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The Impact of Intergovernmental Transfers in the Japanese Local Government Fiscal System


  • Sayuri Shirai

    (Faculty of Policy Management Keio University 5322 Endoh, Fujisawa Kanagawa 252-8520 Japan)


Since the 1990s, a decline in local revenue caused by sluggish economic growth and an increased tendency for local governments to implement expansionary fiscal policies on behalf of Japan's central government have given rise to a growing gap between autonomous revenue and total expenditure. This has caused a rapid increase in various intergovernmental transfers, particularly to lowincome local governments, leading to excessive and unproductive spending. Within a cash-based settlement accounting system, the fiscal positions of low-income prefectures have become superior to those of high-income ones, giving the impression that the former are fiscally sounder than the latter. Decentralization initiatives should take these problems of the existing system into account. Copyright (c) 2006 The Earth Institute at Columbia University and the Massachusetts Institute of Technology.

Suggested Citation

  • Sayuri Shirai, 2005. "The Impact of Intergovernmental Transfers in the Japanese Local Government Fiscal System," Asian Economic Papers, MIT Press, vol. 4(2), pages 26-58, Spring/Su.
  • Handle: RePEc:tpr:asiaec:v:4:y:2005:i:2:p:26-58

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    Cited by:

    1. Mitsuhiko Kataoka & Kodrat Wibowo, 2014. "Decentralization and Spatial Allocation Policy of Public Investment in Indonesia and Japan," Working Papers in Economics and Development Studies (WoPEDS) 201403, Department of Economics, Padjadjaran University, revised Feb 2014.

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