With social economic changes, there has been a strong argument that the Japanese governmental system must move from centralization to decentralization. I agree with this position. If that is the case, intergovernmental relations, including those of localities, should not be vertical relations based on control and order, but horizontal ones based on equality and cooperation. The vertical relations, in concrete terms the subsidy system and the permission/authorization system, need to be fundamentally reformed. In order to clarify the details of such reforms, it is important to analyse these vertical systems comparatively.