting, and a tightly scheduled auditing system. On the positive side, unlike in many developing and transition countries, the decentralization program in Indonesia has not caused major political or economic problems. However, the decentralization program was ill prepared and not carried out in a logical order for two reasons. First, the capacity of subnational governments to produce public and private goods, increase productivity and employment, and promote economic growth in their jurisdictions, was not increased. Because of the long tradition of centralization, local government never built the capacity to carry out economic planning and undertake initiatives to promote local economic growth. Before the reform, the local governments had mainly functioned as implementing agencies of national policies and programs. Second, the number of good financial managers, as required by the new laws of public treasury and auditing, was also limited and needed to be trained. The rising revenues of local governments do not follow their increasing government functions to promote economic development that could potentially cause fiscal imbalances.

Jacqueline Peterson

No abstract is available for this record.

Pinaki Chakraborty, Lekha Chakraborty, Anit Mukherjee

This book documents the effectiveness of decentralization on health and education service delivery in India. The core objective of this book has been to broaden the focus of decentralization away from the restricted debates within the public finance principles of fund function and functionaries. This book broadened the boundary by focusing on the impact of decentralization on public service delivery for two key services, viz. education and health. In a way this book is an attempt to examine the link between decentralization and human development. A study of this category is rare even across countries. The analysis of this book is carried out by distilling the existing studies in this area and the analysis of public finance data at three levels of governments in India. We have also used household survey statistics of consumption expenditure in understanding the utilization or incidence of the public spending on health and education in a decentralized governance system of India. While comparing across states, it is clear that local democracy and institutions of decentralization differ widely across states. The analysis of intergovernmental transfers with a focus on third tier has revealed that multiplicity of channels of fiscal transfers has complicated the transfer system and the untied nature of funds to local level is not adequate enough for local governments to undertake spatially required public spending programme. The commissioning of State Finance Commissions (SFC) though had put an end to the adhocism and arbitrariness in the fiscal transfers to the local bodies in a technical sense, the functioning of SFC and their recommendations in terms of quantum and criteria of devolution is still in a state of flux across most states. The book highlighted that the ‘decentralization’ would be effective only when the principles of public finance are harmonized with the principles of accountability in the design of the decentralization strategy itself. The book further highlighted that increasing participation of the users (‘voice’) and enhancing monitoring by the community or the user group at the service provider level (‘client power’) are the two core ingredients of improvement in service delivery with decentralization.

Pinaki Chakraborty, Lekha Chakraborty, Anit Mukherjee

There are two distinct but related elements that have been put forward as arguments in favour of greater role for local governments in delivering public services. The first is the extensive literature on ‘fiscal decentralization’ following the works of Tiebout (1956), Oats (1972) and others. This line of argument has been reviewed intensively by various studies. However, the other element that has received relatively little attention from economists working in the area of public finance is the recent literature on public service delivery lays great emphasis on fixing the governance and accountability of service provision – especially in health and education. Pritchett and Pande (2006) put forward the proposition that ‘effective decentralization’ (in the context of elementary education in India) will not be possible until the principles of public finance are harmonized with the principles of accountability in the design of the decentralization strategy itself. It is currently the accepted wisdom that decentralization provides an answer to increasing participation of the users (‘voice’) and enhancing monitoring by the community or the user group at the service provider level (‘client power’). In that sense, there is a direct line of accountability between the decentralized institutions. Following the analytical framework discussed in Chapter 1, laid down by the World Development Report (2004), we can visualize the accountability framework below: There are four basic external elements of accountability corresponding to citizens (or clients), the state (politicians/policymakers) and service providers (education/health) – voice, compact, management and client power. In the general case, citizens elect their representatives to national/state legislatures, who are in a compact with service providers made up of national or state government employees. The latter are supposed to provide service to the citizens in terms of delivery of education and health care. However, in this model, the route to accountability is ‘long’, implying that if the citizens are not satisfied with the service providers, they would need to wait until the next electoral cycle to vote on their preferences. Citizens can exercise little control over the compact and, therefore, suffer from weak client power.

