Municipal Amalgamation in Japan …

                      Municipal Amalgamation in Japan


                                     Masaru Mabuchi




                                          Abstract
This paper describes the causes and consequences of post-war municipal amalgamations in
Japan. It shows that recent amalgamations have been inspired in part by the desire to ensure
that municipalities thus formed had sufficient capacity to deliver important public services in
such areas as education, sanitation and welfare. It notes that there may be cost-efficiency
gains associated with amalgamation in that the costs of delivering public services in Japan
appear to be lower for larger municipalities (up to a point). Furthermore, case studies of some
prefectures show that voter turnout in elections is not significantly affected by
amalgamations.




                                     World Bank Institute
Copyright © 2001
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and Development/The World Bank
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Washington, D.C. 20433, U.S.A.

May 2001

The World Bank enjoys copyright under protocol 2 of the Universal Copyright Convention. This
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Municipal Amalgamation in Japan
Masaru Mabuchi
2001. 24 pages. Stock No. 37175
                                     Contents

Foreword v


Overview of Amalgamations: Meiji, Showa and Present Periods 1


Selected Aspects of the Showa Amalgamation 7


Amalgamation and Efficiency 12


Amalgamation and Democracy 12


Looking Ahead 16


Bibliography 17


Notes 18




                                          v
Foreword

This paper was prepared for a project on Local Government Development in Japan. The
project was organized by the World Bank Institute 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. Typically, the experiences of other countries are also
covered in order to ensure that these lessons are placed in the proper context. This
comparative method helps identify factors that influence the effectiveness of specific
institutional mechanisms, governance structures, and policy reforms in different contexts. A
related and equally important objective of the Program is to promote the exchange of ideas
among Japanese and non-Japanese scholars, technical experts and policy makers.

The papers commissioned for this project cover a number of important issues related to local
government development in Japan. These issues include: the process of controlled
decentralization; increasing political inclusiveness; redistributive impact of local taxes and
transfers; allocation of grants; municipal amalgamation; personnel exchanges; personnel
policies; agency-delegated functions; and local policy initiatives.


                                                            Farrukh Iqbal, Program Manager
                                                                       World Bank Institute




                                             v
Municipal Amalgamation in Japan

Masaru Mabuchi
Kyoto University, Japan

Overview of Amalgamations: Meiji, Showa and Present Periods

       The history of the municipality in Japan is that of its amalgamation. In 1883 there were
71,497 municipalities in Japan. From 1883 to 1898, the number of municipalities decreased to
14,289 as a direct result of municipal amalgamation. Five-sixths of municipalities disappeared in
those 16 years. From the end of the last century to 1950, amalgamation efforts continued,
although they were not as conspicuous. The second drastic change took place from 1950 to 1960.
During this period, the total number of municipalities decreased from 10,443 to 3,526. Now there
are about 3,245 municipalities. In this way, the average size of municipalities in square measure
has grown steadily through amalgamation.
       This paper focuses on the amalgamation efforts of the 1950s, because this seems to have
laid the foundation for economic growth and political democracy in postwar Japan. Two
questions will be addressed. First, why could municipal amalgamation be carried out promptly?
Second, what was brought about by municipal amalgamation? Three distinct periods of
amalgamation will be reviewed, beginning with the Big Amalgamation of Meiji, which was the
first such effort on an extensive scale. Two rounds of amalgamation in the postwar period will be
considered. One is the Big Amalgamation of Showa in the 1950s, which is the main focus of this
chapter, and the other is amalgamations after 1961. Before proceeding, it is helpful to note that
amalgamations can be either combinations or annexations. In a combination, a few small
municipalities of similar size are united as a new entity. In an annexation, a large city absorbs its
neighboring small villages and towns. Most of the amalgamations of Meiji and Showa were
combinations, while the majority of amalgamations after 1961 were annexations.

The Big Amalgamation of Meiji
      Most of the municipalities in the early Meiji era were natural villages, as opposed to
administrative entities. Their spheres were narrow and their sizes were small. Of all 70,000
municipalities, approximately 50,000 consisted of less than 100 houses.
      In 1887 the Meiji government decided to establish the local autonomy system by an
enactment of Local Authority Laws. The national government concluded that municipalities
were too small to deal with delegated tasks such as the establishment and management of
primary education, collection of taxes, and registration of residents' addresses in their respective
areas. The government judged that a municipality should contain at least 300­500 houses to be
able to implement these tasks independently. With this rationale, it embarked on consolidating
municipalities. Owing to massive amalgamations under the strong leadership of the national
government, the number of municipalities was reduced to 14,289 in 1898, which is one-fifth of
the number of municipalities before the Local Authority Laws.1




                                                 1
2 Masaru Mabuchi



                   Table 1: Number of Municipalities

           Year              City         Town       Village             Total
           1883              19          12,194     59,284              71,497
           1898              48           1,173     13,068              14,289
           1908              61           1,167     11,220              12,448
           1922              91           1,242     10,982              12,315
           1930             109           1,528     10,292              11,929
           1940             178           1,706      9,614              11,498
           1945             205           1,797      8,518              10,520
           1950             235           1,862      8,346              10,443
           1955             488           1,833      2,885               5,206
           1960             555           1,922      1,049               3,526
           1965             560           2,005        827               3,392
           1970             564           2,027        689               3,280
           1975             643           1,974        640               3,257
           1980             646           1,991        618               3,255
           1985             601           2,001        652               3,254
           1990             651           2,001        601               3,253
           1995             663           1,994        557               3,234
Source: Research Center of Administrative Management 1996, p. 15.

     The Big Amalgamation of Meiji was undertaken so that municipalities could contribute to
the most important and urgent task of the Meiji government--to modernize the Japanese state
under the slogan "Rich Nation, Strong Army." The Meiji government's purpose in the extensive
amalgamation is expressed correctly by Yasuhiko Shima (Shima and others 1958):
      Compulsory amalgamations of municipalities [by the Meiji government] were
      conducted not only for reforming and rationalizing administrative organizations
      rather than for realizing "local autonomy" but also for strengthening municipalities
      as a foundation of the state power rather than for strengthening municipalities
      themselves.

