Welfare Magnets?: Political Factors on Welfare Expenditure at Municipalities in Japan

This paper clarifies how and why Japanese municipalities are implementing redistribution policy since obtaining greater autonomy as a result of decentralization reform. Beginning in the mid-1990s, the Japanese central government has delegated much of its authority for providing public services to sub-national governments. This initiative has included both administrative and fiscal decentralization. For simplicity, this paper focuses on welfare policy because it closely reflects the level of autonomy experienced by municipal governments. As Paul Peterson points out, municipal governments tend to reduce or cut expenditure for redistribution. His “city limits” theory has been widely accepted by political scientists. However, Japanese municipalities have played a major role in providing welfare. Currently, sub-national governments in Japan fund more than 70% of welfare services, with the central government contributing only 30%. How do they manage their public services while dealing with the “city limits” problem? To answer these questions, I analyse what kinds of services Japanese cities provide, based on their public expenditure datasets and why do they provide welfare policy. First, this paper analyses the data by the various categories of Japanese cities to test the city limits theory, which implies that municipal governments with more autonomy in providing public services will try to reduce their expenditure on welfare. Second, this paper will focus on the political factors including partisanship of mayors, election timing, etc.