Evaluation of Municipal Mergers Focusing on Core City Blank Area

Abstract

Recently, the Special Municipality Mergers Law deadline has passed and incentives for mergers have become considerably reduced from the viewpoint of fiscal effects. Additionally, merger plans in Hokkaido Prefecture have not been mostly completed to avoid increases in the inhabitant burden risk connected with area increases of municipalities. A vision for a sustainable settlement zone that can be supported by life functions and amenity improvements for small-scale autonomies has started to attract attention. These small-scale autonomies must make arrangements with large-scale "core cities". However, blank areas exist in the core cities of Hokkaido Prefecture, which is characterized by distances between municipalities. In this study, we newly proposed an analysis model for optimized combinations of municipality mergers to create new core cities in the open areas. The analysis model consists of two analytic views, "differences in public finance efficiency" and "differences in public service efficiency".
A dataset of municipal employment costs and budget expenditures after municipality mergers were computed from a forecasting model with explanatory variables set on the population after a municipality merger. Additionally, a debasement of public services for inhabitants takes into account the aggravation of the access environment with an increase in municipality area. Additionally, this study used the index of Access-Total Service Score (A-TSS) that is an integration of the index of public services and access burden for inhabitants.
The quantitative effects of municipality mergers were analyzed based on the Data Envelopment Analysis (DEA) model with the above-mentioned datasets from the viewpoints of 'public finance' and 'public service'. The effect values were derived from variations in efficiency scores. The optimized combinations of municipality mergers were evaluated by the Financial and Administrative Improvement Factor (FAI) , which is computed based on deviation scores using public finance effects and public service effects in these merger plans.
Based on the analyses, we propose a policy for sustainable settlement zones in Hokkaido Prefecture.

JEL Classification: R49, R51, R53, R59