Political mergers as coalition formation: An analysis of the<i>Heisei</i>municipal amalgamations

Weese, Eric

doi:10.3982/qe442

Cited by 48 publications

(35 citation statements)

References 49 publications

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“…Previous work on more recent Japanese municipal mergers includes Hirota and Yunoue [2014], Miyazaki [2014], and Weese [2015]. The techniques used and results obtained in these papers differ substantially from those presented below.…”

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confidence: 47%

“…Miyazaki [2014] uses data on municipal referenda. Weese [2015] considers recent Japanese data where the central government provides equalization payments to municipalities. Inefficiency in this environment arises due to the presence of asymmetric information regarding the benefits of potential mergers.…”

mentioning

confidence: 99%

“…Gordon and Knight [2009] use a simulation GMM estimator with data that contains pairwise mergers. Parameter estimation in Weese [2015] relies on special financial merger incentive policies of a known form, combined with substantial auxiliary data.…”

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confidence: 99%

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Inefficiency and Self-Determination: Simulation-Based Evidence from Meiji Japan

2015

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in August 2015Abstract Does the exercise of the right of self-determination lead to inefficiency? This paper considers a set of centrally planned municipal mergers during the Meiji period, with data from Gifu prefecture. The observed merger pattern can be explained as a social optimum based on a very simple individual utility function. If individual villages had been allowed to choose their merger partners, counterfactual simulations show that the core is always non-empty, but core partitions contain about 80% more (postmerger) municipalities than the social optimum. Simulations are possible because core partitions can be calculated using repeated application of a mixed integer program.Does exercise of the right to self-determination result in an efficient arrangement of political boundaries? There is substantial theoretical interest in this issue both inside and outside of economics, and recent world events, such as the Russian annexation of the (apparently consenting) Crimean peninsula, suggest policy relevance. 1Empirical results regarding the efficiency of jurisdiction formation, however, are very limited. This paper considers a historical set of municipal mergers in Gifu, Japan, that were decided by a central planner in the late 19th century. We show that the observed pattern of * Portions of this paper were originally presented as "An Errors-in-Variables Model for Graph Outcome Data" at the Econometric Society Far East meeting. In addition, some ideas were present in the job market paper version of Weese [2015], but were removed during the publication process. We thank seminar participants at various seminars. In addition, the paper has benefitted greatly from discussion with Steve Berry, Jeremy Fox, Hide Ichimura, Yuichi Kitamura, Tsunetoshi Mizoguchi, Kei Okunuki, and Larry Samuelson. Julien Clancy provided excellent research assistance with an earlier version of the model. Portions of this research were conducted at

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Inefficiency and Self-Determination: Simulation-Based Evidence from Meiji Japan

2015

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“…This implies that the changes in the size distribution of municipalities need to be examined from a different aspect to either Gibrat's law or Zipf's law. Weese (2008Weese ( , 2013 analyzed the municipal mergers in the Heisei era associated with a process of coalition formation. He focused on the Heisei consolidation's decentralized mergers and showed that such mergers resulted in a less efficient outcome than the central government had expected before the mergers.…”

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confidence: 99%

Municipal sizes and municipal restructuring in Japan

Nakagawa

2014

Lett Spat Resour Sci

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractIn this article, we quantitatively analyze changes in the size distribution of municipal jurisdictions in Japan by using their rank-size distribution to capture the changes. In Japan, the central government sometimes enacts large-scale municipal mergers, aimed at creating municipalities of a certain size. Japan's local governance policy allocates tax revenues to municipalities based on the financial shortages of each municipality, which is designed to ensure financial equality among municipalities so that the central government can evenly maintain public services, especially in rural areas. Thus, if the central government eases population discrepancy among municipalities and creates a large number of uniformly sized municipalities, then the central government can reduce subsidies to local governments. The government's previous policies on municipal mergers were enacted to foster this sort of efficiency. We examine changes in the distribution of municipal jurisdiction sizes to determine the actual effect of municipal merger policies. Our results show that the discrepancy in population among municipalities was once leveled by the great municipal mergers of the 1950s Showa era.

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“…Similar issues emerge when considering efficient borders at the subnational level. For instance, Weese (2015), in his study of political mergers as coalition formation, considers an application to Japanese municipalities, and finds that the national government could increase welfare via a 'counter-intuitive policy' that would involve transfers to richer municipalities conditional on their participation in a merger.…”

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confidence: 99%

The economics of political borders

Spolaore¹

2016

Economic Analysis of International Law

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Political mergers as coalition formation: An analysis of theHeiseimunicipal amalgamations

Cited by 48 publications

References 49 publications

Inefficiency and Self-Determination: Simulation-Based Evidence from Meiji Japan

Inefficiency and Self-Determination: Simulation-Based Evidence from Meiji Japan

Municipal sizes and municipal restructuring in Japan

The economics of political borders

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