       For these purposes, the municipality was to be charged with such functions as establishing
family registers for tax collection and the military draft. To improve the ability of small
municipalities to carry out such tasks, the government attempted to promote amalgamation of
small villages.
       The Meiji Amalgamation also contributed to the simplification of inter-municipal financial
relations. Prior to the Amalgamation, municipal governments had a multiple-account system.
One account was the main account, budgeted for an individual municipality's affairs, and the
others were special accounts for joint activities with neighboring municipalities. Table 2 shows
the fiscal year 1888 budget of Kanamaru Village of Kashima County in Ishikawa Prefecture.
Kanamaru Village belongs to four inter-municipal organizations and had six budget accounts,
including one account for the upper administrative unit (county) and four accounts for inter-
municipal organizations. Of the total amount, only 17 percent was spent for the independent
activities of Kanamaru Village, and the rest was for the county and special districts. Other towns
and villages in the county were also joining inter-municipal organizations, and therefore had
                                                                    Municipal Amalgamation in Japan 3



multiple-account systems. Amalgamation permitted a rationalization of the budgetary systems
and accounts of small villages.

Table 2: Budgets of Kanamaru Village

                                                                            Number of affiliated
Budget                               Amount(yen)         Share(%)             municipalities
Federation of all municipalities in
Kashima                                  332               49.0                    182
Road district                              26               3.8                     23
Flood control district                   124               18.3                     14
Common administrative duties               62               9.1                      4
Common educational duties                  18               2.7                      2
Proper duties                            116               17.1                      1
Total                                    678              100.0
Source: Shima and others 1958, pp. 60-61..
Big Amalgamation of Showa

       After the end of World War II, Japan experienced a variety of political, economic, and
social reforms under the direction of the General Headquarters of the Allied Forces. The
relationships between the national and local governments also underwent a significant
institutional change. The Allied Occupation aimed at strengthening local autonomy, along with a
policy of democratizing the Japanese polity. In 1949, the Shoup mission examined the
center-local relationship in Japan and concluded that the administrative authorities should be
redistributed among the various levels of government. It particularly emphasized the importance
of the municipality as the underpinning of local autonomy. It reported that if municipalities
found it difficult to operate newly devolved duties efficiently, they should combine with their
neighbors.
       The national government established the Research Council on Local Administration at the
end of 1949 in order to map out the Shoup recommendation and to devolve administrative
activities directly related to the daily life of the residents, such as the operation of primary and
junior high schools, municipal police, sewerage and sanitation facilities, and social security
activities such as poor relief and child care to the municipality. After a year of deliberation, the
council reported that a population of 8, 000 residents should be the minimum size of a
municipality, although it admitted that population would not be the best yardstick for measuring
size, and this number should not be taken as absolute. The reason it took 8,000 as the target was
that municipalities with fewer residents were regarded as incapable of managing junior high
schools, one of the most important duties devolved to the postwar municipalities.2
       The national government launched amalgamation at the municipal level again. It ordered
prefectural governments to promote municipal amalgamation in their respective territories in
January 1951. It also enacted the Law for Promotion of Amalgamation of Town and Village in
1953. As soon as this law expired in 1956, the government enacted a new law, entitled the Law
for Promotion of Constructing New Municipality. The two laws for municipal amalgamation
contained special measures to promote amalgamation. (These will be explained in detail later.)
All of the special measures were applied only to towns and villages, because only small-size
municipalities were encouraged to amalgamate in those days. Until 1961, municipalities were to
4 Masaru Mabuchi



be amalgamated into a total of no more than 3,472, and the goal was almost attained in an eight-
year effort.3
       The Big Amalgamation of Showa was carried out to strengthen local autonomy. It meant,
first, transferring functions previously performed by national or prefectural governments to
municipal governments. The government concluded, however, that most of the existing
municipalities were too small to conduct these activities both autonomously and efficiently.
Amalgamation was considered as a necessary condition for decentralization. To realize this goal,
the government not only enacted the promotion laws, but also established the Headquarters for
Promoting Municipal Amalgamation at the cabinet level.
       As in the Meiji Era, small towns and villages were the main objects of the government's
amalgamation policy. While the Meiji amalgamation pursued a stronger state, the Showa
amalgamation pursued more autonomous local government. In this sense, the two big
amalgamations had opposite orientations. They nevertheless share an important objective. Both
intended to enhance the administrative efficiency of the local government. In summary, the
purpose of the two big amalgamations was to upgrade the general quality of public
administration.

Amalgamations after 1961

       The Big Amalgamation of Showa came to an end in June 1961 when the 1956 law expired.
This did not prevent the government from changing its basic policy, only the means of
implementation changed. Thereafter, the government enacted promotion laws, one after another,
that stimulated a municipality's concern for the expansion of its area. Amalgamations after 1961
were, however, different from previous efforts in one big respect. While almost all cases of
amalgamation in the 1950s were combinations of small villages and towns into larger entities,
most cases after 1961 were annexations by large cities of their neighboring villages and towns.
Such a change reflected an alternation of the government's orientation in amalgamation--that is,
from dissolution of petite villages and towns to an expansion of cities. The government extended
application of the special measures to cities after 1962. To be precise, the 1962 law covered an
amalgamation of two cities, excluding "designated cities," which were those with a population of
one million or more such as Osaka, Yokohama, Kyoto, and Kobe. The 1965 law included an
amalgamation of more than three cities, excluding designated cities. The 1975 law included an
amalgamation of designated cities.
       From 1961 to 1992, there are 231 cases of amalgamation. Approximately 80 percent of
them are classified as an annexation.4 A typical pattern is that a city with the pivotal function in a
certain area as the location of prefectural offices or the central zone of economic activities
merges peripheral towns and villages. About 75 percent of cases follow this pattern.
       The main purpose of these city-centered amalgamations was to facilitate economic
activities by making the administrative boundaries consistent with social and economic activities.
An example that demonstrates the relationship between amalgamation and economic activities is
transportation service. A private railroad company, normally operating across several
municipalities centering on cities, has to apply to all related municipal governments for
permission when it rebuilds the track. It is tremendously time-consuming for the company to
follow the necessary procedures, because the respective municipalities operate on different
standards. Amalgamation permits a decline in the heavy transaction costs that are otherwise
borne by businesses.
                                                                    Municipal Amalgamation in Japan 5



