In this paper, I analyzed the investment expenditures of local municipalities in Japan in the 2000s by examining the cases of different municipalities and obtained the following results. First, merged municipalities issued Special Merger Bonds and nonmerged/depopulated municipalities issued Depopulation Bonds most. Second, in nonmerged/nondepopulated municipalities began to focus more on works funded by grants and local bonds rather than on unsubsidized works funded by Road Bonds and other types of local bonds. That is, in the past, the total value of Road Bonds was the largest of all bond totals. However, Road Bonds were replaced by School Bonds issued to supplement School Block Grants established during the decentralization reform in the 2000s. Therefore, this phenomenon is one of the outcomes of the decentralization reform. In Japan, the decentralization can increase public works for schools in cities and some select towns and villages with high financial capability indices. This could widen the gap between rich and poor municipalities. The theory of cumulative causation by Gunnar Myrdal can be attributed to this phenomenon