Pinaki Chakraborty, Lekha Chakraborty, Anit Mukherjee

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Pinaki Chakraborty, Lekha Chakraborty, Anit Mukherjee

Decentralization is defined as the transfer of authority, responsibility and resources through deconcentration, delegation or devolution – from the centre to lower levels of administration. Theoretically, decentralization is neither good nor bad for efficiency and equity in terms of public service delivery. It needs to be recognized however that decentralization across countries has been predominantly a political process and not an economic one. The effects of decentralization depend on institution-specific design, which relates to the degree of decentralization and how decentralization policy (in terms of functions, finance and functionaries) and institutions interact. Despite the growing recognition across countries that decentralization can play a pivotal role in the economy for efficient delivery of public goods and services, especially in the countries of sharp regional disparities and heterogeneous population, there is few related literature – both theoretical and empirical – on the topic especially in the context of India. This book discusses the theoretical and empirical evidences related to the effectiveness of decentralization on specific public services, viz. education and health in India. Apart from an extensive review of literature, the study incorporates fresh analysis of decentralization, both in the Indian and global contexts. It undertakes the analysis of the benefit incidence of decentralized public service delivery with respect to health and education – an area which has not seen much attention in the past. The specific objective of this book is to provide a comprehensive review of research relating to the effectiveness of decentralization on education and health within the broad framework of institutional set-up, the degree of financial autonomy and accountability, and benefit incidence of decentralized public expenditure on health and education. The study assumes relevance in the context of India for two important reasons. The first and foremost is the legal fiat, i.e. the 73rd and 74th constitutional amendments giving recognition to the local self-governments. The second issue is the fiscal fiat, where there is asymmetry in functions and finance at the local level where functional responsibilities far exceed the revenue resources of local bodies leading to the problems of ‘unfunded mandates’.

Dennis A. Rondinelli

This chapter addresses the theory of decentralization and its experience since the early 1970s. National governments centralized the financing and management of public services and infrastructure in both industrialized and developing countries during the 1950s and 1960s for many reasons. In developing countries, many political leaders sought to build their new nations through the central government&s;s control of the economy. The dominant development theories of the 1950s and 1960s called for strong central government control over industrial and agricultural sectors as well as the public services and infrastructure needed to accelerate economic growth. Continued economic globalization through international trade and investment gave cities and metropolitan regions important new economic roles in the 1990s. The success of fiscal decentralization in emerging market countries has depended heavily on the quality of national governance. Positive impacts of decentralization on infrastructure investment also depend in part on the accuracy of local opinion about needs and priorities.

Agung Ridwan, Syaparuddin Syaparuddin, Candra Mustika

This study aims to analyze: 1) sources of financing for fiscal decentralization, GRDP and poverty levels of regencies / cities in Jambi Province (2) the effect of sources of fiscal decentralization financing on gross domestic product in regencies and cities in Jambi Province (3) the effect of fiscal decentralization financing sources towards poverty levels in regencies and cities in Jambi Province. The analysis period is 2007 - 2013. To analyze the influence of the sources of fiscal decentralization funding on GRDP and poverty levels, using two panel data regression models. The results of the analysis found that: 1) During the 2007-2013 period, the sources of financing for fiscal decentralization consisting of Local Original Revenue, Balanced Funds and Other Other Income in regencies and cities in Jambi Province generally increased every year; 2) The GRDP regency-city growth in Jambi Province is fairly high with an average of 6.83%, higher than the national economic growth; 3) In general, the poverty rate of regencies/cities in Jambi Province has decreased significantly every year during the period 2007 – 2013. Original Regional Revenue and other legitimate income have a negative and significant effect while the balance fund does not have a significant effect on the poverty level of regencies/cities in Jambi Province.

Ministry of National Development Planning, Alen Ermanita

For more than a decade, Indonesia has been practicing decentralization. During this period, local governments still experience difficulties in generating local revenues to fund their development. Local government bonds (LGBs) are actually one of the finest sources for financing local development. However, until now there is no real practice in issuing local bonds in Indonesia though it is allowed in the existing regulation. There are still many considerations which hindered the realization of LGB issuance ranging from the rule of mechanism to the local governments’ readiness themselves. To gain more insights about the issue, learning from another country (in this case: Japan) on how they manage LGBs effectively and securely will be beneficial. Comparison model between the two countries is chosen to see the regulation and managerial aspects in LGB implementation including the main institution in central level, rules of the game, buyers and purposes. By having this comparison, it is expected that some crucial factors can be looked at, which may then provide us some information on why LGBs are yet to bloom in Indonesia. Moreover, the comparison is expected to provide some basics about the possibility to ease policy adoption for Indonesia in managing LGBs.