Seminar Abstracts AY2011

March 22, 2012
Corporate Governance Reforms in Japan
Kazuhiro TAKEI (Nishimura & Asahi)

Since the beginning of 2012, movement on corporate governance reforms for publicly listed companies has been occurring rapidly, including the revision of the Companies Act. The fundamental system of corporate governance has been debated vigorously with regard to the publicly listed companies, encompassing topics such as the mandatory assignment of independent directors and the introduction of a European-type governance system called “a company with supervisory board.”  As a practicing attorney advising many Japanese public companies on corporate governance matters as well as a member of various government committees, the presenter will discuss the practical issues in moving towards more effective Japanese corporate governance.

February 23, 2012
Should a Megacity be Free From the Control of the Nation-state?: An Analysis of Megacity Governance from the Experience of Osaka City
Yosuke SUNAHARA (Osaka City University)

Promoting his “Osaka Metropolis” vision, Toru Hashimoto was elected as Osaka City Mayor in the concurrent elections for Osaka Prefectural Governor and Osaka City Mayor in November, 2011.  Hashimoto and the Osaka Restoration Association have attracted attention in relation to the realignment of political parties even in the arena of national politics. Although criticisms of the political style of Hashimoto and the Association are not uncommon, the debate on the issues on megacity governance systems raised by Hashimoto continues a long time ago, before the World War II. These issues, however, have been somehow ignored until today. In the ongoing political and social changes in recent years, debates on the institutions of megacity governance are called for without doubt. 

In this presentation, the author first organizes the debates on administrative and financial aspects of large city governance systems which have been conducted since before the war, and analyzes the political situations unique to megacities, with an emphasis on Osaka. The presence of megacities, which demand “exceptions” in the local governance system, has always been cumbersome for Japanese unitary government. In addition, intensifying urban problems in megacities has served as an opportunity for expansion of political forces critical of the national government. However, prewar debates on megacity governance systems stalled with the breakout of the war approaching. Although partial exemptions were granted to megacities as a result of the implementation of the “ordinance designated city system” after the war, these designated cities were treated for a long time in the same category with other municipalities, that is, as ordinary cities belonging to a prefecture. Thus, discussion of issues on megacity governance systems was sealed off. 

Changes in Japan’s politics caused by election system reform and government decentralization reforms since the 1990s are about to significantly alter the position of megacities. In response to the political changes in the 90s, realignment of political parties was promoted, and the economic disparity between urban and rural areas became apparent, which, in turn, set the stage for issues on megacity governance systems to surface as a point of dispute. It is understandable that local political parties emerged in this context, a prime example being the Osaka Restoration Association. In this presentation, current issues on megacity governance systems will be discussed by taking into account the political changes in the 1990s as described above. Subsequently, a framework will be offered to examine megacity governance systems of the future.

January 17, 2012
EU Studies Based on Governance Approaches
Kenji HIRASHIMA (Institute of Social Science)

Having become widely known since the mid-1990s, “governance” is a highly diverse concept. After exploring approaches to governance in political science as systemized by A. Benz, this seminar will review the studies on the EC/EU, which has successfully achieved a "governance turn” in the context of creation of Single European Market and enactment of the Maastricht Treaty (1993). The seminar discussion will also probe into aspects of the EU which cannot necessarily be revealed from the perspective of governance, that is, limitations of this perspective. Specifically, topics to be covered include 1) characteristics and issues of the EU which have been highlighted by discussions on concepts such as “multi-level governance” and “network governance” and 2) the historical formation of the EU’s “ sui generis” political system.

