The Political Economy of Local Fiscal Deficit: Comparison of Five Countries, Japan, United States, United Kingdom, Germany, and France.

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  • 地方財政赤字の政治経済学
  • 地方財政赤字の政治経済学--日米英独仏5ヶ国比較
  • チホウ ザイセイ アカジ ノ セイジ ケイザイガク ニチ ベイエイドクフツ 5カコク ヒカク
  • ―日米英独仏5ヶ国比較―

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The puzzle of this article is why the amount of local fiscal deficits are larger in Japan, Germany and France before privatization (1975-1986) those that in United States, United Kingdom, and France after privatization (1987-2000). The Answer of this article is that the combination of two factors, (1) bond issuance control discipline and (2) market discipline, determine the amount of local fiscal deficits. This is the <bond issuance control discipline + market discipline> hypothesis. First, the bond issuance control discipline means the discipline by central government control for the sum of local government bond. The strength of this bond issuance control discipline is determined by who controls the sum of local government bond in the central government; no government actor, the ministry of internal affairs, or the ministry of finance controls the total amount of local government bond. Second, the market discipline means the discipline by market pressure on local government bond. The strength of market discipline is determined by whether the majority of assumption of local government bond is public funds or private funds. This article demonstrates this hypothesis by quantitative analysis.

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