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theses

While some municipalities grow, others decline. When municipalities are in disastrous conflicts or degrade service quality, residents may move away, speeding up a cycle of decline. Drawing on Albert Hirschman’s Exit, Voice, and Loyalty (EVL), this study aims to reveal citizens’ response mechanism to the municipal decline caused by a municipal government failure. Recent EVL studies for local governance have examined whether citizens, in general, are more likely to exit or voice complaints as a consequence of dissatisfaction with municipal goods and services. Few studies, however, have tested EVL under specific circumstances of municipal decline. With the case of the Japanese town Ohwani in fiscal crisis, the study examines the effects of fiscal reform, which involve the impact of tax increases, service cuts, and political conflicts, on citizens’ intention to exit, voice activities, and their perceptions on municipal management. The Japanese alert system for local governments in fiscal crisis offers a stellar setting to measure the impact of fiscal reconstruction. In this legislation, the central government sets the national criteria of fiscal soundness, and further mandates the local governments which fell short of the criteria to design and implement a fiscal reform plan under the supervision of central agency. Given the exogenous fiscal reform mandate, the identification strategy makes central use of the experimental framework that contrasts Ohwani under fiscal reform to a control village not under fiscal reform, Inakadate which shares similar socio-demographic features. In the first phase of study, qualitative interviews with 14 Ohwani residents were conducted to develop the quantitative measures of EVL concepts under the specific circumstances of municipal decline. The estimation approach in the second quantitative phase is a unique difference-in-difference (DID) design whose time difference is enabled by a careful retrospective measurement. To revoke personal recall, the survey questionnaire was designed to take two-step process from present to past and to use mayor election as a benchmark to elicit memories of the past municipal management. I collected data from 600 randomly sampled citizens of Ohwani and Inakadate with a response rate of 44%. The findings show significant effects of the fiscal reconstruction on exit but not on voice, and further reveal that dissatisfaction with service quality did not arise due to service cuts/tax increases in the fiscal reform while distrust in policy process significantly increased.

ETD_7383

Ph.D.

Includes bibliographical references

by Shugo Shinohara

doi:10.7282/T3VQ34WJ

ETD doctoral

The author owns the copyright to this work.