       The amalgamations after 1961 were more consciously proposed to pursue the high growth
policy. In the 1960s, the national government created a legal framework and a variety of national
and regional development programs to promote public finance and investment in new industrial
sites, water resources, transportation, harbors, and industrial infrastructure. Municipal as well as
prefectural governments joined these efforts for industrial investment. They sought to attract
industry through enactment of local ordinances that provided corporate tax breaks and other
incentives for industrial development. Furthermore, new national laws for regional development
were established in the 1960s. In response to these national programs, local authorities compete
with each other to receive designation by the national government as targeted areas for
development. To be designated as targeted areas, leading cities in underdeveloped areas merged
their outlying districts. In short, we can conclude that the amalgamations after 1961 were
oriented toward economic development rather than administrative efficiency.

Case of Kaname Village in the Big Amalgamation of Showa

        The political process of amalgamation of Kaname Village and Hiratsuka City in
Kanagawa Prefecture (Yokoyama and others 1959) is a good illustration of the role of
stakeholders, the differences in residents' positions regarding amalgamation, and the motive for
amalgamation. (Details taken from Keiji Yokoyama and others, 1959.)
        Kaname was a village in Naka County. Its population in 1955, immediately before the
amalgamation, was almost 4,000. The labor force of about 2,000 persons was distributed among
the three sectors: 62 percent in primary industry, 15 percent in secondary industry, and 23
percent in tertiary industry. While the primary sector accounted for the major fraction of
economic activities in Kaname, its share of labor had been decreasing from a high of 67 percent
in 1950. About 280 residents worked outside the village: 100 of these workers commuted to
Hiratsuka City. Kaname Village was in the gradual process of urbanization.
        The residents' lives were lived within the limit of the administrative boundary. In answer
to the question, "where do you buy commodities?" in the questionnaire designed for the 1957
field research conducted by Yokoyama and others, almost all farmers replied either "agricultural
cooperative association in their own village" or "shopping streets in their own village." More
than half of the commuters replied "Hiratsuka City" to the same question, but their share of the
population in Kaname remained marginal.
        It was in 1954 that an amalgamation with neighboring municipalities became an issue in
Kaname Village for the first time. Kanagawa Prefecture took an initiative for an extensive
amalgamation in its area under the administrative guidance of the national government. Some
residents in Kaname also advocated an amalgamation with neighboring municipalities. The
negative attitude of the mayor and the majority of the assembly members to amalgamation,
however, prevented serious discussion of the amalgamation issue in the assembly until late 1956.
During these two years, other municipalities in Naka County, to which Kaname belonged, were
combined, and Kaname was left alone.
        Pro-amalgamation residents organized themselves as the Democratic League and
advocated amalgamation with Hiratsuka City. Recognizing that the majority of the village
assembly opposed the amalgamation, members of the league said they would divide the village
so that only neighborhood communities [Buraku] of the village in favor of the amalgamation
could join Hiratsuka City. They succeeded in mobilizing support in some neighborhood
communities for their "divide and join policy," and presented a petition to the assembly in the
6 Masaru Mabuchi



name of these neighborhood communities. In a resolution attached to their petition, they
maintained the following:
      Kaname Village was forsaken by our neighboring municipalities owing to self-
      opinionated attitude of some village authorities against the national high policy of
      amalgamation. Without paying attention to our isolated situation, they still insisted
      on being independent only to protect their invested interests. Although we had
      several meetings with the Mayor, Chairman and the assembly members and
      explained the necessity of the amalgamation with Hiratsuka City, they neglected our
      proposal. It became clear that our philosophy is completely different from theirs.
      After much consideration for a future of our village, we decide to separate our
      neighborhood communities from other part of the village and amalgamate with
      Hiratsuka City. (Yokoyama and others 1959, p. 64)
         In opposition to the petition of the Democratic League, anti-amalgamation residents
organized themselves as the Village Construction League and presented a petition to the
assembly. In their petition, they blamed the Democratic League for mobilizing compulsory
support from neighborhood communities and contriving to divide the village.
         The village assembly was also split into the two groups. While seven assembly members
were affiliated with the Democratic League, nine members, including the chairman, were
affiliated with the Village Construction League. Six of seven democrats and six of nine
constructionists were landed farmers, and there was no difference in social class between the
assembly members of the two leagues. The difference was in their determination to continue
farming. Most of the constructionists were full-time farmers and were proud of being so. In
contrast, many of the democrats were part-time farmers, and one managed an inn and another
planned to build an apartment house by converting his farmland to nonfarming use.
         It is noteworthy that the difference in attitude toward amalgamation was not based on that
of political partisanship. As shown in Table 3, there was not a significant difference in party
support between the two leagues. While residents supporting the Japan Socialist Party were
slightly more likely to be affiliated with the Democratic League than residents supporting Liberal
Democratic Party, one of the most influential assembly constructionists was a socialist.
         After receiving the two opposing petitions, the assembly, with majority constructionist
membership, adopted the anti-amalgamation petition and rejected the pro-amalgamation petition
in December 1956. This resolution of the assembly became the rationale of the constructionists
against amalgamation with Hiratsuka City.

