City in the Age of Depopulation:

Toward Town Planning of Mature Society

Abstract

　The theory and practice of “urban management” has recently gotten more attention in response to Japan’s rapid depopulation trend. This comes from an urgent concern of municipalities to satisfy their ever-increasing fiscal needs under their strict budget constraints. In fixing this issue, they first must decide which purpose they would prioritize in budget allocation. Second, municipalities need to maximize their inhabitants’ welfare, through maximizing their total revenue, including tax revenue.

　Successful urban management is closely related to how we understand the concept of “investments.” Investments usually refer to expenditures for physical capital accumulation. However, in a knowledge-based economy where knowledge becomes one of the most important driving forces of value creation / profitmaking, Intangible investments like human capital or social capital play a more important role in urban development than traditional material investments. This is because the physical infrastructure in urban areas reached a high enough level, whereas the stock level of human and social capital, which are crucial for urban management, is still not enough.

　The direct participation of inhabitants in urban management is most effective in the promotion of accumulation of human and social capital, compared to enlightenment, public relations, and education / training by public authorities. Some good examples are their participation in urban planning toward infrastructure restructuring in face of future depopulation, and their participation in local renewable energy development project, which would hopefully contribute to the increase of local income. “Learning by doing” through the process of inhabitants’ participation helps in promoting human and social capital accumulation.