The Bulletin of the Center for Research on Regional Economic Systems, the Graduate School of Social Science, Hiroshima University Issue 27
2016-03 発行

市町村合併と三位一体の改革をはさんだ市町村の財政状況の変化 : 財政力指数と経常収支比率の変化とその要因

Influences of the municipal mergers and the reform of local public finance upon the financial capability of the Japanese municipalities
The Financial Capability Index ― Amount of Standard Fiscal Revenues / Amount of Standard Fiscal Demand ― among the Japanese municipalities has improved between FY 2002 and FY 2009. While SFR increased due to the transfer of tax revenue sources from the central government to the municipalities, SFD declined owing to the enlargement in scale caused by the municipal mergers. The ratio of the better off municipalities in the Financial Capability Index amounts to 91.7% among the merger-experienced municipalities compared to 70.7% among the non-experienced municipalities. But the Financial Capability Index of the merger-experienced municipalities in FY 2009 is below that of the non-experienced municipalities. The Current Account Balance in the local public finance ― Current Account Expenditures / Current Account Revenue Sources ― has got worse and become to be more rigid during the same period. The reason is that the revenue sources a little declined due to the reduction of the Local Allocation Taxes, whereas the expenditures remained high level.

The merger-experienced municipalities must consider that; their expenditures will expand owing to the increasing debt of the bonds which were issued at the mergers; their revenue sources will shrink because the extra local allocation taxes to accelerate the mergers will be gradually cut.
Financial Capability Index
Current Account Balance
Municipal mergers
Reform of local public finance