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Taxes and transfers in Japan’s local public finances (Inglés)

A strong inter-regional equity bias has been a distinctive feature of the Japanese local public finance system. This paper shows that substantial equalization of revenues per capita is achieved via transfers from the central government and that, over time, this appears to have substantially improved the regional distribution of income : the Gini coefficient of per capita regional income declined from around 0.17 in 1950 to 0.10 in 1990. Now that considerable regional equality has been achieved, a greater concern for the exercise of local preferences is being voices. This paper was prepared for a project on Local Government Development in Japan. The project was organized by the World Bank Institute (WBI) under the auspices of the Program for the Study of Japanese Development Management Experience financed by the Policy and Human Resources Development Trust Fund of the Government of Japan. The principal objectives of this Program are to conduct studies on Japanese and East Asian development management experience and to disseminate the lessons of this experience to developing and transition economies.

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