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Edited by: The City Planning Institute of Japan,
International Affairs Committee

No.24 May 2005

(Member Yasuyuki FUJII)

Municipal Mergers and City Planning
Table of Contents
1. Editor’s Preface

Yasuyuki FUJII

2. Municipal Mergers and the National Structure

Takashi ONISHI

3. Urban Management and the Outlook for Regional Government

Yasuo SAWAI

4. Municipal Mergers and Urban Planning Districts

Atsushi YANAGISAWA

1. Editor’s Preface
Yasuyuki FUJII
Today, municipal mergers are the greatest concern of
local governments in Japan. Many municipalities
throughout Japan completed mergers within the March
2005 time limit required by the national government’s
incentive program. Many more candidate mergers
finished required procedures and are ready to be enacted under the same incentives by the end of this fiscal
year, which is March 2006.
As can be imagined, municipal mergers encompass
many difficult issues: post-merger reductions in thenumber of public officials and assembly members,
integration of municipal information systems, selectionof a location for the new city/town’s administration,and the naming of the newly-created municipality. In
particular, the selection of a new name is a sensitive
issue due to local histories. Further, while the assumption is that the mergers are taking place between
equals, irrespective of population sizes, most communities tend to perceive that one party is acquiring theother, or that one of the parties is being subsumed.
This edition of CPIJ Newsletter tries to draw a broad
picture of how ongoing municipal mergers should be

Mizuho Information and Research Instituteunderstood and dealt with from the city planning perspective. Certainly, municipal mergers hold a varietyof consequences for city planning. I have chosen here ageographical approach, going from national structure
and regional governance, to practices at the local level.
All three of the contributors are leading authorities
on their respective topics. Dr. Onishi stresses thatmunicipal mergers are an integral issue in the new
regional divisions being considered for the national
structure. Dr. Sawai, proposing a three-tier local government system made up of regional blocks, prefectures and municipalities, emphasizes the importance ofcooperation between municipal governments and theircitizens. Finally, Mr. Yanagisawa explains the thorny
practical issue of mergers of municipalities that implement development zoning with those that do not.
Local governmental systems are unique from one
country to another. In this sense, it may be safe to saythat no optimum solution exists. I sincerely hope thatthe recent Japanese experience with municipal mergers
is of some interest and of some use to readers abroad.

2. Municipal Mergers and the National Structure
Takashi ONISHI
1. The Evolution of Municipal Mergers in Japan
With the introduction of a modern municipal government structure to Japan in 1889, the number ofmunicipalities nationwide was reduced to just one-fifthof pre-Meiji levels, or about 15,859 (the Great Municipal Merger in Meiji Era). A more gradual decline
continued through ;the first half of the next century,
until by 1953 there were just 9,868 local jurisdictions.
The subsequent need to establish and supervise a new
junior high school system, local fire and police departments, and provide regional social welfare andhealth services drove further mergers, as authorities
targeted a minimum population of 8,000 as the sustainable size for a local government. By 1961, thenumber of municipalities was down to one-third of the1953 number, or 3,472 (the Great Municipal Merger in
Showa Era).
The next three decades saw little change, but as theend of the millennium approached, the government
once again took action to promote regional mergers,
this time with an eye to helping local administrations
overcome looming financial crises. In 1999, a majorrevision to the Special Law on Municipal Mergers was
passed, providing for special breaks to newly mergedmunicipalities, an offer which was set to expire in
March, 2005. As of January, 2005, the number ofmunicipalities nationwide had fallen to 2,869; if all
currently planned mergers take place before March,2005 as scheduled, that number is expected to be reduced further to about 2,300. (The Great Municipal
Merger in Heisei Era). In total, the number of regional
governments in Japan has fallen to just one-thirtieth ofwhat it was 120 years ago; this is still seen as an excessive number, and plans are moving forward formore mergers, even after the expiration of the Special
Law.
What, then, is the “right” number of municipalities
for a country of this size? In fact, that question is noteasily answered. Looking at other countries around theworld, the number of core regional governments varies
widely. At the high end, France has 36,600, Germany
16,100, and America has 35,900, but at the other extreme there are countries like England, with even fewer

