Municipal mergers and dissolutions carried out in Japan (known as shichōson gappei (市町村合併?) in Japanese) can take place within one municipality or between multiple municipalities and are required to be based upon consensus.
The government's stated goal is to reduce the total number of Japanese municipalities to 1,000. The government did not provide a distinct timetable.
Japan had around 1,822 municipalities at the beginning of 2007, considerably less than the 2,190 on April 1, 2005 and a decline of 40 percent from the number in 1999. The 1,822 municipalities include 198 villages, 777 cities and 847 towns.
The municipality merger promotion law was revised to ease the burden on debt-ridden local governments and to create larger municipalities so more administrative power could be transferred to the local level. The law's deadline passed on March 31, 2006.
As of January 2006 many municipalities in Japan contained fewer than 200 residents. Japanese municipalities require skilled workers. 40% of Japan's GDP consisted of debts from local governments. Japan merges local governments to expand residential area per municipal government, create different school attendance boundaries for elementary school and junior high school students, and to allow more widespread use of public facilities.
Most of Japan's rural municipalities largely depend on subsidies from the central government. They are often criticized for spending money for wasteful public enterprises to keep jobs. The central government, which is itself running budget deficits, has a policy of encouraging mergers to make the municipal system more efficient.
Although the government purports to respect self-determination of the municipalities, some consider the policy to be compulsory. As a result of mergers, some cities such as Daisen, Akita temporarily have very large city assemblies.
Some people see it as a form of federalism; they consider that the ultimate goal is to change Japan into a union consisting of more autonomous states. So far the mergers are limited to the local municipalities. Mergers of prefectures are also planned in some regions of Japan.