Decentralization was pushed in the U.S., Europe, and Japan by globalization at the end of 20th century and the reform of neoliberal administrations. This governance reform accelerated the authority of domestic affairs to be concentrated in municipalities. Both the French and the Italian governments follow “the European Charter of Local Governments,” introducing the principle of subsidiarity to manage huge amounts of paper work in wide areas; they implement organization alliance by maintaining communes and communities.

On the other hand, municipalities in Japan, England, and Northern Europe established financial foundations through municipal mergers. Japan has experienced a large-scale merger three times led by the central government since 1888, when the modern local autonomy system was established. Japan is the only country in the world to repeatedly implement a forced municipal merger policy.

This paper shows the historical characteristics of Japanese municipal mergers. It is not the history of local residential authority, but of organizing the base of administrative organizations in the government. The 1999 “Great Heisei Mergers,” a merger based on decentralization reform, is evaluated in this paper against such a background. To date, this merger left things unfinished in comparison to Japan's other two mergers conducted in the Meiji and the Showa eras. As a result, achievements remain ambiguous and unclear. Moreover, these mergers revealed critical problems when the Great East Japan Earthquake occurred. From the view of residential autonomy, both the central and municipal authorities continue to deal with crucial issues about how they should resptecively manage large-scale municipalities and maintain the small-scale municipalities in rural areas which refuse to merge.

This paper summarizes the municipal mergers that have been implemented over the past in Japan. The focus of this paper is an evaluation of the “the Heisei Mergers” (1999-2010) conducted to change socioeconomic issues such as declining population, declining birthrate and aging population, and establish the administrative and financial infrastructure appropriate for the basic municipality that will serve as a base for decentralization. The author takes an in-depth look at the effect of municipal merger and future municipalities.

This paper discusses the possibilities and achievements of “the Heisei Merger” from the viewpoint of urban and regional planning. It was expected that the merger would decrease the gap between administrative boundaries and daily activity areas, and urban policies could be implemented in wider areas. However, in reality, it is difficult to realize efficient and effective policies such as the reorganization of city planning areas and the relocation of public facilities, partly because of a psychological barrier between councilors and citizens. After “the Heisei Merger”, flexible network policy among municipalities was promoted, but the links between functional cooperation and spatial planning remain weak. It seems to be important to gain experience in regional cooperation and broaden cooperative fields to create space for sustainable polycentric spatial structures.

This paper investigates the relationship between municipal mergers and cost reduction over municipalities given the elapse of 10 years after the “Great Heisei Mergers” in Japan. First, this paper surveys research on local government mergers in Japan and other countries. Second, it explores the effects of municipal mergers on total expenditure, payroll costs, and spending on legislature per capita, with the focus on elapsed years after the merger and comparison with non-merged municipalities. It is found that previous studies have not obtained consistent results on the effects of mergers on costs, either in Japan or other countries. Examination of the effects of mergers on specific fiscal items demonstrates that spending on legislature declined dramatically in the few years before and after a merger, whereas total expenditures and payroll costs hiked in the year of a merger and dropped one year after, but increased since then onward.

Considering the ideal size of a municipality, there are separate factors seeking expansion and shrinkage. Thus, the ideal size of a municipality needs to be decided while balancing contrary directions. Many studies have investigated the Heisei Merger from the perspective of the economic efficiency of size, which is considered as one of the merits of expansion. However, it is also possible for expansion to bring demerits. For example, one of the potential outcomes of a municipality expanding in size is a lower voting rate. This paper employs a descriptive method to verify the existence and extent of the demerits in the form of “lower voting rate,” which is expected to accompany expansion as a way to help the multifaceted evaluation of the Heisei Merger. As a result of the analysis, it became clear that the voting rate is declining more in merged municipalities than non-merged ones. For future studies, there is a need to conduct quantitative analyses in order to elaborately verify the validity of the results of this descriptive analysis.