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Intergovernmental Competition for Donations: The Case of the Furusato Nozei Program in Japan

Author

Listed:
  • Eiji Fukasawa

    (National Diet Library)

  • Takeshi Fukasawa

    (Graduate School of Economics, Faculty of Economics, The University of Tokyo)

  • Hikaru Ogawa

    (Faculty of Economics, The University of Tokyo)

Abstract

This paper shows that municipalities compete excessively for donations under a unique program called Furusato Nozei (Tax payment to hometown) in Japan. Under the program, people make donations to their favorite municipalities and municipalities that have received donations give "reciprocal" gifts in return. Our estimates show that municipalities facing competition to attract donations provide excessive gifts to donors, and net revenue from the program is 10.4% to 12.1% lower than in a scenario without competition.

Suggested Citation

  • Eiji Fukasawa & Takeshi Fukasawa & Hikaru Ogawa, 2019. "Intergovernmental Competition for Donations: The Case of the Furusato Nozei Program in Japan," CIRJE F-Series CIRJE-F-1129, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2019cf1129
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    References listed on IDEAS

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    Cited by:

    1. Kentaka Aruga, 2020. "Is Environmental Awareness a Good Predictor of an Individual’s Altruism Level?," Sustainability, MDPI, vol. 12(19), pages 1-12, September.
    2. Ogawa, Akinobu & Kondoh, Haruo, 2024. "How Does Intergovernmental Competition through the Hometown Tax Donation System Affect Local Government Efficiency?," MPRA Paper 121688, University Library of Munich, Germany.
    3. Fukasawa, Eiji & Fukasawa, Takeshi & Ogawa, Hikaru, 2020. "Intergovernmental competition for donations: The case of the Furusato Nozei program in Japan," Journal of Asian Economics, Elsevier, vol. 67(C).

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    More about this item

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

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