Professor, The University of Tokyo
than Japan at only 484. Overall, most major nations
seem to have proportionately more local municipalities
than Japan. Even looking at the average population permunicipality, the only countries with a higher averagethan Japan’s 38,300 are Ireland (pop. 3.57 million),
New Zealand (pop. 3.55 million) and England (pop.
58.49 million). Thus, at least from the point of trying
to determine an ‘appropriate’ number based on theexperience of other nations, there is no real justification
for continuing to promote local mergers in Japan. The
real driver of the latest merger wave has not been statistical, but fiscal: the accumulating red ink generated
by the system for distributing central government tax
revenue to regional governments. Under the Japanesesystem, these distributions from national revenues areintended to fill the gap between what municipalities,
prefectural, and city governments collect in local
revenue and their basic annual operating budgets. As aresult, should the nationwide total of that gap, or theregional budget shortfall, exceed the central government’s tax allocation for distribution, the allocationbudget itself falls into the red, and the government
needs to borrow money to fulfill its obligation to thesystem. Today, critics point out that while these grants
to local governments now exceed 20 trillion yen peryear, the cumulative debt for the allocation system isnearing 40 trillion yen, putting it at the brink of collapse. The government continues to promote regional
mergers in the hopes that larger municipalities will beable to build stronger fiscal foundations, enabling thecentral government to reduce the amount it must contribute from tax revenues.
Still, it goes without saying that coming up with the‘right’ number of regional governments is not just an
exercise in fiscal analysis; a second crucial factor lies
in how a country chooses to serve its citizens, bybringing government closer to them, and responding
carefully to their needs and concerns. From this pointof view, smaller, more accessible municipalities withfewer disruptive changes would seem to be the mostdesirable. Being smaller, of course, means that basic
fixed costs can become an increasingly heavy burden
for these governments, and it is important that they
operate within a larger regional framework to achieve

greater fiscal efficiency. Thus, while a very large municipality like Yokohama may find itself dealing primarily with internal issues, smaller unconsolidated
cities and towns will increasingly face questions ofwider regional administration.

old county-based system, and their structure today may
be at odds with the more objective decision-making
that later went in to establishing local divisions basedon social concerns such as school populations orcommuting patterns.

2. National Structure and Multi-district Initiatives
With local municipalities and prefectural and city
governments as a foundation, national and regional
planning has begun to move toward establishingmulti-district divisions and configurations: regional
development that encompasses several prefectures ormetropolitan areas (i.e. the Tokyo Area Basic RegionalPlan), or planning that incorporates multipleneighboring cities and towns into larger regional
communities.
Administrations overseeing thesebroader regions have largely been given responsibility
for establishing and managing everything from transportation infrastructure to shared regional facilities
within their purview. In the same sense, the latest waveof municipal mergers is expected to bring the greatest
changes in scale to those newly formed communities
composed mostly of smaller cities and towns. Even
after the major consolidations of the Heisei era arecomplete, there will still remain significant differencesin size between various municipalities, and considerable gaps between the geographic range of peoples’
daily activities (commuting, going to school, shopping,
hospitals, etc.) and the size of the communities where
they actually live. For smaller local governments toeffectively address these concerns, it will be essentialthat they continue to work together to establish spheresof cooperation based on the needs of the wider regional
population.

With the expiration in March, 2005 of the special
treatment for mergers under the revised Special Law, it
is hoped that general discourse on the future of ourcities and towns will move away from merger issues,
and more towards a focus on alliances and broader
regional relationships. When discussing the formationof multi-district authorities, for example, commuters as
a percentage of the total regional population is usuallyconsidered a reasonable benchmark number. When amajority of the labor force in one city commutes toanother city for work, their own city becomes, in effect,a bedroom community of the other, and is subsumed in
the larger municipal embrace of this ‘mother’ city.
While there are various arguments for how to go about
selecting a ratio of commuters that defines such a dependent relationship, if one sets the bar too low, therelationship between the ‘mother’ city and its dependent turns cumbersome and complex; set the ratio
too high, and the metropolitan center shrinks and one
ends up with an excessive number of stand-alone municipalities. Research tends to support a benchmark
commuter population ratio of between 5-10%, resulting in anywhere from about 100 to fewer than 300
metropolitan areas, depending on the country. Still, if
one considers that the role of regional administrations
is to both complement and supplement other government services, then the areas most urgently requiringsuch supplementary support are, rather, the more under-populated regions. It is difficult to develop a regional model for such areas without extending thebenchmark ratio beyond the commuter population
figure, to include such factors as the need for trips tothe hospital, or for daily shopping.

