An Empirical Analysis on Inter-Municipal Disparity in the Usage of Special Zones System

Abstract

 As for the impacts of decentralization on the innovation by local governments, there are two opposing views. Due to the lack of empirical knowledge, the dispute is still unresolved. In this study, we focus on a special zones system for regulatory reform. We regard a proposal of deregulation as an innovation of regulatory reform, and regard a special zones being approved as a diffusion of innovation. We use a logistic regression analysis and a cross table analysis. Our results show that the innovations tend to be brought by the populous municipalities and tend to diffuse to the populous or financially distressed municipalities.