December 20, 2011
Governance of Supply Chains
Tomoo MARUKAWA (Institute of Social Science)

The 2011 Tohoku Earthquake destroyed, damaged, and affected a large number of factories and plants in the area extending from northern Kanto to the Tohoku region. This incident disrupted “supply chains” and affected factories and plants throughout the world including factories operated by Japanese-invested automobile manufacturers in China, GM factories in the U.S.A., and Nokia cell phone factories in Europe, not to mention factories and plants in Japan. There must have been many individuals who became aware of globally connected “supply chains” for the first time through this affair. Furthermore, many factories operated by Japanese companies were inundated by the floods in Thailand which began in October, causing Japanese companies’ supply chains to face yet another hardship. Through the series of hardships, it became clear that supply chains were connected in unexpected ways, which was a surprise even among the parties concerned. In the midst of these hardships, the strengths and vulnerabilities of Japan’s supply chains were revealed. This seminar will first elucidate the static characteristics of the supply chain governance of Japanese companies through comparisons with Chinese and U.S. companies. In the case of Chinese and U.S. companies, close relationships with specific counterparty companies are not assumed. While many relationships among these companies are characterized as market-based or “modular” relationships, long-term and stable relationships are a feature of the relationships among Japanese companies. This seminar will demonstrate differences in supply chain governance among Japanese, Western, and Chinese companies in the setting of the Chinese market. Furthermore, it will be examined how Japanese companies’ supply chains, upon facing the crises, responded to the circumstances. This examination will focus on the supply chains’ post-quake responses. Because Japanese companies maintained long-term and stable relationships on a regular basis even before the occurrence of the quake, cooperation among the companies led to a rapid restoration of their supply chains even in a time of crisis. On the other hand, the series of hardships revealed that Japanese companies remain subject to weaknesses in preparing for crises independently.

November 15, 2011
Economics of Income Disparity and Education Investment
Ryuichi TANAKA (The National Graduate Institute for Policy Studies)

Income disparity is a source of education disparity, and education disparity is a determining factor for income disparity in the next generation. Therefore, the income disparity of the current generation will be passed down through many generations. This generational chain of income disparity through education investment has 1) an implication as a microeconomic fact that household income is a determining factor for education investment, and also 2) an implication as a macroeconomic phenomenon that the income distribution in the current generation itself determines the education system which is sought in that society. 

In the first half of this seminar, past research studies of mine will be discussed which analyzed relationships between income disparity and the education system from the perspective of macroeconomics. Through an exploration of these studies, it will be examined how income disparity is passed down to the next generation through education investment. Particularly, attention will be focused on the notion that there exists a close linkage between income distribution and the education system in an economic system in which the quality of public education is determined by democratic voting. Furthermore, the possibility will be examined that an “ideal” education system depends on the production structure of such an economic system.

In the latter half of the seminar, positive analyses on the effects of the family background of children on their educational outcomes will be discussed. Specifically, these analyses are based on General Social Survey (GSS) data of the U.S.A., Japanese General Social Survey (JGSS) data, and the COE Parent-Child Survey of Osaka University’s 21st Century COE Program. In particular, of the various factors associated with family background, a focus will be placed on the effects of the mothers’ employment status in early childhood on children’s educational outcomes. Specifically, the types of effects caused by the mothers’ employment status on children’s final academic backgrounds will be examined. Through this examination, it will be shown that 1) these effects vary according to the gender of the children as well as that of the parents and 2) factors such as the role model effect and parental academic expectations can contribute significantly to determining children’s final academic backgrounds.

Finally, an analysis on the types of effects brought about by globalization on the relationship between income disparity and education investment will be discussed, and future prospects will be presented.

October 18, 2011
“Reproduction” Governance and Restructuring Daily Life: the Case of Japan
Hiroko TAKEDA (Komaba Organization for Educational Excellence, the University of Tokyo)

Historically, “reproduction” has been present in political economics and has been a fundamental issue at the same time. In actuality, for the maintenance and development of nations and the international political economy, it is vital that a “reproduction” process that traverses “biological,” “economic,” and “social – political” planes be sustained while these individual planes continue to be closely linked to each other. For this reason, although the actual methodology for sustaining such a process has changed according to the time and situation, it has been, for a long time, an important duty of the government of each nation to give “consideration” to multilayered “reproduction.” Despite this fact, mainstream political economics has thus far given little regard to the function of “reproduction” within national governance systems. In recent years, this research trend has been criticized by those engaged in feminist political economics and critical political economics. With this background, in the present discussion, the relationship between “reproduction” and governance will be first organized from a theoretical point of view. Subsequently, it will be argued that the perspective of “reproduction” is of great significance in analyzing national governance systems.   In this discussion, the case of Japan will be examined. In order to clarify the function of “reproduction” in the governance system, the following specifics will be addressed: how the governance system, which gives consideration to “reproduction,” formed in the historical context of modern Japan; how the governance system was adjusted and readjusted according to changes in the time and situation; and what kinds of governance techniques were utilized. Finally, the last part of the discussion will consider the significance of “reproduction governance” in modern and present-day Japan in the day-to-day life of individuals.