Table 3: Party Support and Attitude toward Amalgamation (percent)

                                                Attitude toward amalgamation
Party support                        Democratic League        Village Construction League
Liberal Democratic Party             39.0                     32.2
Japan Socialist Party                42.7                     25.4
Source: Yokoyama and others 1959, p. 70.

        After this decision by the assembly, the Democratic League organized a campaign to
distribute bills, collect signatures, and raise funds, which in turn induced the Village
Construction League to conduct similar activities.
                                                                   Municipal Amalgamation in Japan 7



        Since the Democratic League represented a minority in the assembly, it was more eager
to develop its movement outside of the assembly. Its target was properly the commuters, who felt
alienated from village politics. There were about 280 commuters in Kaname, and they were
discontent with "agriculture-centered village policies." They were organized mainly by one
assembly democrat, who was elected with the support of the commuters, and was the only
representative of the commuters in an assembly occupied by farmers. Doctors, teachers, and
owners of small and medium-size enterprises aligned themselves with this camp. The
Democratic League advocated reduction of local taxes, development of educational facilities,
and the stabilization of part-time farmers' livelihoods as material merits of amalgamation. The
common purpose that gave coherence to people driven by a variety of motives was a desire to
change the community power structure drastically through amalgamation, as shown in their
slogans, such as "Let's release the village people from undemocratic control by the ruling class
or pretended democracy" and "Down with the bosses of Kaname."
        At the same time, the Village Construction League argued that amalgamation would
harm their village through the diffusion of custom and the devastation of farmland. Proud of
having taken a pivotal role in developing their village, constructionists were very concerned
about the impact of amalgamation on their rural society. They said "Since Hiratsuka is a
commercial city and Kaname is a farming village, the directions of developments are different
from each other." In contrast to the democrats, who were prepared to accept an ongoing
urbanization of the village, constructionists felt uneasy about it. One of their slogans was "While
Kaname is heaven, Hiratsuka is hell."
        In February of 1957, two months after the December resolution of the assembly,
Kanagawa Prefecture conducted research in Kaname in order to put pressure on the assembly.
After giving a series of hearings to individual neighborhood communities, in March the
Kanagawa prefect made a recommendation that Kaname should be amalgamated with Hiratsuka.
        The recommendation of the prefect gave a strong impetus to the Democratic League. It
also forced the Village Construction League to revise their strategy, although they continued to
insist on the legitimacy of the December resolution as the formal policy of the village. They
began to maintain that the village should join with Hiratsuka City after it completed public works
such as building a public library and a public health center, constructing fire-fighting facilities
and a sewage system, repairing a primary school building, and so forth. In their opinion, the
Kaname area would be put at a disadvantage in public investment after the amalgamation
because it was as the minor partner. They thought they had to build necessary public utilities in
advance. They changed their opinion from anti-amalgamation to conditional amalgamation, or
"planned amalgamation," to borrow their phrase. The mayor also altered his view and told to
officials of Kanagawa Prefecture that he would make efforts to follow the prefect's
recommendation. Confrontation between the immediate and the conditional amalgamation policy
continued until July 1957, when the Kanagawa prefect decided to mediate. He proposed to the
mayor, chairman, and representatives of the two leagues that they entrust him with deciding a
time for amalgamation and negotiating with Hiratsuka City, and obtained their agreement. He
quickly decided that Kaname should join with Hiratsuka City in October 1957.

Selected Aspects of the Showa Amalgamation
      In contrast to the experience of municipalities, prefectures have rejected amalgamation
successfully since 1888, when the local autonomy system was established. During this period,
their borders have been unchanged.5 This stability of the prefecture as an administrative district,
8 Masaru Mabuchi



however, does not imply that a rearrangement of prefectural borders has not been discussed as a
public issue. Before the end of the war, a prefecture government was not a local public body but
a field agency of the national government. As a result of the postwar reform, it became a public
body. Governors who had been national officials, dispatched from the national government,
came to be elected directly by the residents.
       After completion of the postwar reform, plans for reforming prefectures were repeatedly
proposed. There were several types of plans. The most famous one was called Doshu-sei, which
aimed at establishing "regions" along with abolishing prefectures. In this system, the governor of
a region was to be appointed by the national government. This plan came under fire from almost
all directions, because such a change was considered as dilution of the democratization process.
Later, a revised version of Doshu-sei was proposed, in which the governor of a region was to be
elected by the residents, not appointed by the national government. Bills based on this scheme
were actually submitted to the Diet several times. But all these attempts failed, mainly because
any version of Doshu-sei, or any kind of reform plan of prefectural system was, in the minds of
many Japanese, associated with an appointed governor, a symbol of retro gradation of
democratization. The chain of such associations was so strong that all the attempts at prefectural
reform failed. Compared with the stability of prefectural borders, the dynamic change in the
municipal borders is remarkable.
       Second, while the alleged merits of amalgamation--such as efficiency and economy--are
perceived indirectly and realized long after its implementation, its demerits are felt directly and
realized instantly. Some residents of a village may oppose amalgamation with its neighboring
bigger municipality for fear they will be treated as second-class citizen. Others may oppose it
because a new city hall might be located in a inconvenient place for them. Still others may
oppose amalgamation because they fear disappearance of their town name, which they have been
attached to for a long time.
       Third, focusing on the Showa Amalgamation, we can say that it was much more difficult
than the amalgamation after 1961. While in the latter case changing social and economic
conditions came first, and reexamination of administrative borders second, in the former case,
reexamination of administrative borders preceded changes in social and economic conditions. In
the 1950s, most residents of small municipalities that were thought to be candidates for
amalgamation were farmers. Most farmers came to hold their farmlands through the sweeping
redistribution of land of the land reforms of 1946 (about 90 percent of cultivated land was owned
by its cultivator). They also benefited from postwar food shortages, high prices, a black market
in rice, and general inflation. There was an affluent farming population at the time, and residents
of small municipalities could make a comfortable living entirely by farming, and they did not
have to go out for work. Their lives were complete within their own communities. The residents
of the 1950s saw no necessity to change their administrative borders. Therefore, the national
government had to take a pivotal role in the Showa Amalgamation, although they emphasized
the voluntary participation of municipalities. It was nothing but "amalgamation from above." As
a result, there were political struggles over amalgamations in some municipalities.
       In contrast, the amalgamation after 1961 can be characterized as "amalgamation from
below." Figure 1 shows the movement of commuters between the center and the periphery from
the point of the later side, immediately before the two are amalgamated. In this figure, the
periphery is defined as an absorbed municipality in an annexation or a smaller municipality in a
combination, while the center is an absorbing city or a larger municipality. When the rate of
outflow (or inflow) is higher than the national average, outflow (or inflow) is categorized as
                                                                  Municipal Amalgamation in Japan 9



