IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

The role of Japanese local governments in stabilisation policy

Listed author(s):
  • Pascha, Werner
  • Robaschik, Frank
Registered author(s):

    Local governments in Japan account for about 80 per cent of general government spending when excluding social security expenditures. Therefore, for the implementation of fiscal policy it is important how local governments will behave. On the basis of the economic theories on fiscal federalism it is generally rational for local government entities, especially smaller ones, not to participate in the stabilisation policy of the central government and to take a free rider position. Such a behaviour would imply a substantial reduction or even an offsetting of the effects of a stabilisation policy of the central government. As for empirical evidence, a procyclical behaviour of local entities was observed in several countries, among them Germany. We show that in Japan this was not the case and that so far local governments do participate in the stabilisation efforts of the central government. In a second step we show the institutional arrangements that have enabled the central government to influence the fiscal behaviour of the local governments accordingly. Will recent regulatory changes and the enourmous debt level have a significant impact? We argue that although from April 2000 some legal changes in the direction of decentralisation were enforced, many influence mechanisms remained intact and thus the changes weaken the established system, but did not break it up altogether.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by University of Duisburg-Essen, Institute of East Asian Studies IN-EAST in its series Duisburger Arbeitspapiere Ostasienwissenschaften with number 40/2001.

    in new window

    Date of creation: 2001
    Handle: RePEc:zbw:udedao:402001
    Contact details of provider: Postal:
    Universitätsstrasse 12, 45117 Essen

    Phone: 0201 - 183 3633
    Fax: 0201 - 183 2292
    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:zbw:udedao:402001. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.