| Japan maintained a high level of regional equality from the 1970s through the 1990s. The LDP's policies, especially regional industrial development policies, public works, national subsidies, and financial transfers to local governments, played important role in reducing regional disparity between urban and rural areas, resulting in strong support from the rural electorate. This made the LDP's long-term dominance possible. In the 2000s, however, regional disparities between urban and rural areas began to increase. This dissertation explores the causes of the regional disparity from a politics and policy perspective.;Starting in the 1980s, Japan faced international and domestic challenges, such as economic globalization, a decline of economic growth, budget deficits, and an aging society, which made it difficult for Japan to sustain the 1955 System. These problems necessitated a reform of the system. But attempts to reform made little change until the LDP reconsidered its rural-based electoral strategy. The increasing power of urban, non-affiliated voters during the 1990s began to shift the LDP's rural-oriented policies. After the election of Koizumi as prime minister, the government reduced public works projects in rural areas and redirected them toward urban areas. These projects focused on the renovation of urban centers and the construction of international airports and harbors. This was a response to strong demands to improve international competitiveness. Meanwhile, the government launched decentralization reform to cope with problems arising from globalization, an aging society, and rural depopulation. In particular, concern over local budget deficits under the conditions of the increase of the aged population and depopulation in rural areas facilitated fiscal decentralization from the early 2000s. This resulted in a high reliance on local revenue sources rather than financial transfers from the central government, providing benefits to local governments in urban areas while it damaged financial conditions of local governments in rural areas. This study argues that the increase in regional disparity was a result of the changes in the LDP's traditional, rural-oriented policies, aimed to improve Japan's economic performance and to secure the party's political power. In particular, a policy shift in public works and local finance (fiscal decentralization) considerably increased the regional disparity. |
