Seminar abstracts AY2010

February 15, 2011
The Fiscal Sociology of Finance Ministry Control: Japan's Finances Facing Crisis in Governance
Eisaku IDE (Faculty of Economics, Keio University)

This report historically traces attributes of the control held by Japan's Finance Ministry, and looks at how there is a crisis in governance through finance.
   Generally, financial control is classified into two: Finance Ministry control and congressional control. The term “Finance Ministry control" was originally conceptualized by the British Finance Ministry based on the reality of its control over policy and administrative organization via control over personnel and finances. With the move in the 1930s towards a managed currency system, however, Finance Ministry control began to form in Japan, in a context different from Great Britain. Characteristic of Japan's Finance Ministry control is that while supported by things such as policy coordination with the Central Bank, fund-control at the local level, and small government through policy-based finance, there is emphasis on macro budgeting. On the other hand, while micro resource allocation takes place for total individual budgets using ceilings, public works spending is treated as an exception, with profit-sharing taking place mediated by politicians who favor certain sectors of the economy.
   This manner of budget control made sense when an increase in tax revenues could be expected, and both urban and rural areas needed social infrastructure. With the shift of political influence from rural to urban areas, changes in the industrial structure, and the social advancement of women, however, there have been political, economic and social changes in the structure, with a further declining birthrate and ageing population, as well as changes in financial needs. It is difficult for existing controls for macro budgeting to apply flexibly to these changes. This systemic fatigue is linked to financial dysfunction, identified by “joint satisfaction of joint demand," and as problems arise in currency-governed administration, people's resistance to taxes is bringing on a financial crisis with unprecedented budget deficits.
   Based on the views above, this seminar aims to consider, from the point of view of fiscal sociology, how Japan's Finance Ministry controls were formed, and how these are leading towards dysfunction.

January 18, 2011
Causes and Prescriptions for Deflation from the Perspective of Characteristics of the Labor Market: An International Comparison focusing on Sweden
Hisashi YAMADA (Economic Research Center, Economic Research Center, the Japan Research Institute, Limited)

Breaking away from deflation is a top priority issue for Japan, but a more substantive factor is its main cause, rather than monetary issues. Macro economically, we can explain that production factors are not shifting from mature/declining sectors to new/growth sectors, and in addition to excess supply in existing sectors, productivity in the economy as a whole has decreased. From a micro perspective, businesses are engaged in cost reduction to survive, with their low profits, including the cutting of personnel costs. This has resulted in reduced wages and only cheap items being sold?the trap of lower prices and lower wages.
   Recently, Japanese companies have continued their stance of suppressing or reducing wages under increasing pressure from shareholders and global competition. In the latter period of the 2000s, however, the distributive share of labor fell to a level below equilibrium derived from the rational relationship between wages and productivity. During this period that the world economy seemed to be on a sustained course of recovery, Japan was the only major industrial country where wages basically declined. Though actions taken by Japanese companies may seem peculiar from an international perspective, with many businesses in the same industry engaged in severe competition for functionality, and improvements in productivity not being reflected in wages, this behavior reflects the attitudes of Japan's labor unions, which prioritize maintaining employment at the expense of higher wages. The context here of existing government policies to maintain industry and employment, as well as a lack of social mechanisms allowing labor mobility, must be pointed out.
   The improvement of productivity through companies choosing and concentrating on business structures with a view to the global market is a key road towards surviving deflation, and the advancement of labor mobility between businesses and industries is essential to this. In Japan, where external labor markets are inadequate, industrial and employment structural adjustments made in collaboration by government, labor and management are needed, referencing countries such as Sweden, where labor migration is actively pursued through labor market policies and labor unions consider redundancies acceptable.

December 21, 2010
Effects of the Introduction of a Universal Health Insurance System
Ayako KONDO (Institute of Social and Economic Research, Osaka University)