"high." In 71 peripheries, both of the outflow and the inflow are categorized as "high." In 167
peripheries, outflow is "high." This reveals that socioeconomic borders had already been diluted
before the administrative boundaries were changed by amalgamation.
      Most amalgamations after 1961, therefore, could be done voluntarily by municipalities.
More than 90 percent of amalgamations were advocated by mayors, members of municipal
assemblies, residents, and local economic organizations. The role of the prefecture was minimal.


Figure 1: Movements Between Periphery and Center in Post­1961 Amalgamations

                                               Outflows
                                         (Periphery to center)
                                         High              Low
                             High        71(23.3%)          2(0.7%)
Inflows
(Center to periphery)        Low         167(57.2%)         52(17.8%)


National Leadership

      One reason why the Showa amalgamation could be carried out more or less as planned was
because of strong national leadership of the initiative. The national government pursued
extensive amalgamation, using a population of 8,000 residents as a target for its amalgamation
policy. Since more than 60 percent of municipalities held a population of fewer than 5,000
residents in those days, realizing the target required a systematic approach. It made full use of
prefectural governments. Each prefectural government was expected to establish a Council of
Promotion for Municipal Amalgamation and to formulate an amalgamation plan and submit it to
the national government. This plan included a numerical target of municipalities to be
encompassed in its territory. Prefectures recommended that related municipalities to follow the
plan, and the national government monitored the performance of each prefecture (Miyazawa
1955). Although the extent to which the plans were realized varied from prefecture to prefecture,
the overall success rate grew to around 80 percent in October 1955. This suggests that national
and prefectural leadership was very effective on the whole (Shibata 1975).

Special Measures
       Some special political and financial measures also helped to make the amalgamations
palatable to various municipalities. For example, several political measures were introduced to
make exceptions to the rules governing municipal assemblies. The most important was related to
adjustment of the number of the assembly seats. According to the provision in the Local
Autonomy Law, the number of the local assembly seats is set in accordance with its population,
as shown in Table 4. Suppose the rule is applied literally. The number of the assembly seats after
amalgamation would then be fewer than the sum of the seats of the assemblies before
amalgamation. Such a reduction of seats would necessarily lead to rearrangement of electoral
districts. Some incumbent members would be forced to reorganize their constituents and others
would lose their seats in the new assembly. This provision of the Local Autonomy Law gives
incumbent members of the municipal assembly a disincentive to amalgamation. In order to
10 Masaru Mabuchi



remove it, the special measures allowed the amalgamated municipality to organize its electoral
districts in a manner that would not put the incumbent members in an unfavorable position. And
at the first election following the amalgamation, the number of the seats could be set so that it
did not exceed twice the number allowed in the law.


Table 4: Seats of Local Assembly

Population                                  Seats
Under 2,000                                  12
2,000-4,999                                  16
5,000-9,999                                  22
10,000-19,999                                26
20,000-49,999                                30
50,000-149,999                               36
150,00-199,999                               40
200,000-299,999                              44
Over 300,000                                 48

Note: For a city with a population from 300,000 to 499,999, 4 seats are added for every increase
of 100,000. For a city with a population of more than 500,000, 4 seats are added for every
increase of 20,000. The maximum is 100 seats.

       Among financial incentives for amalgamation, one might note certain adjustments in the
application of the Local Allocation Tax to amalgamated municipalities. This is a revenue-sharing
system in which a portion of nationally collected taxes is transferred automatically to prefectural
and municipal governments. It is a method of adjusting imbalances in tax resources among local
governments in order to maintain government services at a certain level in all localities. The
amount of local allocation tax to be distributed to each municipal government is decided
according to a formula which tends to favor small localities on a per capita basis. The amount of
local allocation tax granted to a new amalgamated municipality would usually be less than the
sum of the amounts granted to the component municipalities before amalgamation. This
constitutes a disincentive to amalgamation. Special measures were devised to modify several
factors in the local allocation tax formula so as to remove this "amalgamation penalty".
       Other financial incentives were related to the issuance of local bonds. Local governments
are eligible to borrow money over a long period in order to raise funds. Since bonds could
become a heavy burden for a local government's budget, however, their issuance is under the
strict control of the national government. It considered issuance if bonds in such exceptional
cases as the construction of facilities that could yield profits later and recovery from natural
disasters (see Akizuki 1995). An amalgamated municipality, however, has to do additional work,
such as construction of public facilities and a new municipal hall. To support these tasks, the
national government declared that it would give "special consideration" to giving permission for
bond issuance by newly amalgamated municipalities.
                                                                   Municipal Amalgamation in Japan 11




