Smart Shrink Strategy and the Fiscal System

Despite economic, scientific, and technological advances, damage and losses by natural disasters still remain at a high level in Japan. This is mainly because many people still reside in disaster-prone places both in urban and rural areas. We propose some policy measures to promote relocation from vulnerable places to safe places using financial incentives to residents and local governments. We then go on to review policy reforms/measures in promoting the Smart Shrink strategy in Japan.