Policy Research Domains (Adjacent Basic Research Areas) A. Institutions Related to Financial and Labor Markets, and New Corporate Law and Governance

Empirical and Internationally Comparative Institutional Analysis of the Forms of Administrative and Financial Systems for Utilizing Infrastructure Assets to Invigorate Local Economies in an Era of Decentralization and International Competition: A Study of the Administrative and Financial Systems and Governance Systems in Operation at Regional Airports

Project Leader/Sub-Leader

AKAI Nobuo

AKAI Nobuo Faculty Fellow




As Japanese society matures and social needs become increasingly diverse, institutional reforms are needed that will enable local governments to conduct efficient administrative and fiscal management at their own discretion. This requires the efficient allocation and use of administrative resources. In this context, airports constitute a key element in infrastructure assets. However, for airports to play a full role in invigorating local economies, it will be necessary to incorporate due flexibility in related institutional arrangements. Against this backdrop, this project has a two-fold purpose: to undertake financial analysis of the government's Airport Development Special Account, and to analyze the relation between airport governance structures and local invigoration initiatives by undertaking case studies and by examining factor analyses of the demand for charter services and the budget of airport terminal buildings. Research indicates that the realization of appropriate airport governance urgently requires the adoption of institutional designs that heighten local incentives.


To meet the increasing diversity of needs arising as society matures, it is necessary for local governments to take responsibility for implementing reforms to create systems that will ensure efficient administrative and financial management. Until now, the improvement of public infrastructure has been conducted by means of redistribution policies implemented by the central government in the name of "well-balanced land development." It is important that regional economies that have been engaging primarily in domestic interchange should in the future, in line with the trends toward globalization and free trade with other East Asian countries, deepen international exchanges, for which a prerequisite is to make efficient use of public infrastructure and administrative assets. This calls into question what form of administrative and financial systems will support efficient management and use under the auspices of the local authorities. In addressing this, the most important components of the infrastructure assets are roads, ports, and airports. However, in these business fields many policies are still concentrated on the central government; administrative and financial systems sufficiently flexible to invigorate local economies under independent local government management do not yet appear to have been developed. In our research we will focus in particular on the future form of governance of regional airports and national airports that are operated under a national pool system through the Airport Improvement Special Account, studying it from various angles through the analysis of the redistribution originating in the special account system, the problems that arise from airport development and regulations under the central government, and the operating efficiency of regional airports and efforts by local government bodies toward the future. We will also study, both theoretically and empirically, the desirable form of administrative and financial systems that will operate local airports efficiently and invigorate their local economies.

Until December 31, 2007

Major Research Results


RIETI Discussion Papers