NO. 1 - Keio University

Local Government Bond Market
and the Revenue Bond
Keio University
Department of Economics
Naoyuki Yoshino
吉野直行
Size of the Central and Local Government/GDP
Comparison between Central and
Local Government in Japan (2003)
Central Government
G= 81.8 (trillion yen)
T = 43.8
Bond issue = 36.4
Bond/G = 44.6%
Bond Stock=518 trillion
2004=109.4% (Bs/GDP)
Local Government
G= 86.2 (trillion yen)
T = 32.6
Bond Issue = 15.1
Bond/G = 17.5%
Bond Stock=199 trillion
2004=40.7% (Bs/GDP)
Central and Local Government Debt/GDP
1980
Total Debt
7.2
(9.6%)
32.1
(21.1%)
118.1
1990
(48.0%)
265.8
(33.8%)
200.3
(15.9%)
67.0
(59.1%)
718.6
(143.6%)
(44.5%)
547.6
(109.4%)
(14.9%)
203.7
(40.7%)
1970
1975
2004
Central Gov. Local Gov.
4.2
2.9
(5.7%)
(4.0%)
18.6
14.0
(12.3%)
(9.2%)
83.1
39.0
GDP
75.2
152.3
246.2
449.9
500.6
Public Debt / GDP Ratio
Japan
United States
United Kingdom
Germany
France
Italy
Canada
1990
64.6
66.6
44.4
42
39.5
103.7
92.8
1995
80.4
74.5
60.6
57.1
59.3
123.1
119.8
2000
123.2
59.4
53.8
60.8
64.1
110.8
103.2
(Unit: %)
2002
141.5
56
50.9
62.5
65.4
105.2
95.1
Local Government Expenditures
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15年度
地方財政計画の歳出
F.Y.2003
歳出総額
86,211
給与関係経費
23,438
給与費
23,370
一般行政経費
21,026
国庫補助負担金等を伴うもの 9,841
生活保護費
2,024
児童保護費
1,666
国庫補助負担金を伴わないもの 11,185
公債費
13,767
維持補修費
1,007
投資的経費
23,287
直轄事業負担金
1,181
公共事業費
7,214
普通建設事業費
7,155
災害復旧事業費
59
一般事業費
9,617
普通建設事業費
9,514
災害復旧事業費
103
特別事業費
5,263
構成比
FY2003
100.00
27.19
27.11
24.39
11.42
2.35
1.93
12.97
15.97
1.17
27.01
1.37
8.37
8.30
0.07
11.16
11.04
0.12
6.10
地方財政計画の歳入
15年度
構成比率
F.Y.2003
FY2003
歳入総額
86,211
100.00
地方税
32,173
37.32
地方交付税
18,069
20.96
国庫支出金
12,260
14.22
義務教育職員給与費負担金
2,785
3.23
その他普通補助負担金等
4,635
5.38
1,519
1.76
3,840
4.45
15,072
17.48
8,257
9.58
#一般公共事業
2,100
2.44
一般単独事業
4,708
5.46
5,298
6.15
生活保護費
公共事業費補助負担金
地方債
#一般会計債
雑収入
Local Government Borrowing / GDP Ratio
(Local Bond is increasing drastically)
Characteristic of Local Bond Market
(1)政府資金(5-30years)
５.6 trillion yen ３２.0%
(1-1)財政投融資資金(21.2%),(1-2)郵政公社資金(10.9%)
(2)公営公庫資金(5-28years)１.６ trillion yen
９.２％
(3)民間資金
１.０ trillion yen ５８.７％
(3-1)（市場公募－共同発行（２７地方政府）１８.１%
－個別発行(5years, 10, 20, 30years)
－住民公募(5years)
(3-2)（銀行引受）(mainly 10years)10.2 trillion
４０.７%
(4)合計2004年度地方債計画額17.4 trillion yen
市場公募地方債
全国型市場地方方募債
２．８６兆円
(1) 市場公募型地方債発行の推移
1952, 東京都、大阪府、兵庫県、
横浜・名古屋・京都・大阪・神戸市
1973,北海道、神奈川県、静岡県、愛知県、広島県、福岡県
札幌・川崎・北九州・福岡市
1975,宮城県、埼玉県、千葉県、京都府
1982,
広島市
1988,茨城県、新潟県、長野県、
仙台市
1994,
千葉市
2003,
さいたま市
2004,福島県、群馬県、岐阜県、熊本県、
(2)住民参加型ミニ市場公募地方債０．３兆円
(1)青森県民債H14.12 (2)北東北みらい債15.12 （３）やまがた未来債15.9 (4)うつくしま県民
債15.5 (6)とちぎ未来債15.12 (7)群馬県愛県債H14 (8)とやま県民債H15 (9)ふるさと
いしかわ債H15.2 (10)ぎふ県民債H!4.10,H15.12 (!!)びわこ県民債 (12)まぼろし奈良県
債H!5.9 (!3)紀の国きらら債H!5.12 (!4)とっとり県民債H!5、 (!5)しまね愛県債H15 (!6)
讃岐のくにづくり債H15.6 (!7)さが県民債H15.3 (18)ながさき創造県民債H15.3 (19)くま
もと新幹線ゆめ県債 (20)おおいた元気債H!4.12,H15.12
Bond Market in Japan (2002）
Government Bond (Stock) 422 trillion yen
Local Government Bond
58
Corporate Bond
54
Government Agency Bond 65
GDP
500
----------------------------------------------------Private Bank Loans
666
Government Bank Loans
537
Characteristics of JGB Market in Japan