Since the effective price of healthcare services drops with the introduction of universal health insurance, various reaction can be observed, including the increasing moral hazard on the demand side of people using healthcare facilities more than necessary, the entry of hospitals on the supply side, and effects on the health of the population. This research explores the case of the introduction of universal health insurance to Japan in 1961 and carries out an empirical analysis of how universal health inurance impacts the entire population. First, we investigate the impact on the healthcare utilization (number of inpatients, outpatients and number of new admissions and discharges), and whether more medical facilities are being built due to the permanent increased demand for services with the introduction of insurance. To indicate impact on health, in addition to mortality rates, which have often been used in previous studies, incidence rates of tooth decay among elementary school students is used to indicate slight morbidity rates. Also, the impact on the number of hospital beds and doctors available is considered indicative of the capacity of healthcare services to meet growing demand.
   Our identification strategy exploits the difference in percentage of the population of prefectures enrolled in health insurance prior to the introduction of universal health insurance Universal health insurance  was fully implemented during the period of 1957-1961, and by 1961, almost 100% of the country was enrolled in it. Before that, however, enrollment in the National Health Insurance was decided arbitrarily at the municipal level, resulting in considerable variation among them. Using these regional variations, prefectural panels are created from various published statistics to project a model with such slight variations.
   Tentative results of this study show that, first, in areas where there was a big surge in health insurance enrolment due to the introduction of universal health insurance, a large increase in the use of healthcare services is observed. The number of hospitals has also increased, but this can be interpreted as a supply-side response to the permanently increased demand brought on by universal health insurance. In terms of health, although there has basically been no impact on the mortality rate, a downward trend in the rate of tooth decay can be observed. That is, it can be construed that there has not been much impact on reducing death from serious illness, but there has been a reduction in less serious ailments. Regarding capacity on the supply side, although there has been an increase in hospital beds, there is no increase in the number of doctors or nurses available.

November 9, 2010
Women's Paid Employment and Outsourcing of Unpaid Domestic Work
Margarita Estevez-Abe (Maxwell School of Syracuse University)

The employment rate of women, particularly that of married women has been consistently rising in all developed countries. Even given this circumstance, as far as the division of household labor is concerned, household labor remains to be performed mainly by women even in the Scandinavian countries which are the most advanced countries in gender equality. Therefore, although the employment rate of married women has been increasing, the total working hours of women is small compared to that of men. In other words, even in countries in which childcare facilities are in place and child rearing has been “socialized" as in the Scandinavian countries, gender inequalities remain both at home and in the labor market. With the background that the share of household labor for men did not necessarily increase in proportion to the employment rate of women, the present research hypothesizes that the possibility of outsourcing household labor has an influence on how much of the “unpaid work" by women is reallocated to “paid work," and this hypothesis is examined empirically. Specifically, the influences of wage disparity within each country and the number of immigrants with low education on the allocation of work time among women in the countries under investigation are addressed. (The investigation involves 16 developed countries, and Family and Changing Gender Roles III from the International Social Survey Program (ISSP) 2002 is used.)

October 19, 2010
Civil Society and Governance in Japan in a Global Context: The Methodologies and Scope of a 13-country Survey and of a Survey of Neighborhood Community Associations, Social Associations, NPOs, and Local Governments in Japan
Yutaka TSUJINAKA (Graduate School of Humanities and Social Sciences, University of Tsukuba)

While the public sector in Japan is the smallest of the industrial countries, Japan has maintained the world's second largest economy and at the same time is suffering from the worst accumulated debt in the world, which demonstrates both the positive and negative aspects of Japan. Furthermore, vigorous and voluntary civic actions (actions by neighborhood associations) are carried out after earthquake disasters, however, the organizational foundations of NGOs and NPOs are weak by international standards. Thus, the relationship between politics and civil society in Japan is puzzling in many ways. The answer to the question of where the structure of civil society in Japan stands with respect to those in other countries is sought with an empirical approach and with international comparisons, with a further goal of elucidating the relationship between government and governance.
   In the JIGS project (Japan Interest Group Study, Cross-national Survey on Civil Society Organizations and Interest Groups in Japan), the structure of civil society in Japan is investigated both comprehensively and empirically with a large-scale Grant-in-Aid (for Specifically Promoted Research). This project attempts to clarify the mechanisms (governance) of interaction between political and social actors in Japan by comparing Japan to a total of 12 other countries.  For the comparison, on-site field surveys were conducted in all 12 countries including the US, South Korea, Germany, China, Russia, Brazil, and Turkey, and surveys were conducted twice in the first four countries. Here, the structure of civil society refers to the overall civil society organizations. In the survey of Japan (2006 ? 2007), empirical research was conducted focusing on three levels of civil society organizations (neighborhood associations such as neighborhood community associations, social associations published in telephone directories, and registered NPOs) and using surveys which were prepared in the context of civil society, social capital, policy network, and governance theories. The current status of civil society in Japan is now emerging with the data collected from the three levels, gathered from approximately 40,000 organizations, and a little over 1000 municipalities. Surveys were also conducted on the civil society organizations in Germany, South Korea, the US, and China on a reduced scale, and we are currently compiling the results of these investigations. As for Japan, a total of 7 books including the code book for the entire investigation and three kinds of survey reports were created, publication of Gendaishimin shakaisosho [library of contemporary civil societies] (Publisher: Bokutaku-sha) has been planned, and three books were published in 2010. We are currently in the process of preparing monographs and research documents on comparison of the other 12 countries.
   The JIGS project is an ongoing endeavor in response to the structural change in Japanese politics which started in 2009, and the project has been funded by “Comparative empirical research on change in political structures and transformation in lobby groups, policy networks, and civil societies" (Grant-in-Aid for Scientific Research (S)). In this presentation, preliminary findings are discussed, and the methodologies and scope of the project are also addressed.

