Abstract
:The number of municipalities in Japan decreased from 3,232 in 1999 to 1,820 in 2006 due to municipal mergers (heisei-no-daigappei). This article studies the political choices made by local council members during municipal mergers. In Japan, local council membership is a full-time job with veto power over the local administration. Because council members receive high wages, they would like to keep their seats. Municipal mergers affect their jobs because the central government can treat merging local governments preferentially or impose penalties on them. Our results show that the size of a municipality affects whether special provisions will be applied for its local council members. The political power of the national government also affects municipality merger decisions. The application of special conditions transfers a fiscal burden to the entire country under the national system of local allocation tax grants. Our results show that municipalities choosing to apply the special provisions receive benefits from other municipalities without any additional costs. Hence, the central government’s policy on municipal mergers induces a fiscal common-pool problem in Japan.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