Working to develop and implement rational planningby first setting standards for physical and social infrastructure based on a set of common geographic orlifestyle needs probably makes sense. However, inJapan, local government is imbued with an increasingly
higher level of administrative authority and local
law-making ability; as decentralization of government
authority has progressed in recent years, the focus on
local identity continues to be reinforced, with the resultthat multi-district regional administrations have begun
taking a back seat to local needs. In reality, the formation of these districts was in many respects influenced by the original geographic divisions under the

Today in Japan, there is talk of doing away with theComprehensive National Land Development Act
which has been in place for 55 years, and putting forward an entirely new plan for the country. The statedgoal of the revision efforts is to finally make the transition away from a national plan that focuses only on
development, to one that has conservation, use, andmanagement of the land as its key concepts. Further,

the debate seems to be moving toward a plan that splits
the country into new regional divisions. It is imperative that in order for the needs of all of the nation’s

local communities to be reflected in the new planning,regional administrations begin coming together tomake sure their voices are heard.

3. Urban Management and the Outlook for Regional Government
Yasuo SAWAI
1.The need for administrative reforms(1) Trends toward reform in government
Since the latter half of the 20th century, much of theworld has been transformed from a largely industrialized society to one based on the value of knowledge
and information, and along with the spread of globalization across virtually all fields, this has ushered inperhaps the greatest period of socioeconomic upheaval
in history. In the West, the major countries of theEuropean Union have moved toward the elimination ofborders and the completion of their plan for European
unity, while elsewhere the emergence of global,
knowledge-based economies has driven innovation inpolitical, social, and economic realms. Internally, thesechanges have also prompted a fast-paced shift toward amore decentralized political architecture, with astrengthened emphasis on regional authority as thebasis for the national politic. This process has resulted
in stronger ties between regional governments, local
economies, and the private citizen, and a push toward
greater regional economic activity that has helped torevitalize the economy of nations as a whole. As canbe seen in the many success stories coming out of theEU, vigorous civic networks, supported by active local
economies in a decentralized sociopolitical framework,
can contribute far more to building a dynamic socialand economic foundation than was possible with thehighly centralized models of the past.
Meanwhile, in Japan, the end of the millennium saw
the development of decentralization efforts at the national level, driven by an increased awareness of regionalism among local governments, and by the example of decentralization movements seen throughout
the European Union. As regional entities have continued to evolve, the government is now pushing forward with the “Great Municipal Merger in Heisei Era,”a reconfiguring of cities and towns promoted as thebest way to build local municipal management abilities
and pave the way for continuing decentralization.

National Institute for Research Advancement

Today, the momentum created by this large-scale realignment of municipalities is driving greater discussion among government bodies, political parties, local
governments, and private sector think tanks about how
best to create a new system that effectively combines
both centralized and regional approaches, enabling
Japan to overcome the challenges it faces in its own
period of historic upheaval.
(2) The direction local government should takeCommonalities may be found among strategies forgovernment reform, whether they be innovations tocentral or local systems. First, at the national level, it isnecessary to redesign existing government structures tocreate a slimmer, more policy-focused organization,better able to deal competently with complex international issues, and with strategies for addressing
mounting domestic challenges such as fiscal crises andsocial security. At the local level, the effort is toward
establishing a regional authority that is empowered bydecentralization, and that by building close ties withboth local citizenry and private industry, is able todynamically address and solve critical issues such as
falling long-term population growth and reduced economic vitality. Particularly at the local level, which
has seen a wide variety of proposals for new regional
systems, the NIRA (National Institute for Research
Advancement), a research group focused entirely on
public policy issues, has crafted its own picture of what
local government systems might look like as ourcountry moves toward an increasingly decentralized
model.
Today, Japan has a two-tier government, with acentral administration on one level, and prefectural andmunicipal administrations on the other. We propose
replacing this with a three-tier system, under which thenation is divided into large regional blocks which willassume many of the key functions of central government; slimmed-down prefectural governments which

