In view of structural unemployment, decreasing tax revenues and heavy demands placed on the government to secure social welfare systems, the relations between federal, regions/states and local governments is being reshaped in several highly developed service societies. This applies to both Japan and Germany. In the interest of upholding citizens’ services, both countries are shifting responsibility from the central to the state/regional or local level. The gain from political independence of local regions and in Germany the states (federalism reform) may mean we can await higher levels of flexibility, more innovative approaches to solutions as well as increased levels of civic engagement and citizen-friendliness, yet there is also the danger that the local and regional levels of administration will be financially overwhelmed with their new range of tasks. The consequence would be the dilemma of gaining political independence but concurrently continuing existing dependence on funding from the central level. This is typical scenario for the current movement toward decentralization in Germany and Japan. The solutions to the problems vary. This symposium shall examine the current state of decentralization in Germany and Japan and then present and discuss the consequences of administrative decentralization measures for the ability of regional and local political cultures to find solutions. Focal areas of the conference will be issues relevant to the relationship between the State and its citizen, and the efficiency of the State.