September 30, 2010
Food system Theory and Food Issues in Contemporary Japan
Shinichi SHOGENJI (Faculty of Agriculture, the University of Tokyo)

The present conditions of agriculture in Japan are surveyed taking into account the international environment which is in the process of major changes related to food. In addition, based on the framework of food systems, the status of food and food products in contemporary Japan is laid out, and in-depth discussions are presented on a few fundamental issues. Research on food systems aims to comprehend contemporary food issues from the viewpoint of the whole chain of food production in which food and food products are delivered to the consumers from the farming and marine products industries (basic resource industries) through the processing, distribution, and food-service industries. In contrast to the traditional paradigm in which food issues tended to be addressed with a perspective based on the suppliers upstream of the chain, research on food systems emphasizes the perspective in which a full picture of food issues is approached with the consumers downstream of the chain as the starting point. Food systems in contemporary Japan are subject to globalization and are also characterized in the following manner: 1) food systems hold a large share in terms of both income formation and labor absorption, 2) the length of the industry-related food delivery chain as well as the spatial distance required for food transportation has increased and, 3) information asymmetry between the food industry and consumers is notable. These characteristics are linked to a number of existing issues. Attainment of food security remains an important subject in complex food systems. In addressing this issue, the concept of a three-layer structure, i.e., Japan, East Asia, and the world, is effective. Meanwhile, regarding food safety, new issues are being faced such as the introduction of traceability systems and an international concord for food-safety systems. While food and food products are becoming credence goods, the most appropriate forms of technology for the transmission and reception of information as well as systems for securing the credibility of this information are being sought. Addressing contemporary food and food product issues is linked to the process of addressing the valid scope of the market economy and also the valid scope of economic studies which analyze the market economy. The viewpoint of the presenter on this issue is presented along with a number of specific issues that are addressed in depth.

July 12, 2010
Why had Managers Disregarded Shareholders' Interests in the Postwar Japan?
Masako EGAWA (The University of Tokyo)

While laws concerning publicly-traded companies such as the Commercial Code of Japan and the Securities and Exchange Law of Japan stipulate respect for the rights of shareholders, corporate management did not place a high emphasis on shareholders in the past. The reasons for this trend from the end of World War II to the 1990s are examined. Corporate management in the postwar period did not place a high emphasis on shareholders for the following reasons: 1) lack of market discipline, 2) absence of major shareholders who could play a supervisory role, and 3) skepticism among corporate management about the control of a corporation by investors. (Shareholders control a corporation through voting rights. On the other hand, if a secondary market in which stocks can be sold at any time is assumed, current shareholders and potential shareholders who intend to purchase shares need to be treated equally and are referred to as “investors" as a whole.) However, behind these reasons are structural causes: a) dysfunction of the primary market, b) inefficiencies in stock price formation, and c) short-term and speculative tendencies of investors. These structural causes were reinforced and maintained by their mutually complementary nature and a spiral phenomenon (the low emphasis on shareholders by corporate management reinforces the structural causes, which in turn reinforces the low emphasis on shareholders among corporate management). If the stock price is not formed efficiently and rationally, the supply-demand adjustment function of the market does not come into operation.  Accordingly, because of the dysfunction of the primary market and inefficiencies in stock price formation in the secondary market, there was a lack of market discipline. In addition, there were no major shareholders who could play a supervisory role as a result of the disappearance of major shareholders, the cross ownership of stock, and the absence of institutional investors, all of which followed the dissolution of the Zaibatsu. Finally, the short-term and speculative tendencies of investors and inefficiencies in stock price formation caused corporate management to be skeptical of the control of corporations by investors. The short-term and speculative tendencies of investors formed along with the development of a mainly speculative secondary market. This market developed after the future trading method of the Dojima Rice Exchange from the Edo Era was adopted during the creation of the stock market in the Meiji Era. Thus, it is the failure of the stock market to function properly (the dysfunction of the primary market and inefficiencies in stock price formation) and the short-term and speculative tendencies of investors that caused a low emphasis on shareholders by corporate management in postwar Japan.

