Analysis of the implementation of information disclosure ordinances in Japan: the effect on the income of chief executives in local governments

In Japan, the disclosure ordinance has been drastically enacted during the—1999–2010. Using an originally constructed panel dataset consisting of approximately 1700 local governments for 1999–2010, we empirically examined the influence of information disclosure ordinances on the income of chief executives in local Japanese governments. Furthermore, we also investigated how the effect of the ordinance changes with time. Our key finding was that the income of such local government officials decreased after implementing the ordinances; that income also declined with time. Hence, information disclosure about local government reduced the income of top officials, which increased with time. The income of chiefs executives was open, without the need for ordinances; however, the ordinances provided transparency regarding the work performance of chief executives. From this finding, we derive the argument that transparency reduces the chief executive’s income because of an increase in accountability.