2025 Volume 20 Issue 1 Pages 189-202
This study focuses on the Tokyo special ward tax and the fiscal adjustment system. It aims to examine the relationship between the central area and the suburbs on fiscal management in special wards. The findings of this study can be summarized as follows: 1) As the relationship between the central area and suburbs in the special wards strengthens, the opposition between the “central wards that bear the cost” and the “peripheral wards that receive redistribution” is more pronounced. 2) Peripheral wards, which have a strong suburban character, have regional characteristics similar to those of suburban municipalities, and they can carry out flexible fiscal management thanks to financial equalization grants (funded by the abundant tax revenue of the central wards). 3) Owing to the peculiarities of the Tokyo metropolitan government’s fiscal adjustment system, suburban municipalities in the Tokyo metropolitan area is in the most disadvantageous position compared to other metropolitan areas. Based on the above findings, it is suggested that the Tokyo metropolitan government’s fiscal adjustment system, which is designed to balance the uneven distribution of tax revenue caused by the structure of the special wards’ central area and the suburbans relationship, has led to significant differences in fiscal management between peripheral wards that receive financial transfers and suburban municipalities that do not.
