This study concerns about before and after the merger of municipalities focusing on the case of Okayama Prefecture. By conducting questionnaire survey on municipalities, we examine the change of public service, tax burden, and resident consciousness. By expanding municipal areas it is becoming difficult to pick up needs of residents while some efficiency is attained by scale effects. Thus in order to overcome financial deficit and maintain public services it is quite important for all local municipalities to find out new basic industry for obtaining export money.