will act primarily as a supporting layer between theregional blocks and smaller municipalities; and municipalities, which will take on all aspects of providing
services directly to the citizenry. Adding another layer
may seem counterintuitive; in fact, given the trend incentral government to slim down and push more tasks
out to branch offices and agencies, the continued
shrinking and increased specialization of prefecturalfunctions, and the decrease in the total number of municipalities through mergers, this structure makes it
possible to generate effective reforms across government. Compared to two-tiered regional systems, which
effectively puts the mandate for regional administration entirely at the prefectural level, the three-tier system makes it possible to maintain the principle of subsidiarity, placing the most essential government functions closest to the people. From a purely democratic
point of view, it also makes sense to use a three-tierstructure to give the prefectures, which are historicallythe most well-established government unit in the peoples’ minds, a new role for the near future. The model
further envisions identifying those cities established bygovernment ordinance as special entities, endowedwith the functions of both the prefecture and the municipality. Finally, regarding the national capital, avariety of approaches have been suggested, fromturning Tokyo into a separate “state,” to creating a
special regional authority or alliance, similar to theGreater London Authority, which would carry much of
the responsibility for regional coordination, to breaking
out only the central metropolis as a distinct capital citywith its own administration.
2.Local governance and urban management(1) Citizens and the community will lead municipal
governanceTaking into consideration the trend toward increased
worldwide urbanization, and the increased presence ofurban governments as a result of municipal mergers,
further decentralization will put city administrations, as
the entities closest to the public, in the critical role ofdelivering comprehensive government services to the
public. Further, a parallel movement toward increased
involvement of local communities, NPOs, and citizens
in the political and economic life of their cities isbringing about the creation of new kinds of so-called‘network governance’ and ‘social governance.’ As
Robert D. Putnam of Harvard University pointed out in
his work examining the roots of growth in northern
Italy, these ‘networks of civic engagement,’ supported
by trust and reciprocity, can actually work to improve
the performance of the system as a whole.
(2) A new paradigm in urban management
When looking at the future of urban management inJapan, it is necessary to assume that new forms ofgovernance will be both highly decentralized andstrongly influenced by a more associative democracy.
At the same time, it is important to remember that,beginning around the year 2006, Japan is also likely toenter a long period of continued population decline.
Already, many regional cities have entered what Leo H.
Klaassen of the Netherlands refers to in his theory of
the urban cycle as ‘de-urbanization,’ where an entire
metropolitan area begins seeing population losses,
accompanied by the social problems associated withgeneral regional decay and loss of vitality. The revitalization of these cities will require proactive management that makes best use of regional culture andresources to strengthen regional identity; such an effort
can only be realized with the cooperation of all of thelocal players: the community, citizen groups, local
business, and government, working in concert to createa framework for governance that encompasses theentire region. Further, to assure that local governments
are able to create and implement plans based on theirunique needs, the entire foundation of urban planningand land use provisions must transition away from thestandard specifications that characterized the highly
centralized policies of Japan’s rapid economic andpopulation growth years, and toward a framework that
focuses on locally optimum choices, allowing regional
planners to select the policies that best fit their circumstances. With such a framework in place, regional
governments and residents will be free to draw theirown visions of the future, designing flexible, cooperative strategies that are not bound by the conventions of
the past. This will represent a whole new style of decentralized, participatory municipal management.

4. Municipal Mergers and Urban Planning Districts
Atsushi YANAGISAWA
I’ve been asked by the editors to discuss urban
planning districts as they relate to municipal mergers.
As I think about it, though, it is clear that this is anapples-and-oranges proposition: traditional urban
districts come out of planning ideas that are based
primarily on theoretical concepts, where as the discussion of municipal mergers is far removed from intellectualizing, and driven by real-life political decisions.
Thus, I’d like to respond to the editors by trying toanswer two questions: what exactly are urban planning
districts, and what kind of relationship should exist
between them and municipal entities.
1. The role of urban planning districts
Currently, the roles that urban planning districts playcan be divided into three general areas:
1. To define a physical area within which basic data
used in urban planning can be collected and analyzed.
2. To define a physical area within which enterprises
and regulations are implemented based on the established plan.
3. To define a physical area for tax collection, whichrevenue goes to pay for government costs related to
implementing the plan.
However, as is noted below, given current socioeconomic conditions, it has become increasingly difficult to justify these roles as being truly effective; inshort, we may be at the point where a complete
re-thinking of the need for urban planning districts isnecessary.
(1) Planning districts for data collection and analysis
Because urban planning is essentially an exercise in
implementing a physical plan in a pre-defined space, aphysically delimited space becomes a requirement for
implementation. Of course, analyzing and understanding the environmental, social and other conditionsof the district is also a prerequisite of the planning
process, and conducting such advance research andanalysis is actually required by law under Section 6 of
the City Planning Code. The law goes on to further

