The Effect of the Mayoral Election on Local Financial Policies in Japan

Abstract

Japanese local municipalities are facing the fiscal crisis. Using a survey dataset gathered in Japan, Korea and United States, this paper examines the linkage between the Japanese local political environment, especially mayoral election results, and the growth of the municipal expenditure.
The incumbent mayor wants re-election, and seeks several strategies for. Creating or keeping a good Mayor-Council relationship is a useful strategy. In election year, increasing expenditure is also important for re-election.
In Japanese local government, the less the mayor's political resources for re-election the more active the response to the council's needs. This result explains one cause for the growth of Japanese local expenditure, because most Japanese local councilors want to spend more. The local spending level is effected by the financial situation, and relates to the mayoral election year. The local budget tends to increase throught the mayoral election. However, the rate of budget increasing is more in the year after a mayoral election than in election year. The Mayor-Council relationship and the mayor's election result are important factors to determine local expenditure levels in Japan.
In addition, the mayor's political ideology relates to the mayor's financial preference toward spending a little in recent years. There are few differences between left, right, and “ainori” mayors' preferences. To explain local financial policies by party ideology is no longer impossible.