September 29, 2011
Institutional Structures and Governance of Local Governments: Examinations from the Perspective of Comparative Politics
Satoshi MACHIDORI (Graduate School of Law, Kyoto University)

If administrative and political elements of local governments are covered by the general term “local governance,” studies of local governance in Japan have focused on the relationship between the local and central governments, the relationship between local governments and citizens, and the role of administrative officers at local governments.  Furthermore, as for political aspects, these studies expressed academic interest overwhelmingly in the chief executives at local governments. However, because local governments are political bodies with the dual representation system (presidential system), in which the elections of the chief executives and the assembly members take place separately, is in place in Japan, it is highly unlikely that the relationship between the executive and legislative branches exerts no influence on local governance. In actuality, as suggested by examples from progressive local governments in the past and regional parties in recent times, the relationship between the chief executives and the local assemblies plays a significant role in regulating local governance. Based on an awareness of the points described thus far, the present seminar presentation attempts to offer a systematic understanding of 1) what types of institutional structures characterize local governments in present-day Japan and 2) how such institutional structures define local governance, by employing the institutional analysis of comparative politics (comparative analysis of political institutions). Specifically, the present presentation focuses on electoral rules and the separation of power, which are emphasized in the comparative analysis of political institutions. For the case of local governments in Japan, the characteristics of these systems are as follows: the multi-member district system with single and non-transferable votes (MMD/SNTV) and the presidential system which grants supremacy to the chief executive has been adopted. The presenter wishes to address what these characteristics bring about. At the same time, the presentation also examines 1) what types of responses the characteristics of governance that originate from the institutional structure tend to present to the issues faced by local governments in present-day Japan, and 2) how such responses should be evaluated.

July 19, 2011
Financial Governance of Japan: Its Achievements and Challenges
Gregory W. NOBLE (Institute of Social Science)

Japanese governance has entered a gloomy era. Despite a series of administrative reforms and a long-awaited turnover in partisan control, four prime ministers in a row have left office in a year or less. Political observers and ordinary citizens unite in decrying the perceived failure of the current Kan cabinet to respond effectively to the Northeastern earthquake, the ensuing tsunami and nuclear accident in Fukushima, and the pressing need for rehabilitation and reconstruction of the Northeast. Against this background, Japan’s massive budget deficits and accumulation of the largest government debt in the world loom ominously. Seen in conjunction with the financial and fiscal crises gripping Greece, Ireland, and many other countries, democratic governance seems to have suffered a miserable failure.

Sluggish economic growth, a declining birthrate, and an aging population have certainly put Japan’s public finances in a dire state. Over the past decade, however, the Japanese government has responded far more capably to these challenges than generally realized. Considering the pressures on public pensions and health care costs stemming from demographic aging, the government has proved surprisingly successful in restraining aggregate expenditures. Qualitatively, the major focus of government spending has shifted from particularistic (and often wasteful) expenditures such as rural public works to quasi-public “political manifesto” goods. On the revenue side, a consensus has gradually emerged among political elites that consumption and other taxes must be raised; the remaining question is primarily one of timing.

Examination of the post-war financial history of the U.S.A., European countries, and Australia reveals that even though external shocks often shove government budgets into the red, over the medium to long term the ability to re-establish financial equilibrium is surprisingly high. Government expenditure increases ease as economies recover, and political resistance notwithstanding, tax rates can be increased when necessary. According to the latest results of research on public finances in Europe, the countries achieving financial recovery in the past utilized mainly two methods: delegation to the Finance Ministry, or partisan pacts among the leading political parties. In Japan, delegation was frequently used under LDP rule.