June 15, 2010
Several Research Projects on Individual Local Governments
Toshiyuki KANAI (Graduate Schools for Law and Politics, the University of Tokyo)

Although research on local governments is generally of an interdisciplinary nature, the research conducted by the presenter is limited to the perspective of local government and public administration, i.e., the perspective of public administration. As a result of the uncoordinated division of the subject “political science" in postwar Japan, “local government and political science" and “local politics" were classified under public administration for a long time. In recent years, however, such demarcation has been rapidly corrected, which is highly desirable. Even within the limit of “local government and public administration," two distinct research fields called “institutions of local government" and “local government administration" have been formed. However, both of these two research fields consist of research on the sum of local governments (clusters of individual local governments). Although “institutions of local government" deliberately pursues the system-inherent logic of institutions usually a country at a time, because of the nature of this pursuit, the research focuses on commentaries of legal structures at the national level and also the analyses of political and administrative processes of system improvement and elimination.  Therefore, it is a characteristic of “institutions of local government" research that it concerns itself with national administration rather than local governments though the research field itself is classified under local government research.  In a similar fashion, the overall tendencies, e.g. current norms and forward-looking trends, of local government administrations within a country are investigated in “local government and administration," and individual local governments are not studied. In “local government and administration," research on individual local governments is treated merely as case studies (e.g., advanced and failure case examples, and theory-testing case examples). In case studies, lengthy statements of the virtues of and explanations of the limits imposed by using a small number of cases as well as the selection of specific cases are required, thus, both the researchers and readers may become weary.  At the same time, individual local governments are not necessarily and merely “case studies," but rather unique, irreplaceable, and separate entities. For this reason, “local government and public administration" needs to take into account the characteristics of the subjects of the case studies. Accordingly, in research on individual local governments (and public administrations), it is possible that a new paradigm exists in which individual local governments are studied in a context different from “caseness." With such a perspective, several research efforts have been made on individual local governments. These efforts will be discussed during the presentation, and the presenter welcomes criticism from the audience.

May 18, 2010
Theoretical Issues of Governance: Welfare, Norms, and Morals
Susumu CATO (Institute of Social Science)

In this presentation, research on topics associated with governance based on economic theory is examined from the positive and normative perspectives. In research conducted from the positive perspective, the question which forms the starting point of the research is, “given a certain mechanism of governance, what types of allocation of resources can be achieved?" and “how does the mechanism of governance in a certain society form?" becomes the issue to be addressed. On the other hand, in research conducted from the normative perspective, the question, “what aspects of social and public welfare are to be used for evaluating governance?" is initially addressed, and then, “what type of governance system should be designed in order for humans to achieve a good life?" is questioned. In this presentation, on the premise that all persons are reasonable individuals, the fundamental issues of positive and normative research are first explained. As the fundamental issue of positive research, spontaneous order and governmental functions are discussed. As the fundamental issue of normative research, methodologies for evaluating public welfare are investigated while Benthamian utilitarianism is critically examined. Subsequently, a discussion is held on how the identities of individuals and the social norms and ethics that they follow are related to the two types of research on governance. Furthermore, the significance and issues of democracy as a large-scale mechanism of governance are reviewed through the social choice theory which dates from a discussion by Marquis de Condorcet and was completed by Kenneth Arrow. Finally, the positive-normative dichotomy in research on governance is critically examined.

April 27, 2010
Reconsidering Governance: Welfare Regimes, Varieties of Capitalism, and Livelihood Security Governance
Mari OSAWA (Institute of Social Science)

Since the late 1980s, welfare regime theory and the “varieties of capitalism" theory have been popular, and some positive results have been achieved in the analysis of Western societies and in the policy implications of these theories.  However, neither of the theories has been successful at defining the situation in Japan. In the comparative research of welfare states and regimes, three main types as proposed by Esping-Andersen (liberal, conservative, and social democratic) are well-known. In his classification, national welfare is used as the reference including the coverage and benefit level provided by social insurance schemes. Furthermore, the social economy (also known as the third sector) which includes economic activities of cooperative societies, aid organizations, and associations is not incorporated into the study of Esping-Andersen. Probably for this reason, comparative welfare regime theories tend to neglect eras and societies in which national welfare was not fully developed or those in which the weight and role of national welfare were reduced or diffused. Japan is one of the least developed countries in terms of the industrialization and formation of the welfare state and tended to be treated as a “hybrid" type or an “exception." With an awareness of the limits of these Euro-centric regime theories, influential regime theories which are based on Japanese perspectives emerged (Pempel 1998; Campbell 2002). Even within these theories, there exist misguided debates which lack gender perspectives. It needs to be noted once again that gender relations was one of the cornerstones of welfare states in the late 20th century in the sense that income was transferred mainly to male wage-earners in these states (Miyamoto 2002). In the meantime, such welfare states have failed to respond to “new social risks." As a result, extensive “social exclusion" has emerged, and day-to-day life and social participation have become difficult for many individuals. If conditions necessary for social inclusion are to be sought, it needs to be examined how the systems and practices of families, corporations, communities, and non-profit cooperative institutions should be combined to the social policies of the government. It may be effective to consider the outcome of this effort as governance of the livelihood security system. In this framework, how can we comprehend Japanese society?