Munich Personal RePEc Archive

Public investment and the fiscal common pool problem on municipal mergers in Japan

Hirota, Haruaki and Yunoue, Hideo (2019): Public investment and the fiscal common pool problem on municipal mergers in Japan.

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Abstract

The purpose of this paper is to reveal which kinds of public investment cause municipal mergers to create a fiscal common pool problem in Japan. In particular, we focus on whether municipal mergers increase road and public park construction just before the mergers or not because previous papers reveal only that municipal mergers increase local bonds. The empirical results reveal that the subordinate merger partners rapidly increase their road and public park expenses just before mergers.

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