C- Town Planning Officerequire that population size, size of labor force by occupation, urban district total area, land use, traffic
volumes, and other parameters be re-measured every
five years, and that the results of such updates be usedas the basis for any subsequent changes to the masterplan (ref. Sections 6.1, 13.1.18, and 21 of the Code).
This data, once collected, provides a wide-ranging
and detailed picture of the surveyed district, and serves
as valuable material in the urban planning process. In
many cities, though, in part because of the effects ofgreater mobility in a motorized society, there is a
growing disjoint between the original urban district as
defined for planning purposes, and the actual district as
it has expanded incrementally over time; it may nolonger be sufficient to gather and dissect data based
only on the traditional urban district boundaries. This
is why we see an increasing number of prefectural andmetropolitan governments expanding the range of theirdata collection and review to a few, much broader divisions within a prefecture, and a times even defining
the entire prefecture as a single “district.”(2)Planning districts as places for implementationof plans, regulations, and enterprises
Planning districts are useful in that they provide aframework for the systems required by the Planning
Code (districting, block divisions, urban facilities,
urban development projects, local planning, etc.).
Further, with a few exceptions such as certain facilities
that might be made available outside of the establisheddistrict, or zoning districts that might cross into a suburban planning region, the Code specifies that allcomponents of the district plan be implemented entirely within the district itself. Additionally, the collective building codes governing the development
permitting and construction zoning processes also
primarily target the Urban Planning District.
These are probably the most critical functions of the
Urban Planning District within the overall system.
However, many of the enterprise aspects of the urban
plan are seeing a growing trend away from a district-wide focus, as suburban redistricting efforts are
effectively abandoned, victim of the fall in housingdemand, and the imperative for more compact cities
shifts the attention of enterprise planners toward therebuilding of existing urban areas. On the regulatoryside, because the source of so much of what is seen as aregion’s ‘identity’ is found most abundantly in its surrounding mountains and countryside, a stronger
movement to conserve such areas through micromanagement of development and construction is appearing,and there are calls to extend the reach of existing
regulations beyond the boundaries of the urban planning districts. In response, the government has indeed
been working to implement revisions to the City Planning Code and the Building Standards Law to enable
the necessary development permitting and collective
building codes to be applied outside of establishedurban districts. What is important is that these expanded regional definitions be treated not as a simple
creeping outward of the urban boundaries, but as a way
to provide comprehensive control over a single environment that stretches from the urban zones, to thesurrounding countryside, to the mountains themselves.
With the city of Kobe leading the way (with its ‘Ordinance On Zones of Coexistence Between Nature andPeople’), a considerable number of regional governments have begun responding to similar concerns withregulatory action.
What can be read from all of this is that, at theboundary of the urban district, stimulation efforts are
increasingly converging on the interior, while regulatory efforts are beginning to expand outward; withboth trends contributing to the slow death of the Urban
Planning District as an effective entity.
(3) Planning districts as tax collection bases
This function of the planning district is critical to the
day-to-day operation of government. As defined in
Section 702.4 of the Regional Tax Code, city planningtaxes may be levied to a maximum of 0.3% of the
combined total of land and building taxes, and in fact
most local governments mandate the full 0.3% amount.
The amount represents about one-quarter to one-fifthof the real property tax, and a fixed ratio of municipal
taxes. However, the system, including the regional tax
code that regulates it, was designed to target those areas
supporting urban development projects. In cities divided between urban development and restricted development areas, the tax is applied in the urban zone; inundivided municipalities, only areas zoned by ordinance are subject to the tax. In this sense, the Urban
Planning Districts are nothing more than a stage for
expediting tax districting and zoning.
2. Municipal districts and urban planning districts
What is the best structure for assuring integrated
operation and management of a city? To the extent thaturban planning is responsible for shaping and managing a city’s physical environment, it is probably necessary to identify, at least for planning purposes, those
districts which share common geography and topography. This is the traditional approach to establishingplanning districts, and has long been considered desirable because of the belief that such districts should
encompass broad urban areas that reflect the actual
outlines of the metropolis without regard to municipal
or regional boundaries. Today, however, trying to use
this approach to determine the optimum configurationof districts is complicated by the fact that simply trying
to define the ‘actual outlines’ of a metropolitan area isincreasingly difficult, and in the end, effective realignment to create broader urban planning districts
may not be feasible.
On the other hand, from the point of view of urban
management, the relationship between planning andadministrative entities is critical. Depending on who is
primarily responsible for defining and then implementing urban development, it is generally better thatthe reach of their administrative authority match theextent of the urban district being managed. Since mostbasic decision-making power over urban planning now
rests with local municipalities, these same municipal
governments also find themselves responsible for operating and managing those urban districts. In thisrespect, it makes sense that if urban planning districts
are going to continue as a needed tool, districting also
continues to be a function of the municipal government.
Of course, there are many cases where, in the process of deciding the components of an urban plan, theplanning body must look beyond their own municipal
borders and take a broader regional view. In such cases,
a framework needs to exist for an equally broad regional consideration of the relevant issues, whether thatmeans having the prefectural government step in tocoordinate the discussion, or establishing a regional
council for that purpose. Where final decision-making
authority resides with the municipality, this kind ofbroad coordination is necessary regardless of how theurban districts may actually be drawn. To put it anotherway, if a mechanism already exists for including wider
regional input in the planning process where necessary,
there is actually no need to establish new, broader urban planning districts.

