So, our city’s shrinking—Now what?

Policymakers often overlook the challenges faced by shrinking small and medium-sized cities. Yet, keeping these cities sustainable is crucial for many urban stakeholders. Unfortunately, the methods that have succeeded in large cities cannot be unilaterally applied to combat this issue. This suggests that a research gap on effective urban management in small and medium-sized cities exists.

Dr. Haruka Kato, a junior associate professor at Osaka Metropolitan University, examined the types of municipal expenditures that correlated with population changes in small and medium-sized cities. The research design used cross-sectional studies from 2007 to 2022 of all small and medium-sized cities in Japan. The nonlinear relationship between data was analyzed using the eXtreme Gradient Boosting algorithm.

The results revealed that 1288 cities were shrinking, accounting for 82.56% of all small and medium-sized cities in Japan. Further, this study identified the types of per capita municipal expenditures that correlated with population change, which were often associated with welfare expenditures. Specifically, the population grew in cities that increased per capita expenditures on children and decreased those on welfare recipients and the older population. Additionally, city planning expenditures were also effective, but only in the maintenance and construction of streets.

“In recent years, urban policymakers have adopted an urban management perspective. With limited financial resources, policymakers must decide what and how much to invest in citizens,” said Dr. Kato. “Our research clearly suggests prioritizing child welfare expenditures as a key strategy to sustain populations in small and medium-sized cities.”

The findings were published in the Journal of Urban Management.

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