Responding to the Capacity–Responsibility Gap: How Local Governments Adapt to Unequal Decentralization in Thailand and Japan

Jaksri (2026) proposed the Capacity–Responsibility Gap to explain why local governments persistently face a gap between assigned responsibilities and available capacity, through two pathways that differ in the extreme: a structural pathway (Structural Under-Transfer) and a demographic pathway (Capacity Erosion). This paper continues that line of inquiry by asking a new question: once such a gap has arisen, how do local governments respond to it, and why do some systems adopt one response rather than another? This paper argues that a local government's response is not necessarily aimed at closing the gap, but may instead constitute pragmatic adaptation that allows the organization to continue functioning under a gap that persists. Building on Cutback Management theory together with the contemporary concept of Pragmatic Municipalism and documentary evidence from Thailand and Japan, this paper proposes that the pathway through which the gap arose shapes the available response space open to each system, which in turn constrains the range of responses that is practically available. This is a conceptual paper relying primarily on secondary documentary evidence, involving no primary data collection, that puts forward four testable theoretical propositions together with a candid statement of limitations.