Political Economy of Public Capital Formation in Japan

Haruo Kondoh
Additional contact information
Haruo Kondoh: Assistant Professor, Department of Economics, Seinan Gakuin University and Senior Fellow, Policy Research Institute, Ministry of Finance

Public Policy Review, 2008, vol. 4, issue 1, 77-110

Abstract: This paper investigates public investment policy (mainly from the 1980s onwards) with a political-economic approach. The points of this paper are as follows. First, at the macro level, it is possible that the short-term fluctuation of public investment has been controlled by the government party's political incentive to win an election rather than in order to dampen economic fluctuations. Second, as for regional allocation, up to 1993 when the Liberal Democratic Party of Japan (LDP) stepped down from government, the LDP had had a great influence on public investment allocation; however, following such a government alternation the influence of local special interest groups may have become stronger. Focusing on the local side, empirical analysis of the public investment function considering political-economic factors clarifies that local public investment policy has been deeply affected by the construction industry as a local interest group (which is heavily dependent on public investment in general), and that levels of public investment have not been determined in the way the median voter theorem implies.

Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://warp.ndl.go.jp/info:ndljp/pid/9908001/www.m ... w/ppr004/ppr004d.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mof:journl:ppr004d

Access Statistics for this article

More articles in Public Policy Review from Policy Research Institute, Ministry of Finance Japan Contact information at EDIRC.
Bibliographic data for series maintained by Policy Research Institute ().