There has been a growing trend of municipalities in Japan exhausting their savings in recent years. As public finance sinks into pressure, many local governments are finding it increasingly difficult to balance their books. The situation propels a national concern about the state of municipal finances, amid the prolonged economic stagnation and a populace that’s rapidly aging.

In Japan, the state of municipal finances significantly affects the livelihoods of people, especially in rural areas where local governments, heavily reliant on dwindling taxes and subsidies, provide important public services. This issue has been driven by a combination of overexpenditure, decreasing population, and a struggle to attract new businesses and residents.

In the US and EU, local governments also face financial challenges. However, compared to Japan, these countries have more diversified sources of local revenue, including property, sales, and income taxes. Furthermore, many local governments in the US and EU are able to borrow money to fund their spending, a resource not readily accessible to most Japanese municipalities.