Regional Governance in Japan

This chapter explores the effectiveness of horizontal and vertical cooperation among local governments for the sustainability of local governments in Japan’s regional governance structure. Local governments in Japan encompass both prefectures and municipalities. While prefectural governments have remained unchanged since 1888, municipalities have undergone three significant mergers and, recently, have been promoting shared services through horizontal cooperation with other municipalities. Despite the widespread adoption of shared services, a substantial number of municipalities in Japan face notable deficiencies in policy resources, raising uncertainties about the actual enhancement of local government sustainability. Currently, the central government promotes intermunicipal cooperation (IMC) as a means of enhancing municipal sustainability; however, to the best of our knowledge, the effectiveness of this approach has not been thoroughly explored. Leveraging the institutional collective action (ICA) framework for municipal relations in Japan, this chapter discusses integration forms, transaction costs, and collaborative benefits for IMC, and identifies the limitations of IMC. In addition, the chapter empirically examines the limitations of the effectiveness of prevailing measures aimed at fostering horizontal IMC among local governments. It delves into emerging trends in vertical IMC, such as the support provided by prefectural governments to municipalities, offers insights into the prospective landscape of Japan’s regional governance.