Domino-Like Diffusion
      Amalgamations were also facilitated by the use of selection procedures which spread the
practice in stages from large cities to suburban areas to outlying rural areas. Hyogo Prefecture
provides an illustration of this effect. At the early stages, amalgamations were done in and
around the two big cities of Kobe and Himeji which lay in this prefecture. During the next stage,
municipalities in suburban areas joined each other. During the last stage, amalgamations were
done in rural areas. Care was taken to ensure that amalgamations took place as far as possible in
geographically contiguous areas. They rarely took effect in a geographically isolated place,
except in the final stage. Thus a sort of concentric pattern of amalgamations was followed.
      There was a logic to this pattern. First, there had been municipalities that wished to
amalgamate with neighbors for their own reasons, before the national government began to
pursue the amalgamation policy. Kobe and Himeji wanted to enlarge their area by annexing
neighboring towns and villages. Some towns that had taken a central position in its region, but
had faced a decline caused by changing economic conditions, chose an amalgamation as a
solution to the problem. Such municipalities would have annexed their neighbors in advance of
national promotion laws.
      Second, the practice of big cities of sounding-out their neighbors on the matter gave
amalgamation the status of a public agenda item in suburban municipalities. They began to
examine the possibility of amalgamation. When it was realized, the result had the effect of
prompting other municipalities to explore their possibilities. When it was not realized mainly
because a city withdrew the proposal, its neighboring village or town sometimes continued to
look for another partner for amalgamation. Even when a village rejected the proposal and chose
to be independent, at least for a while, amalgamation would not completely disappear as an issue.
In such a case, pro-amalgamation residents retained a certain degree of influence over the issue.
If other near-by municipalities succeeded in joining a city, they had much greater enthusiasm for
amalgamation. In sum, activities on behalf of amalgamations in urban areas, regardless of their
consequences, stimulated suburban municipalities. Cities close to Kobe and Himeji in Hyogo
Prefecture were created from 1951 to 1954 under those circumstances.
      Third, activities for amalgamations in suburban areas stimulated thought about the issue in
rural municipalities. When a suburban municipality was annexed by a big city, the result made
rural municipalities in the outer circle of the concentric circles feel isolated. When a suburban
municipality was rejected by a big city and continued efforts to look for another partner, such
efforts inspired neighboring rural municipalities to revise their administrative borders. It was in
such circumstances that towns in the middle part of Hyogo were born around 1955.
      Fourth, once gaining force, the movement toward amalgamation put pressure on
municipalities that had resolutely opposed it. Almost all municipalities began to think they could
not miss the bus. Suppose a village with a population of less than 8,000 had to amalgamate in the
long run. In this case, it would favor the more affluent neighbor. But it was inevitable that a
wealthy municipality was approached by many. If they hesitated, the village might miss the best
partner. Certainly, later it may be able to join a new town that had already been formed by other
villages. In this case, however, it would not have sufficient influence over public decisions in the
town because it was a newcomer. In order to avoid this, the village should make a positive
judgment on the matter early.
      National and prefectural governments seemed to follow a strategy of opening an attack on
municipalities with less resistance against amalgamation. Direct evidence for this consciousness
12 Masaru Mabuchi



is, and is likely to remain, exiguous. But it was certain that they elaborated and implemented
devices to advance--or at least not to break--chain reactions of amalgamation that started
spontaneously in urban areas. The point was to exploit circumstances that made municipalities
reluctant to fall behind in the march of municipal amalgamation.

Amalgamation and Efficiency
       The requirement for efficiency demands a municipality of larger size. At the same time,
smaller municipalities would seem to be better placed to meet the requirement for local
democracy and responsiveness to local residents. Thus, a sort of tradeoff might exist between the
efficiency and democracy aspects of amalgamations. It is instructive to investigate the extent to
which amalgamations in Japan have affected municipal efficiency and aspects of local
democracy.
       It is widely accepted that amalgamation will increase the efficiency of local government.
Effects are sometimes visible. Duplications of public facilities can be eliminated. The number of
local councilors and public servants will be decreased. Nevertheless, it is not easy to analyze
empirically the causal relationship between the scale of municipalities and the efficiency in their
provision of local government services. First, every new municipality spends a large amount of
money on the overhaul of government activities. As a result, par capita municipal total
expenditure tends to shoot up immediately after amalgamation. It is almost impossible to
measure the actual effects of amalgamation in a short term. Measuring it over a longer term
confronts the same difficulty--to distinguish actual effects of amalgamation from other factors
that result from changing the surroundings of local governments and increasing the duties of
local governments during the term examined.
       An alternative to time series analysis is to examine the relationship between municipality
sizes and efficiency levels in the cross-section, that is, at a given point in time. Masayoshi
Hayashi (1995) examined the correlation between per capita local expenditure and population to
see if an optimal size for localities can be determined. His working hypothesis was that the cost
curve would decline to a certain point in size, and then start to rise after hitting bottom at the
optimal size. He analyzed the budgets and populations of 3,259 municipalities in 1991. Twenty-
three special wards of Tokyo were included. He did find an approximate U-shaped relationship
confirming the notion of increasing efficiency up to a certain municipality size and declining
efficiency beyond this size. His data suggest that the minimum value of per capita total
expenditure is ¥289,657, and the corresponding optimal population is 115,109 persons. Given
that the bulk of Japanese municipalities are smaller than this "optimal" size, we may conclude
that there is much room for municipal amalgamation. At the same time, we may conclude that
past amalgamations helped to increase administrative efficiency.

Amalgamation and Democracy
        While the positive effect of amalgamation on administrative efficiency is widely accepted,
it is also generally believed that there is a negative effect on democracy.
        It is argued that the amalgamation will result in the loss of residents' identity, the
destruction of community relationships, and a decline of democratic control over municipal
government. The smaller the size of a political unit, the higher the ability of residents to
influence public policy. The influence of a resident in a village of 5,000 is likely to be 10 times
as strong as that of a resident in a city of 50,000. According to this simple formula,
                                                                 Municipal Amalgamation in Japan 13



amalgamation will weaken democratic control by the residents over public affairs. An argument
of this kind was often made by parties opposing amalgamation.
       This can be true as long as the residents live atomistically in their community. Such a
premise, however, could not be verified, at least in the rural areas of the 1950s. We have to
remember the members and the slogan of the pro-amalgamation group in Kaname Village as
discussed earlier. The Democratic League, consisting of members of the new middle class, such
as commuters, doctors, and teachers who supported the amalgamation insisted that it would
break the traditional community power structure that had been controlled by "village bosses." In
many other villages, advocates of amalgamation justified it as a driving force for political
democratization.
       All of this amounts to saying that theoretically, amalgamation can serve to prevent as well
as to promote democratization, at least in rural areas. We will now examine the relationship
between amalgamation and democracy from three different angles.

