—In this study, we analyze the efficiency of the
equilibrium of yardstick competition among decentralized local
governments and investigate its empirical significance by using
Japanese prefecture-level data. The model included in the
paper features incomplete contracts between a principal and an
agent (i.e., residents and the local government, respectively).
The model states that a local government attains accountability
through the voting behavior of its residents in accordance with
a yardstick comparison of their own locality with their
neighboring localities. We find that local governments tend to
under-supply local public goods; in addition, to improve the
efficiency of the yardstick equilibrium, local governments must
supply local public goods after considering regional disparities
regarding residents’ preference conditions and other factors.
E-Government is a promising means of promoting information
policy of local governments. Using an e-Government evaluation
and an investigation of SNS use by local government, we
indicate the effectiveness and the problems of Japanese
—Yardstick competition, asymmetric
information, policy evaluation, e-Government.
Yasuyuki Nishigaki and Hideki Nishimoto are with the Ryukoku
University, Kyoto 612-8577, Japan (e-mail: firstname.lastname@example.org,
Yuzo Higashi is with the Kobe City University of Foreign Studies, Kobe
651-2187, Japan (e-mail: email@example.com)
Noya Yasugi is with the Kyoto City and the Graduate School of Ryukoku
University, Kyoto 612-8577, Japan (e-mail: firstname.lastname@example.org).
Cite:Yasuyuki Nishigaki, Yuzo Higashi, Hideki Nishimoto, and Naoya Yasugi, "An Empirical Analysis on Yardstick Competition among
Local Governments and Implications for Roles of
e-Government in Efficient Provision of Local Public Goods," Journal of Economics, Business and Management vol. 2, no. 2, pp. 133-138, 2014.