Introduction
On the first day of 2024, a powerful, 7.6 magnitude earthquake took place with its epicenter close to the Noto Peninsula in north-central Japan, claiming many lives. Relocated people are still living in shelter facilities with the bare minimum protection against the winter cold, while emergency rescue and relief efforts are ongoing. To help pave the way for recovery from the Noto Peninsula Earthquake, I would like to once again look back at the situation following the Great East Japan Earthquake, which occurred 13 years ago, review how the areas devastated by that earthquake have recovered from the perspective of economics and spatial information science, and discuss the challenges that remain unresolved and the outlook on the future of the devastated areas. While the loss of lives caused by the disaster cannot be undone and the grief of bereaved relatives is unimaginable, I would like to step back and consider measures to achieve recovery in the true sense of the word.
How Economics Understands Post-Disaster Economic Dynamics
A consensus has been reached among economists that the benefits of national and regional economic growth trickle down throughout society, contributing to the improvement of overall living standards (e.g., Dollar and Kraay, 2002; Dollar, Kleineberg and Kraay, 2016; Ravallion, 1995). First, let us consider what economic path disaster-ridden areas should take on the assumption that economic growth is essential to the improvement of living standards. A country’s (or region’s) economic size can be expressed as the equivalent of the sum of human capital, physical capital, and total factor productivity, which indicates its level of technological advancement. Under that equation, even if the economy is hurt by a natural disaster like the Great East Japan Earthquake or war—that is, if damage is caused to physical and human capital—the economy will later return to normal as a result of capital re-accumulation as long as the level of technological advancement remains unchanged. That has been the common view among the proponents of neoclassical economic growth theory (e.g., Barro and Sala-i-Martin, 1992). However, due to the dissemination of broad sets of verifiable statistics and the rise of empirical analysis that utilizes the approach of identifying causal effects, the view has emerged that it is important to verify the validity of the results predicted by that growth theory through empirical research. Among the sceptics of neoclassical economic growth theory, one school argues that a post-disaster economy becomes more stagnant compared with the situation before the disaster because of the “poverty trap” (Azariadis and Drazen, 1990; Sachs, 2005; World Bank, 2003), which refers to a lack of economic growth due to continuous low investment in physical and human capital. Another school asserts that post-disaster economies should achieve recovery beyond their pre-disaster levels as a result of increased levels of technological advancement due to greater introduction and more widespread use of innovative investments and knowhow spurred by such destruction (Aghion and Howitt, 1992). In recent years, an increasing number of empirical studies have supported the latter school’s theory—that is, the creative destruction theory—based on sets of nighttime satellite images of artificial urban lighting (each representing an area of approximately 1 km2), which serve as an indicator of national economic activity because of the strong correlation between the brightness levels of nighttime light and economic activity, in addition to data collected at the macro and microeconomic levels (e.g., Yamada, 2023; Yamada and Yamada, 2021).
Unresolved Challenges
Many of the challenges created by the Great East Japan Earthquake remain unresolved. Among the challenges that should be dealt with first are the decommissioning of Fukushima Daiichi Nuclear Power Station, the treatment of radiation-contaminated water, scientific verification of potential health damage due to the discharge of contaminated water purified in accordance with the existing regulatory standards, and the prevention and mitigation of damage to the livelihoods of fishery workers resulting from misinformation related to the safety of their fishery products. Among other unresolved challenges are (i) support for people relocated from the areas affected by the nuclear accident who still live in temporary housing as they have been unable to return to their home towns or find permanent resettlement locations, (ii) how to raise risk awareness among residents in areas with high tsunami risk, (iii) the implementation of evacuation measures that should be taken by administrative and other organizations that are responsible for providing disaster information, and (iv) the analysis of the behavior of people and companies that voluntarily or unknowingly pursue livelihoods in high-risk areas because of the precedence given to the affordability of land and housing prices. Analysis should also be conducted relating to appropriate evacuation behavior and decision-making by individuals after the occurrence of a disaster. Now that some progress has been made in the rebuilding of the livelihoods of people affected by the disaster, it is essential to implement policy measures to achieve recovery in the true sense of the word, as opposed to a mere restoration of the previous state, while addressing those unresolved challenges.
Turning Devastation into Creative Destruction—the Case of the March 11, 2011 Disaster caused by the Great East Japan Earthquake
According to the most up-to-date study (Yamada, 2023), the post-disaster impact of the tsunami caused by the Great East Japan Earthquake had disappeared by 2012, the year after the disaster, and in 2018, seven years after the disaster, more brisk economic activity was observed in the areas devastated by the tsunami compared with the situation in the rest of Japan. This analysis used nighttime light, which has strong correlation with the prefecture-by-prefecture version of the system of national accounts statistics, as a proxy variable for prefectural economic size and examined how the level of nighttime light brightness changed over the years in the tsunami-flooded areas and elsewhere. In 2012, the level of nighttime light brightness in the flooded areas was so low that any evidence of the flood-affected people coming back to live there could not be observed, a finding that indicated the near total destruction of the affected communities. However, as indicated by an increase in nighttime light brightness, economic activity in the disaster-affected areas gradually recovered following the removal of debris that proceeded at the same time as rescue and relief efforts and the restoration of infrastructure, including lifeline facilities. The briskness of economic activity in those areas surpassed the pre-disaster level, a situation that is consistent with the abovementioned creative destruction theory. Efforts should be made to analyze whether the application of innovative knowhow has achieved the revitalization of economic recovery beyond the pre-disaster level of economic activity in Tohoku and other disaster-affected regions, in the same way that the large section of Boston that was reduced to rubble in the Great Boston Fire in the 19th century achieved rapid growth thanks to the introduction and spread of the innovative, cutting-edge knowhow of the time (Hornbeck and Keniston, 2017). On the other hand, in order to determine the truth of the matter in a more reliable and precise way, it is essential to devote efforts to the following activities: designing a framework and developing a statistical approach for going beyond merely finding correlation in order to identify a causal relationship; developing a sample selection design that enables statistical estimation of the overall situation based on a selected set of typical observational data; and steadily and continuously collecting data. Conducting large-scale surveys covering households and companies requires massive human and financial resources, significant amounts of time and respect for the dignity of the survey subjects, and we have often been forced to abandon necessary surveys due to constraints. However, efforts are underway to use additional datasets which have recently become available in Japan, such as satellite images and locational and administrative information with appropriately anonymized personal data, in ways that enable follow-up verification tests. At the same time, it will also be meaningful to look at differences between the results predicted by ever-evolving theories and predictive approaches and the empirically obtained results in order to find the factors that affect the differences. Moreover, in order to secure the credibility of the datasets used and the research results obtained, it is essential to assure research independence by explicitly indicating possible conflicts of interest that the researchers may have. Last but not least, I would like to offer my condolences for the people who perished in the Noto Peninsular Earthquake disaster and express my hope for an early restoration and recovery of the devastated areas.
January 15, 2024
>> Original text in Japanese
