Fiscal decentralization in Japan aims to improve local government efficiency while controlling budgets. The theory suggests that local governments can serve residents better if issues like limited resources and overlapping jurisdictions are managed well. Different types of federalism, like economic and democratic, impact how welfare policies are implemented. The Welfare Reform Act of 1996 in the U.S. shifted some welfare responsibilities to state governments, challenging the traditional role of the central government in social security. Matching grants are used to prevent negative effects from poor local services.