Do mentoring and oversight matter? The effects of allocating central administrators to local government units: evidence from Japan

Nobuhiko Nakazawa

The Journal of Law, Economics, and Organization, 2024, vol. 40, issue 2, 338-361

Abstract: During the 2000s, Japanese bureaucrats were actively transferred away from the central administration to mentor and monitor local governments. Using a dynamic difference-in-differences model under heterogeneous treatment effects that exploit the timing of these transfers and a rich city-level panel dataset, this study finds that municipalities with transferred central administrators improve their fiscal discipline, mainly by shrinking expenditures. The effects are persistent and continue for years after the arrival of the central administrator and even after the transfer ended (JEL H72, H74, K34).

Date: 2024
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