Inefficiency and Self-Determination: Simulation-based Evidence from Meiji Japan

Eric Weese, Masayoshi Hayashi and Masashi Nishikawa
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Masashi Nishikawa: Department of Economics, Aoyama Gakuin University

No DP2015-35, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: Does the exercise of the right of self-determination lead to inefficiency? This paper considers a set of centrally planned municipal mergers during the Meiji period, with data from Gifu prefecture. The observed merger pattern can be explained as a social optimum based on a very simple individual utility function. If individual villages had been allowed to choose their merger partners, counterfactual simulations show that the core is always non-empty, but core partitions contain about 80% more (postmerger) municipalities than the social optimum. Simulations are possible because core partitions can be calculated using repeated application of a mixed integer program.

Pages: 98 pages
Date: 2015-08
New Economics Papers: this item is included in nep-cmp
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Citations: View citations in EconPapers (3)

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https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2015-35.pdf First version, 2015 (application/pdf)

Related works:
Working Paper: Inefficiency and Self-Determination: Simulation-based evidence from Meiji Japan (2016)
Working Paper: Inefficiency and Self-Determination: Simulation-Based Evidence From Meiji Japan (2015)
Working Paper: Inefficiency and Self-Determination: Simulation-Based Evidence From Meiji Japan (2015)
Working Paper: Inefficiency and Self-Determination: Simulation-based Evidence from Meiji Japan (2015)
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