The one case in which this may not be true is in therelationship between the planning process and rezoning
to control development. With this system, which uses
urban districts as the base for determining which partsof the municipality will be actively developed, and inwhich districts development will be more tightly controlled, it is not uncommon for regional discrepancies
to occur when one municipality using the system borders another which does not. The point of employing
such zoning is to focus public spending on defineddevelopment districts, which then become magnets for
population growth. Since the purpose of surrounding
these centers with districts where development ishighly restricted is to drive population to the urban core,
the proximity of a municipality with no such divisions
means that the ‘magnet’ districts of a zoned municipality stand to lose potential population growth to theunrestricted neighboring area. This is one reason why
one of the primary goals of good urban planning—development of a suitable residential environment, in an appropriate location—often goes unaccomplished.
Regardless of how existing urban planning districts
may be configured, the authority to implement thiskind of redistricting scheme lies with the prefectural
government, and at least in theory, when problems suchas the one noted above crop up—or threaten to crop

up—it should be the prefectural government which
steps in to address the situation. In reality, the unrestricted municipalities abutting the zoned ones are
typically disadvantaged districts made up of an unplanned conglomeration of population centers, andeven if they were targeted for redistricting, exploiting
what little opportunity might exist for viable development would likely exhaust the area’s economic resources.
The zoning issue has also been brought up as a barrier to implementing municipal mergers. For example,
should a city that implements development zoning
merge with one that does not, and one assumes that it
wouldn’t make sense to have a single municipality inwhich both systems coexist, then at some point themerged entity will have to choose whether to continue
development zoning or not. The real core of the issue
lies in the rigidity inherent in how non-development
zones are defined. Regardless of pressure to develop or
the realities of actual land use, these zones are placed
under such severe restrictions that, in effect, they
practically invite impoverishment. Revisions to relevant codes in 2000 did something to improve the resiliency of the system, but it is clear that most regulatory bodies still find it hard to leave old practices behind. The ideal solution to this situation would be to‘customize’ these more flexible land use restrictions tosuit regional circumstances, in such a way that they do
not represent an excessive burden; the entire area canthen be considered as a single Urban Planning District
for rezoning. This would of course require the cooperation of not only the bureaucracies concerned, butmore important of the local citizens and landowners, aswell as considerable time for deliberation. Unfortunately, in the meantime we are forced to continue livingwith this ‘one-country, two-system’ structure, underwhich dual, disparate urban planning districts exist side
by side.