Japanese Towns Can’t Keep off the Dole

Just a quick link, quote, and commentary shot straight from my hip for a story:

1 DAY BONUS: Over 40 localities to delay mergers

The Asahi Shimbun

The delay gains merging municipalities an extra year of benefits.

Localities poised to merge in a central government plan to reduce costs are learning that sometimes it pays to be late.

Of the 44 municipalities that are set to merge nationwide by April 1, more than 90 percent, or 41, will postpone the move to qualify for one more year of extra funds, an Asahi Shimbun study shows.

In fact, 24 of the cities and towns delaying their mergers are pushing the date back only one day to gain the bonus. By delaying, the 41 municipalities will receive between a few hundred million yen and nearly 3 billion yen more in tax allocations, the study said.

This merger is the “Great Heisei Merger” which follows the “Great Showa Merger” and the “Great Meiji Merger”. In the Meiji period, the tens of thousands of feudal hamlets that had existed in the Bakufu period were reorganized into more modern style towns and cities when the Meiji Constitution came into effect in 1888. In Showa, there was further reorganization. There is a great World Bank paper on the topic that I completely missed out on when I wrote a paper about this for class. Doh!

Basically, the Showa merger in the 1950s switched from the more hands-off, autonomous style of the Meiji/Taisho/early Showa eras to a mostly centralized funding system. Basically the towns send all their money to Tokyo and then get it doled back to them. It was seen as more efficient since all policy was being made from Tokyo anyway. This new round of mergers reflects more the changing demographics of Japan than a planned economy. Many towns are simply running out of people, so merging would give people more access to public services etc.

Koizumi wants to go back to the more hands-off approach, allowing the Prefectures and towns to have more tax collecting power. The Keidanren wants him to go a step further and eliminate prefectures altogether, making a 9-member United States of Japan (called doushuusei), but this is maybe a first step.

Funny, then, that he’s using funding incentives to get the mergers going. Local governments who have been nurtured with central government welfare aren’t going to change so easily. They’ll be happy to wait an extra day to get a bigger check.