The Case of Kameoka City

      First, we will examine a case of Kameoka City in Kyoto Prefecture, which Yasuhiko
Shima (1958) researched. Kameoka Village and its eight neighboring municipalities in Kyoto
Prefecture were united into Kameoka City in 1954. As Table 5 shows, while the number of the
assembly seats of the 9 municipalities before amalgamation totaled 128, there were only 24 in
new Kameoka City. This decreased number of seats made it impossible for each neighborhood
community to send its representative to the local assembly. As a result, the share of agriculture
decreased from 76.6 percent to 58.3 percent, in contrast to an increasing share for doctors and
producers. The changing structure of the local assembly suggests that the amalgamation had a
significant impact on the community power structure. This was not limited to the Kameoka case.
Compared with pre-amalgamation assemblies, as Masaru Nishio (1979) pointed out, post-
amalgamation assemblies included fewer farmers.


Table 5. Structures of Assemblies (number and percent)

Profession                   Nine Municipalities         Kameoka City
Agriculture                      98(76.6%)                 14(58.3%)
Commerce                          10(7.8%)                   0(0.0%)
Construction                       5(3.9%)                   0(0.0%)
Producer                           3(2.3%)                  3(12.5%)
Restaurant                         3(2.3%)                   1(4.2%)
Doctor                             2(1.65)                  3(12.5%)
Executive                          1(0.8%)                   0(0.0%)
Salaried worker                     1(0.8)                   0(0.0%)
Civil servant                       1(0.8)                   1(4.2%)
Unemployed                         4(3.1%)                   2(8.3%)
Total                           128(100.0%)               24(100.0%)
Source: Shima and others 1958, p. 236.
14 Masaru Mabuchi




Amalgamation and Elections
       Second, we would like to examine the relationship between amalgamation and the voting
behavior of residents by processing aggregate data. Here we measure the degree of
democratization with two yardsticks: voting turnout and the party competition in individual
municipalities. There is fairly general agreement that the party competition is treated as a
measure of democratization. How about voting turnout? First of all, a higher turnout does not
always mean a greater degree of democratization. Residents go to the polls only because they are
mobilized by the government, the power elite, or the village bosses. But what I would like to
examine is the following argument: Amalgamation has a negative effect on democracy because
residents tend to feel alienated from politics after amalgamation and to keep away from
elections. If voting turnout after amalgamation remain as high as those before amalgamation, one
must conclude that amalgamation does not always deprive residents of their interest in politics.
       We used results of the election for the House of Representatives in 1963. In order to
compare these results with the amalgamation experience of the individual municipalities, we
categorized towns into six categories, from "no amalgamation" to "more than six." Adding "only
annexation," we have seven kinds of municipalities. In this typology, for example "three
municipalities" is a municipality that was formed by three elemental municipalities that have
united during the period of the Big Amalgamation of Showa. While "only annexation" is a
municipality that was absorbed, "two municipalities" is a municipality formed by the
combination of two municipalities. In the types from "three municipalities" to "more than six,"
annexation and combination are not distinguished.
       Given that amalgamation has a negative impact on democracy, as conventional wisdom
dictates, a municipality composed of a larger number of elemental municipalities should have a
lower turnout and weaker competition of political parties in an election. Otherwise, the
authenticity of the conventional wisdom is doubtful.
       Since we have more than 3,000 municipalities, we decided to choose samples in two ways.
First, we selected four prefectures that are representative in the reduction rate of municipalities
(Chiba, Nara, Okayama, and Yamaguchi) and examined all of their 190 towns. The result is
shown in Table 6. Second, we selected every tenth town from all prefectures, a sample of 218
towns. The result is shown in Table 7.
       In the case of the four prefectures, as Table 6 indicates, the votes of a major party, the
Liberal Democratic Party, in most municipalities fall slightly, and the votes of a second party, the
Japan Socialist Party, rises slightly in most municipalities. It follows that competition between
the two parties becomes stronger in proportion to the number of elemental municipalities. Voting
turnout is steady, at approximately 80 percent.
                                                                  Municipal Amalgamation in Japan 15




Table 6: Amalgamation and Elections: Four Prefectures

                              Votes of major    Votes of second      Party
Type                              party              party         competition         Turnout
No amalgamation                   0.69              0.22              0.32               0.76
Only annexation                   0.72              0.19              0.27               0.80
Two municipalities                0.72              0.20              0.28               0.79
Three municipalities              0.69              0.21              0.31               0.79
Four municipalities               0.71              0.19              0.27               0.80
Five municipalities               0.65              0.23              0.35               0.80
More than six                     0.60              0.29              0.48               0.79
Source: MoHA 1963.

     The result of the analysis based on random sampling is not so striking. In table 7, party
competition becomes weaker in proportion to the number of elements. It must be noted,
however, that voting turnout rises very slightly. All of this evidence seems to argue against the
conventional wisdom.


Table 7: Amalgamation and Elections: Random

                              Votes of major    Votes of second      Party
Type                              party              party         competition         Turnout
No amalgamation                   0.61              0.27             0.44                0.76
Only annexation                   0.59              0.27             0.45                0.79
Two municipalities                0.66              0.22             0.33                0.79
Three municipalities              0.67              0.21             0.31                0.80
Four municipalities               0.68              0.23             0.34                0.81
Five municipalities               0.70              0.21             0.30                0.79
More than six                     0.67              0.25             0.37                0.83

Source: MoHA 1963.

