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



2008 - 2009

The maturation of society and the diversification of needs have made it necessary for Japan to adopt institutional reforms that will allow local governments to manage their administrative and fiscal systems more efficiently under their own discretion and responsibility. Such reforms require the proper division of functions and roles between central and local governments, governance by the citizens and administrative accountability, and the appropriate re-assignment of functions between the private and public sectors. In this context, ports and harbors constitute infrastructure assets with an important role to play in local economic management. However, this is an area where the division of functions between central and local governments remains ambiguous. Sufficiently flexible administrative and fiscal systems that would allow local governments, acting alone or in cooperation, to manage such facilities under their own discretion and responsibility for the purpose of revitalizing their local economies have yet to be developed.

From a fiscal perspective, ports and harbors have been constructed under the financial supports of the central government's Port Development Special Account. However, to date, no analysis has been undertaken on the following matters: survey of the theoretical treatment of the impact of disbursements from special accounts; detailed review of the financial statements of the Port and Harbor Development Special Account; estimation of the potential redistribution effect of transfers to individual ports and harbors; and the impact of the central government's port and harbor development subsidies on ex-post management efficiency of regional ports and harbors

Adequate accounting indicators have not been developed for the financial accounting of regional ports and harbors. As a result, local citizens have not been provided with a full explanation of how these facilities are managed and operated (lack of accountability). Adequate theoretical and empirical analysis has not been conducted on how lack of accountability and government regulation of ports and harbors impacts modes of ownership, inter-regional cooperation, the operational efficiency of regional ports and harbors, and forward-looking activities of local governments. In this project, we adopt a different approach from past studies to examine various aspects of administrative and fiscal systems that would be conducive to efficient management of regional ports and harbors and to the revitalization of local economies.

June 16, 2008 - June 30, 2009

Major Research Results


RIETI Discussion Papers