Government
The governments of Kanto and Johto are currently allies and both are democracies. Travel between them can only be issued by the government in the forms of passes, limited to a certain amount of time. Separate passes for trainers are located in the major cities: Viridian City, Vermillion City, Saffron City, Goldenrod City, and Olivine City. Trainer passes are normally good for a year, but trainers are required to check in monthly at Gyms.
Trainer's License
In order to become a licensed trainer, people must partake in a test. Within the last five years, trainers have been able to capture their own starter, provided at the Indigo League much like the Safari Zone, located in Johto. Upon being registered as a trainer, they are required to go through their home region’s gyms or their license is revoked, thus causing them to loose their Pokemon.
Gyms and Elite Four
Gyms are official facilities to test the strength of a trainer and their problem solving skills. Wins and losses are recorded on computers to keep track of wins and losses digitally. This has made badges obsolete, but many official gym leaders keep handing out badges for tradition’s sake.
Every January, there is a tournament held for those that win eight badges from either Kanto or Johto (not a mixture). The first five are able to go on and fight the Elite Four, along with six that are invited (who skip any tournament to challenge the Elite Four). Three months later, these eleven trainers challenge the Elite Four over the course of twenty-two weeks (to allow the Elite Four some time to rest their Pokemon and appropriately address injuries to their Pokemon).
Contests
Contests are on their own. Many contests are held, independent of government control and are all based on an international organization. Membership is required to participate in Contests, but entry fees are cheap. A small fee also is required to be deposited in order to participate (but these are quite cheap too). The first three places gain ribbons and up to the fifth place gain some form of money reward.
Current Situation
Currently, Kanto and Johto have prepared for war against a region in the west, causing mass rationing and for people to go into the armed forces. Recently, freedom of press and speech have been quieted. Minor riots have started up because of food shortages and doctor shortages. In the meantime, a new rise in an organization called Turbulence has been causing some political trouble.
Team Turbulence
A new organization. Little is known about them at the moment, but they have been causing a mixture of civil disobedience and riots across Kanto and are suspected of doing so in Johto. Their motives currently remain unclear.