Impact of municipal mergers on local population growth: an assessment of the merger of Japanese municipalities

Municipal mergers have been widely used as a tool for administrative reform at the municipal level in various countries. While there are many studies of such reform initiatives, most have overlooked the issue of the unequal distribution of merger benefits among merged municipalities. This article responds to this research gap by assessing the impact of municipal mergers on local population growth in Japan and, in doing so, appreciates that mergers differ within each of the merger partners, and also that the extent to which pre-merger municipalities can benefit from municipal mergers is contingent on their size relative to that of their merging partners. A unique dataset of Japanese local governments both pre-merger and post-merger facilitates an analysis of the impact of municipal mergers on local population growth. By employing propensity score-matching, it is found that, in Japan, municipal mergers negatively affect population growth for municipalities if they are not the largest municipalities among their merging partners. This finding suggests that not all pre-merger areas benefit from municipal mergers; rather, smaller municipalities are likely to incur considerable costs from municipal mergers.