1Mainly held by financial institutions,403.5
2 Households, very small portion, 12.3
3, Overseas holdings, 16.7
---------------------------------------Maturity changes,
1,used to be 10 year government bonds,
2,Short-term, Medium term, Long term
3, New Government Bond for individuals
(Starting from March 2003, sold through
banks and post offices)
JGB Interest Rate (10 Year Bond)
Reform of the Allocation of Public Investment
Define the level of “National Minimum”
School, Police Protection, Education, Basic
Infrastructure
(1) User-Based Revenue Bond
(a) Beyond the level of National Minimum should be
based on Revenue Bond
(b) Issue Bond for specific project such as Air-port,
Highways
(c) The rate of return on bonds depend on the revenue of
each project
(d) External Benefit - Tax should be subsidized
(2) PFI (Private Financial Initiatives)
(a) Public Projects are partly financed by private funds
(b) Failures of the Third Party Project of Japan
(c) Weak Governance, No Responsibility in case of failure
National Minimum Level of Public Goods
Central Government Level
Local Government Level
National Defense
Police, Fire protection
Macroeconomic Policy
Higher education (University)
Housing Policy
Medicare
Social Welfare
Unemployment Compensation
Child care
Primary and Secondary
Education
Water Supply and Sanitation
Regional Economic Policy
Regional Disaster
Protection
Medicare for elderly people
Effectiveness of Public Capital Stock
- “Private capital/Public capital ratio” to “Marginal productivity of Public capital” -
Secondary Industry (Industrial Sector)
0.4
Marginal Productivity of Public Capital
Southern Kanto
Tokai
0.3
Kinki
Chugoku
0.2
Northern Kanto
Shikoku
Northern Kyushu
0.1
Hokuriku
Hokkaido
Tohoku
Southern Kyushu
0
0
0.2
0.4
0.6
0.8
1
Private Capital / Public Capital
1.2
1.4
1.6
Effectiveness of Public Capital Stock
- “Private capital/Public capital ratio” to “Marginal productivity of Public capital” -
Tertiary Industry
0.7
Marginal Productivity of Public Capital
Southern Kanto
0.6
0.5
0.4
Kinki
0.3
Tokai
Hokuriku
Northern Kyusyu
Tohoku
Shikoku
Northern Kanto
Hokkaido
Chugoku
0.2
0.1
Southern Kyushu
0
0
0.5
1
Private Capital / Public Capital
1.5
2
Determinants of regional allocation of public
investment (Political Power plays a role)
Table3
Allocation of Public Infrastructure in Japan: (Pooled data, 47 prefecture)
Coeffcient
Explanatory
Variables
Agriculture
Land
Conservation
0
Constant
1
Yp (Income)
2
Sp(AreaSize)
3
4
Rp(Political
Power)
Dummy1
5
Dummy2
-35.44
(-10.46**)
0.01
(7.21**)
4970
(28.47**)
8280
(16.88**)
-23.21
(-6.69**)
27.43
(9.26**)
0.675
-34.26
(-11.32**)
0.01
(13.18**)
2090
(13.40**)
7274
(16.60**)
-34.27
(-11.06**)
-1.65
(-0.62)
0.486
Adj.
R2
(1) ( ) denotes t-value
(2) ** is significant with 99.0% level,
Industrial
Infrastructu
re
-61.58
(-11.84**)
0.02
(17.99**)
3855
(14.39**)
10956
(14.55**)
-59.81
(-11.23**)
65.87
(14.48**)
0.458
Improvement
of living
standardsｙ
52.32
(8.00**)
0.036
(25.86**)
2730
(8.10**)
-7434
(-7.85**)
-36.85
(-5.50**)
66.89
(11.70**)
0.527

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