In the future, which method is more likely? What kinds of problems have to be overcome? In order to examine these questions, I will discuss the effects of the following six issues on public finances:
1. The aftermath of the long era of LDP dominance
2. The presence or absence of experience in financial and fiscal crises
3. Ideological distance among the voters and the political parties
4. Reapportionment and municipal mergers
5. The bicameral system and *nejire kokkai* (deadlocked diet)
6. The frequency of elections

June 21, 2011
Large-scale Natural Disasters and the Role of the Third Sector with a Focus on the Relief Efforts of Consumer Cooperatives after the 2011 Tohoku Earthquake
Akira KURIMOTO (Consumer Co-operative Institute of Japan)

The activities of consumer cooperatives after the 1995 Kobe Earthquake are reviewed in order to examine the roles of consumer cooperatives after the 2011 Tohoku Earthquake from temporal and spatial points of view. Co-op Kobe was the largest consumer cooperatives in the world with 1.2 million members (membership ratio: 61%). As a result of the 1995 Kobe Earthquake, the headquarters and 17 out of the 155 stores were fully destroyed or severely damaged, 5 cooperative purchasing centers were damaged, and one distribution center collapsed, all of which resulted in the loss of 50 billion yen. Starting on the day of the earthquake, Co-op Kobe began providing material supplies at and in front of its stores as a relief effort for the earthquake victims. Yet, the cooperative purchasing program was halted for a little under 2 months, and goyokiki (goyokiki: order-taking and delivery service) was resumed after this period. Furthermore, according to the “Agreement on Material Supplies and Other Services in Emergencies” between Kobe-City and Co-op Kobe, the Co-op delivered daily commodities to evacuation centers and provisional housing. In addition, Co-op members were, from the beginning, engaged with relief efforts in the form of confirming the safety of citizens and providing emergency aid through Kurashinotasukeai no kai (the Group for Mutual Support of Livelihoods). This effort expanded to activities for providing aid on a continuous basis as a newly established Co-op Volunteer Center. Moreover, the number of volunteers dispatched from Co-ops across Japan reached 10,000 (including multiple dispatches). These activities by the Co-op led to a news report titled “Co-op providing service to victims at disaster sites.” Through the efforts toward “creative reconstruction,” Co-op Kobe rapidly restored its operation. Subsequently, as a result of increased competition, sales decreased, and the restoration of livelihoods and communities remains half completed. However, the dispersion of infrastructure in preparation for disasters, agreements with local governments, and the implementation of map-based drills have spread to Co-ops across Japan. Co-ops also contributed to institutional reforms such as the laws governing nonprofit organizations and the Natural Disaster Victims Relief Law (1998) by mobilizing public opinion, which has to led to the Co-ops’ current response to earthquakes.

In the 2011 Tohoku Earthquake, stores, distribution centers, and other buildings of Miyagi Co-op (membership ratio: 70%), Iwate Co-op, and Co-op Fukushima were damaged. As a result, Co-op delivery services in the Tohoku region were disrupted for a month, however, the Co-ops started providing material supplies at their store, by food vans, and also through goyokiki services on the day of the earthquake. They also provided material supplies to evacuation centers and other locations according to agreements with local governments on material supplies. A total of 3,587 people (1,190 trucks) were dispatched (including multiple dispatches) from Co-ops across Japan, and approximately 710 thousand items, including food and fuel were provided as relief supplies. The Japanese Consumers’ Co-operative Union also procured and delivered 1.17 million items including food, drinking water, and blankets (633 10-ton trucks). Although Co-op members have been involved with confirmation of victims’ safety, relief fund raising, and volunteer activities, the recent formation of networks that cover the entire third sector such as the Japan Civil Network for Disaster Relief in East Japan is worthy of attention. For the foreseeable future, livelihood support for earthquake victims, reconstruction aid for Co-ops affected by the earthquake, support for producers by creating demand for products from the affected sites, and prevention of harmful rumors remain important. At the same time, future policy-related issues include the creation of livelihood and communities for mid- to long-term restoration of the affected sites, revitalization of local economies, and the examination of energy policies, earthquake disaster prevention measures, and business continuity plans (BCPs).

