Information sharing, neighborhood demarcation, and yardstick competition: an empirical analysis of intergovernmental expenditure interaction in Japan
Masayoshi Hayashi and
Additional contact information
Wataru Yamamoto: University of Tokyo
International Tax and Public Finance, 2017, vol. 24, issue 1, 134-163
Abstract The Japanese government provides information on local fiscal performance through the Fiscal Index Tables for Similar Municipalities (FITS-M). The FITS-M categorize municipalities into groups of “similar localities” and provide them with the fiscal indices of their group members, enabling municipalities to use the tables to identify their “neighbors” (i.e., those in the same FITS-M group) and refer to their fiscal information as a “yardstick” for fiscal planning. We take advantage of this system to estimate municipal spending function. In particular, we examine whether the FITS-M help identify a defensible spatial weights matrix that properly describes municipal spending interactions. Our analysis shows that they do. In particular, geographical proximity is significant only between a pair of municipalities within a given FITS-M group, and it does not affect competition between pairs belonging to different groups even if they are located close to each other. This would suggest that the FITS-M work as intended, indicating that spending interaction among Japanese municipalities originates from yardstick competition and not from other types of fiscal competition.
Keywords: Fiscal interaction; Local government expenditure; Yardstick competition; Fiscal federalism; Japan (search for similar items in EconPapers)
JEL-codes: H72 H73 H77 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s10797-016-9413-4 Abstract (text/html)
Access to full text is restricted to subscribers.
Working Paper: Information Sharing, Neighborhood Demarcation, and Yardstick Competition: An Empirical Analysis of Intergovernmental Expenditure Interaction in Japan (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:kap:itaxpf:v:24:y:2017:i:1:d:10.1007_s10797-016-9413-4
Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/10797/PS2
Access Statistics for this article
International Tax and Public Finance is currently edited by Ronald B. Davies and Kimberly Scharf
More articles in International Tax and Public Finance from Springer, International Institute of Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().