2007 Volume 14 Pages 243-254
Local governments have been recently facing financial depression due to the central government's policy to restructure subsidiaries and/or grants. Cutting cost on public services for reduction of financial debt is no longer acceptable, but measures to ensure new financial sources have not yet sufficiently taken. This paper contributes to innovating the finances of local governments while proposing application of assetbacked securities to local infrastructures. More specifically, the paper (1) offers a financial structure model to activate local infrastructures, (2) clarifies legal issues, (3) attempts computation using a toll road model project, (4) investigates the effect of the proposed financial structure, and finally (5) discusses laws and regulations that must be deregulated.