The focus of studies in the field of "terre-capital" has been on whether tenants' land improvements are disturbed by landowners or not. Efforts have been devoted to weaken the disturbing effects by landowners. However there remain problems to be clalified. The purpose of this paper is to examine various views on terre-capital, and to indicate the author's view, based on his own understanding of the pure theory of capitalism.
In rent theory Marx indicated two aspects of the cause of difficulties with tenants' land improvements. One is the power of landownership, and the other is the unforeseeable nature of additional land investments. His emphasis was on the former, but both aspects existed. Most later arguments took one of these two aspects.
Economists faithful to Marx's "research plan" adopted the power of landownership as the cause of difficulties with tenants' land improvements. However the power of landownership has no logical persuasiveness. Uno argued that problems came from the unforseeable nature of additional land investments. Saitoh and Inuzuka argued that tenancy periods were determined by capitalists. However Saitoh placed too much emphasis on the investment of landowners and Inuzuka neglected the unforeseeable market nature. Isomae's view also assumed a perfectly forseeable nature of the market. According to author's view, problems come from the unforseeable nature of the market. Therefore, the problem of terre-capital should be dealt with at a dimension where the business cycle is discussed. Capitalism has the driving force to institutionalize a custom of tenant-right to compensation in order to internalize costs and benefits of tenants' land improvements. Hence problems of terre-capital can be resolved in the pure theory of capitalism.

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It is not uncommon in developed countries that the government conducts a crop set-aside program to resolve an over-production problem. What is characteristic in the Japanese rice set-aside program is that the program is imposed under the condition that the subsidy for farmers who convert their paddies to other uses is not sufficient to compensate for the gap between the income from rice production and that from converted uses. Another feature is that the imposed acreage to be set aside among prefectures is unevenly allocated by bureaucratic discretion.
The purpose of this paper is to examine the political process of the allocations among prefectures in Japan's rice set-aside program, focusing on the political power balance between bureaucratic discretion and political demands from interest groups which derive from farmers' remonstrance against the burden of this program. A model was proposed and then empirically tested. Two major findings of this study are as follows:
First, in the multi-regression model, explanatory variables representing the degree of farmers' remonstrance were mostly significant from 1987 to 1998. Consequently, allocations among prefectures tend to be affected in the direction inversely proportionate to the degree of farmers' grievances. Before this period, it is suggested that the power of bureaucrats' discretion was decisive, while after this period, the policy of incorporating the supply-and-demand condition into the allocation may reflect the decrease of explanatory power of the model.
Second, it is also demonstrated that various factors which are publicly announced as those used in the calculation of allocation have held little explanatory power in the model. This suggests that those factors were announced to be considered in the allocation formula in name only, virtually being given little importance.

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