The Economic System of Small-to-Medium Sized Regions in Japan

In Japan, since the end of World War II, the three largest metropolitan areas (Tokyo, Kinki, and Chukyo) have constantly experienced population growth and, in particular, the Tokyo metropolitan area has been attracting positive net population in-migration. In brief, population and economic activities have continued to concentrate in a few of the larger areas. The central government has attempted to alter this tendency to concentrate so as to disperse population and economic activities from central metropolitan areas to peripheral, less-dense areas through transportation system improvements, industry-related infrastructure investment, lower taxes and subsidies. However, this effort has not been very successful because such policies have not been effective in modifying the results brought about by market forces. In other words, planners intending to change the spatial structure of the economy need to investigate carefully the market forces prevailing in the existing system of regions. The present research is motivated by this conclusion.