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Public investment and the fiscal common pool problem on municipal mergers in Japan

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  • Hirota, Haruaki
  • Yunoue, Hideo

Abstract

The purpose of this paper is to reveal the kinds of public investment that create a fiscal common pool problem through municipal mergers in Japan. In particular, we focus on whether municipal mergers increase road and public park construction immediately before the mergers because previous papers reveal that municipal mergers increase only local bonds. The empirical results show that subordinate merger partners rapidly increase their road and public park expenses just before mergers.

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  • Hirota, Haruaki & Yunoue, Hideo, 2020. "Public investment and the fiscal common pool problem on municipal mergers in Japan," Economic Analysis and Policy, Elsevier, vol. 67(C), pages 124-135.
    • Handle: RePEc:eee:ecanpo:v:67:y:2020:i:c:p:124-135
    DOI: 10.1016/j.eap.2020.07.001
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    Cited by:

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    More about this item

    Keywords

    Fiscal common pool problem; Municipal mergers; Public investment; Subordinate merger partner;
    All these keywords.

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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