May 17, 2011　Asking One Too Many? Why a Leader Needs to be Decisive (joint with Takashi Shimizu)
Junichiro ISHIDA (Institute of Social and Economic Research, Osaka University)

It is often touted that decisiveness is one of the most important qualities to be possessed by leaders, broadly defined. To see how and why decisiveness can be a valuable asset in organizations, we construct a model of strategic information transmission where: (i) a decision maker solicits opinions sequentially from experts; (ii) how many experts to solicit opinions from is the decision maker's endogenous choice. We show that communication is less efficient when the decision maker is indecisive and cannot resist the temptation to ask for a second opinion. This result also implies that a decision maker can be made better off by committing herself to taking an action immediately, if such a commitment is ever feasible. We also discuss the relationship between decisiveness and personal traits such as fairness, open-mindedness, and selfishness and derive some implications for organizational design.

April 28, 2011
Post-March 11 Governance
Atsushi SUGITA (Faculty of Law, Hosei University)

Because of the enormous disasters and the nuclear power plant accident which has not yet been settled, the sense of normalcy has been lost, and we have found ourselves with no choice but to re-examine every assumption that was made before March 11. Private governance which was modeled after corporations appears to be showing its limitations. It is likely that the role of the government will be re-evaluated in the short term for the restoration and reconstruction from the aftermath of the tremendous and extensive disasters. In addition, a certain degree of reassessment of the decentralization of power cannot be avoided. After the 1995 Kobe Earthquake, expectations for the realization of civil society increased, and discussions on governance entered a new stage. In the face of significant risks to people’s lives and livelihood associated with the nuclear power plant accident, discussions on “bio-power” have been developing in an unprecedented manner.  What questions about political theories of security are being asked by the earthquake and nuclear crisis?  What does the “distance” between Fukushima and Tokyo imply? What about our responsibilities for imposing dreadful labor on the workers at the Fukushima nuclear plant? We stand speechless in front of the violence of Mother Nature and the physical threats caused by humans. What way of thinking will allow us to construct a better society?  I would like to use this seminar opportunity as a first step to answer these questions.

April 19, 2011
The Governance of Modern Japan and Judicial System Reform
Iwao SATO (Institute of Social Science)

One of the significant changes in the legal system of Japan in recent years is the breakaway from a resource-conserving style judicial system. After World War II, Japan’s judicial system was characterized by a small number of legal experts and lawsuits and a small budget. This circumstance was supported by the past mode of operation of the government and businesses, which relatively infrequently called for involvement of the judicial system. However, currently, these conditions are in the process of considerable change.  The number of lawyers has increased rapidly, and data show the tendency that lawyers, the number of whom has been increasing, are now located not only in large metropolitan areas  but are well spread widely across Japan, especially in the five-year period beginning in 2005. The number of lawsuits has also been on an increasing trend. The courts have changed their 40-year old policy of maintaining stable judiciary institutions characterized by a small number of judges and have been proactively increasing the number of judges. There has been a notable increase in the budget for legal aid to low-income earners. It appears that Japan’s judicial system is changing into a system that mobilizes more resources than earlier.

The Judicial System Reform which was introduced in the late 1990s served as momentum for the changes in the judicial system described above. However, Judicial System Reform itself has been linked closely with changes in the governance of Japanese society. Demands for enhancement of judiciary functions have been included throughout proposals for new styles of governance, which are currently being sought in various areas of Japanese society. It is clear that these demands have served as a driving force for judicial system reform and have, in fact, also led to the change from a resource-conserving style judicial system to a resource-mobilizing style judicial system.

In the present seminar presentation, the notion that the change in governance of each of three areas, i.e., livelihood security, local governance, and the market/corporations, which are the focus of the institute-wide joint research project, Re-examining Governance , possesses momentum that leads to enhancement of judiciary functions will be acknowledged. With this acknowledgement, the state of the change of the judicial system, which is one of the important players in governance in modern Japan, and the issues facing Japan’s judicial system despite its changes will be clarified empirically based on judicial statistics and data from investigations in which the presenter was involved.