Municipal sizes and municipal restructuring in Japan

Abstract

In this article, we quantitatively analyze changes in the size distribution of municipal jurisdictions in Japan by using their rank-size distribution to capture the changes. In Japan, the central government sometimes enacts large-scale municipal mergers, aimed at creating municipalities of a certain size. Japan’s local governance policy allocates tax revenues to municipalities based on the financial shortages of each municipality, which is designed to ensure financial equality among municipalities so that the central government can evenly maintain public services, especially in rural areas. Thus, if the central government eases population discrepancy among municipalities and creates a large number of uniformly sized municipalities, then the central government can reduce subsidies to local governments. The government’s previous policies on municipal mergers were enacted to foster this sort of efficiency. We examine changes in the distribution of municipal jurisdiction sizes to determine the actual effect of municipal merger policies. We obtain the result that the great municipal mergers of the 1950s Showa era made the municipalities more equal in size, which shows that the Municipality Merger Promotion Law of 1953 had an impact on the change of the size distribution of municipalities.