Amalgamation and Progressive Cities

       The early 1970s witnessed rising strength of the Left at the local level (MacDougall 1975).
Governors supported by the Japan Socialist Party and/or the Japan Communist Party were
elected or reelected in Tokyo, Osaka, and Kyoto during 1971. Other "progressive" governors
were elected in Okinawa, Okayama, and Saitama Prefectures during 1972. Similar developments
were seen in the 1960s at the municipal level. During 1963, progressive mayors were elected in
82 cities, including 4 designated cities (Yokohama, Kyoto, Osaka, and Kitakyusyu). The number
of cities governed by progressive mayors rose to a peak of 131 in 1973, equivalent to one-third
of all cities.
    Table 8 presents a distribution of progressive cities between cities created during the Big
Amalgamation of Showa and cities that predate it. We counted cities with mayors affiliated with
16 Masaru Mabuchi



the National Conference of Progressive Mayors (1990) as progressive cities. Twenty-six percent
of new cities and 36 percent of old cities had progressive mayors. While the share of new cities
is lower than that of old cities, it is important to recall that the emergence of progressive
localities was a metropolitan phenomenon. Grassroots protests against new urban
problems--such as pollution-related diseases, traffic congestion, and uncontrolled urban
sprawl--served as the backdrop. Keeping this in mind, it is impressive that more than half of
progressive mayors emerged in new cities and that the populations of these cities were, without
exception, less than 100,000. It seems that amalgamation in the 1950s undermined the existing
conservative power structure and offered the political foundation for the growth of opposition
parties in relatively small cities in the 1970s.

Table 8: Amalgamation and Progressive Cities

Type                        Cities           Progressive cities       Share
New cities                  286                    73                  0.26
Old cities                  272                    97                  0.36

      The three groups of evidence cited show that amalgamation has a rather positive impact on
the democratization of municipal politics, or at least it is democracy-neutral. It is a mistake to
think that amalgamation always weakens democratic control of the residents over public affairs.

Looking Ahead
      Since 1961, when the Showa amalgamation was completed, the discrepancy in the size of
municipalities has been enlarged. The share of municipalities with fewer than 10,000 residents
increased from 50 percent in 1960 to 60 percent in 1995, and the share of municipalities of fewer
than 5,000 residents increased from 10 to 25 percent during the same period. This means that
tiny villages remain, in spite of the amalgamations after 1961.
      There are at least two reasons for this. First, the remaining tiny villages did not become
candidates for annexation by cities because they were located far from cities or had difficulty
realizing their potential to contribute to regional economic development. Second, cities recently
turned against amalgamation. Research conducted by the Osaka Urban Research Institute in
1989 is helpful in describing their position. In response to the question, "have you investigated
the possibility of amalgamation in ten years?," 72 percent of big cities replied "no" (Osaka
Urban Research Institute 1991). To a question "do you think amalgamation deserves carrying
out?," 64 percent replied "no." (Osaka Urban Research Institute 1991). Amalgamation is a
method of integrating administration of a larger region. There are several other methods of
achieving this, such as establishing cooperatives for partial mutual administration, entrusting
business, forming inter-municipal committees, and so forth. According to the research mentioned
above, big cities make full use of such methods to deal with problems beyond their
administrative boundaries. They prefer to create networks with their neighboring municipalities
to absorbing them, mainly because they know amalgamation causes great friction among the
parties involved.
      Tiny villages are now confronted with a greater problem of an aging society than cities
because younger people born and educated in the small villages move to the cities for additional
education and jobs. On one hand, an increasing number of the aged produces greater demand for
social welfare services; on the other hand, a decreasing number of young people generates less
                                                                 Municipal Amalgamation in Japan 17



revenue. Since social welfare services are maintained through face-to-face activities of
caseworkers, the shortage of manpower also becomes serious. Recently the necessity of
amalgamation has been examined in the context of how to obtain the financial and human
resources necessary to maintain a given level of social welfare.
      Promotion of local autonomy remains the rationale for amalgamation. The Promotion
Committee for Local Autonomy proposed, in the second report of July 1997, the introduction of
additional measures to promote amalgamation. The report notes that prefectural government
should give advice and offer coordination for the promotion of amalgamation by "presenting
typical patterns of amalgamation and introducing successful cases." It also maintains that the
national government should make more generous adjustments for amalgamated municipalities in
the application of the Local Allocation Tax. Moreover, it suggests that the national government
devise schemes that will enable representatives of elemental municipalities to participate in the
executive office of the amalgamated municipality. By promoting municipal amalgamation, the
committee intends to devolve administrative activities to municipal government. We may see a
fourth wave of municipal amalgamation before long.

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Notes
1
  Today, the name of an old village sometimes remains as a section name (Aza or Ooaza) in rural areas.
2
  The reason a junior high school was used as a guide for judging a suitable size of municipalities was
as follows: In a junior high school, nine subjects, such as math and science, are taught in Japan. If two
teachers take charge of teaching each subject in the smallest school, there must be 18 teachers. When
he or she works as a classroom teacher, there are 18 classes in the smallest schools. Suppose each class
consists of 50 students; the smallest school has 900 students. If about 10 percent of the population is
attending junior high school, a municipality with 900 students has a population of 9,000 residents.
Thus, the smallest municipality has a to have a population of 9,000.
3
  Among them, six cases were amalgamations crossing prefectural borders. Villages were merged by
neighboring municipalities located in other prefectures that had stronger social and economic relations
with each other (Handbook of Amalgamation, p.42).
4
  More than 90 percent (213 cases) were completed until 1974.
5
  An exception is Okinawa. It was administered by the American military from 1945 to 1972, when it
was returned to Japan.