The determinants of Japanese local-benefit seeking

This paper examines the determinants of the allocation of Japan's central government spending across its prefectures. Using the framework developed by Atlas et al. (American Economic Review, 85:3, June 1995, 624-629), the paper examines whether over-represented Japanese prefectures receive larger real per capita transfers than under-represented prefectures. A broad concern of the paper is whether institutions matter. Per capita representation of prefectures, party affiliation, and intra-party characteristics are found to be determinants of Japan's central government transfers. The results suggest that institutions do matter.