The Relationship between Utilization of Financial Statements by Local Governments and Their Fiscal Behavior

Haruo Kondoh and Akinobu Ogawa
Additional contact information
Haruo Kondoh: Professor, Faculty of Economics, Seinan Gakuin University; Senior Research Fellow, Policy Research Institute, Ministry of Finance
Akinobu Ogawa: Associate Professor, Faculty of Economic Sciences, Niigata University

Public Policy Review, 2023, vol. 19, issue 2, 1-24

Abstract: Local public accounting reform has been promoting for the purpose of reforming assets and liabilities, among other purposes, but studies in Japan that have quantitatively analyzed the effects of this reform has focused only on whether financial statements are prepared or not. This study conducts a quantitative analysis on the effects of local public accounting reform initiated in 2006 by the Ministry of Internal Affairs and Communications (MIC), focusing not only on whether financial statements are prepared, but also on how the financial statements are utilized and the status of preparation for fixed asset ledgers. The results of the analysis using panel data of municipalities from FY2010 to FY2014 or from FY2011 to FY2015, revealed that the use of financial statements by local governments to set fiscal management targets is effective in controlling the increase in primary expenditures in such local governments, and that the preparation of fixed asset ledgers by local governments as a part of the process of preparing financial statements is effective in controlling the rise in expenditures on ordinary construction works.

Keywords: local public accounting reform; local expenditures; asset management; use of financial statements (search for similar items in EconPapers)
JEL-codes: H72 H83 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.57520/prippr.19-2-3 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mof:journl:ppr19_02_03

Access Statistics for this article

More articles in Public Policy Review from Policy Research Institute, Ministry of Finance Japan Contact information at EDIRC.
Bibliographic data for series maintained by Policy Research Institute ().