中央地方関係から見た日本の財政赤字 The Influence of Central-Local Relations on Fiscal Deficits:Fiscal Deficits, Japanese Style?

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  This article analyses the difference in the rates of an increase in fiscal deficits between central and local government in Japan. Since the mid 1970s, central government had boosted its own deficits, whereas local government deficits had grown at a slow pace. <br>  The existing literature stresses the importance of the institutional arrangement which biased in favour of the Ministry of Home Affairs (MoHA), responsible for local government finance. However, it fails to explain why, during the periods of 1975-84 and 1989-98, there was a marked increase in central government deficits, despite a slight increase in local government deficits. <br>  In this article, I argue that the political game of local government finance among the ruling Liberal Democratic Party (LDP), the MoHA, and the Ministry of Finance (MoF) does matter in explaining the unique pattern of Japanese fiscal deficits. The LDP, encountering the political instability, preferred fiscal expansion without taxation. Knowing the LDP’ policy preference, the MoHA strongly requested the MoF to raise the unconditional lump-sum grants to local government. As a result of the LDP's influence, the MoF reluctantly surrendered to the MoHA.

Journal

  • The Annuals of Japanese Political Science Association

    The Annuals of Japanese Political Science Association 59(2), 2_11-2_36, 2008

    JAPANESE POLITICAL SCIENCE ASSOCIATION

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