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Political Mergers as Coalition Formation: Evidence from Japanese Municipal Amalgamations

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Author Info
Eric Weese
Abstract

Political coalition formation games can describe the formation and dissolution of nations, as well as the creation of coalition governments, the establishment of political parties, and other similar phenomena. These games have been studied from a theoretical perspective, but the models have not been used extensively in empirical work.This paper presents a method of estimating political coalition formation models with many-player coalitions, and then applies this method to the recent heisei municipal amalgamations in Japan to estimate structural coefficients that describe the behaviour of municipalities. The method enables counterfactual analysis, which in the Japanese case shows that the national government could increase welfare via a counter-intuitive policy involving transfers to richer municipalities conditional on their participation in a merger.

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Paper provided by Institute of Economic Research, Hitotsubashi University in its series Global COE Hi-Stat Discussion Paper Series with number gd08-017.

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Date of creation: Dec 2008
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Handle: RePEc:hst:ghsdps:gd08-017

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Related research
Keywords: Coalition Formation; Municipal Mergers; Japan;

Find related papers by JEL classification:
C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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  6. Miceli Thomas J., 1993. "The Decision to Regionalize in the Provision of Education: An Application of the Tiebout Model," Journal of Urban Economics, Elsevier, vol. 33(3), pages 344-360, May. [Downloadable!] (restricted)
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