Does Inter-municipal Cooperation Lead to Municipal Amalgamation? Evidence from Japanese Municipal Referenda

Are citizens more likely to vote to approve municipal amalgamation in municipal referenda when their municipalities conduct joint public works with their potential amalgamation partners? Joint works are considered to deepen mutual understanding between the citizens of municipalities during cooperation, and hence persuade them to approve of their amalgamation. In contrast, the greater the number of joint works already executed between neighboring municipalities, the fewer the number of public services that citizens feel could possibly be made more efficient through amalgamation. Hence, citizens might feel less of a need for amalgamation. This paper presents an empirical analysis of this question using data from inter-municipal cooperation in the provision of public services, as well as from municipal referenda on amalgamation in Japan. Although most previous studies have used data on whether neighboring municipalities became amalgamated, such data do not tell us how strongly each municipality sought this status. In particular, when a municipality did not end up becoming amalgamated with its neighboring municipality, we do not know whether the municipality declined by itself or if it tried amalgamation, but the neighboring municipality declined. Our data on referendum outcomes enable us to determine the percentage of citizens in each municipality who supported amalgamation. The number of joint works being carried out with neighboring municipalities also differs sufficiently among Japanese municipalities, which is advantageous for performing empirical analyses. Our empirical findings indicate that the more intensively municipalities provide joint public services with neighbors, the more likely they are to vote against amalgamation: Citizens hope to maintain their independence if the joint provision of public services with neighboring municipalities is working well. Although local governments often regard inter-municipal cooperation as a first step towards municipal amalgamation, our empirical outcomes show that intensive inter-municipal cooperation tends to favor municipalities’ independence.