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How Did Fiscal Consolidation of Izumisano City Affect the Population ?

2016; The Japan Section of the Regional Science Association International; Volume: 46; Issue: 3 Linguagem: Inglês

10.2457/srs.46.309

1880-6465

R. Ogawa, Shin Kimura,

Housing Market and Economics

How does a local government’s fiscal consolidation affect the population ? This paper provides a case study of Izumisano City, where there has been a long-term attempt to improve fiscal conditions. The economy and financial sector of Izumisano City have previously faced shocks from two fiscal crises. The first was the spontaneous declaration of a fiscal emergency at the end of FY2003, and the second was the forced designation by the central government of a “fiscal consolidation municipality” in FY2009. These crises led the city to make new plans for fiscal consolidation. The analysis presented in this paper confirms that the benefit-cost ratio of public service provisions declined in the fiscal year following each of the two crises, relative to two groups of similar municipalities.