Open AccessStrategic Interaction Among Local Governments in J apan: A n Application to Cultural Expenditure
Author(s) -
Akai Nobuo,
Suhara Miki
Publication year - 2013
Publication title -
the japanese economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.205
H-Index - 28
eISSN - 1468-5876
pISSN - 1352-4739
DOI - 10.1111/j.1468-5876.2012.00581.x
Subject(s) - spillover effect , incentive , local government , context (archaeology) , economics , population , strategic interaction , government (linguistics) , public economics , political science , geography , microeconomics , public administration , sociology , linguistics , philosophy , demography , archaeology
In the context of limited local government resources, cultural expenditures are often targeted for reduction. In J apan in particular, with its aging population, cultural expenditures have low priority. This paper examines whether or not local governments strategically influence each other with respect to cultural spending, using data from Japanese local governments. By estimating the reaction functions for local cultural expenditures, we find that there exists free‐rider behaviour between local cultural expenditures that produce beneficial spillover effects. We also find a larger free‐rider incentive the shorter the distance between neighbouring regions, the shorter the travel time between neighbouring regions, and the larger the neighbouring region's population. Furthermore, our results reveal that the provision of cultural services through intergovernmental strategic behaviours is more elastic with respect to the relative change of the distance or the travel time among neighbouring regions than to that of the population size among neighbouring regions.