Abstract
This paper considers the desired conditions in reconstructing communities within a shrinking local society. On a macro scale, Japan has various social problems; low fertility, rapid ageing and financial consolidation of local authorities. Many local governments also face similar problems. In this sense, Sado Island might be called a microcosm of Japan as a whole. Global society is now searching for the achievement of sustainable development. There is increasing interest in preferring well-being over economic growth. In this article I first look at the transition to a shrinking population, and local and economic conditions in Sado. I then outline the developmental of welfare and environment policies of Sado City. Finally, I consider the reconstruction of two communities from the sustainable livelihoods approach by looking at livelihood resources: different types of natural, economic, human, cultural and social capitals. As a result, the consideration leads me to the conclusion that characteristics of cultural capital and a plurality of social capitals within community are mainly related to reconstructing communities.
