Public Choice Studies
Online ISSN : 2187-3852
Print ISSN : 2187-2953
Volume 2017, Issue 68
Displaying 1-11 of 11 articles from this issue
Foreword
Articles
  • Konosuke Noto, Ichiro Innami
    2017 Volume 2017 Issue 68 Pages 5-26
    Published: 2017
    Released on J-STAGE: March 29, 2023
    JOURNAL FREE ACCESS

     In the Japanese pharmaceutical distribution market, various trade practices exist such as"rebates and allowances"paid by pharmaceutical companies to wholesalers, and"lump-sum bulk purchase and delivery before closing price agreements (LPDP)"between wholesalers and medical institutions (including pharmacies). Ministry of Health, Labour and Welfare has been trying to improve (diminish or eliminate) these trade practices.

     In this paper, we quantitatively examine the long-term impact of improving the LPDP on the reimbursement-prices and profit structure of the market. To this end, we developed a simple distribution market model including the above trade practices, and conducted a simulation by controlling the LPDP elimination rate at 25%, 50%, 75%, and 100%.

     The results are as follows. Eliminating the LPDP leads to the higher delivery prices and thus the higher reimbursement-prices. In the case of elimination rate at 100%, the drug price is higher than the standard price by 181% at most. Further, in the cumulative amount of the estimates in 23 years, the profit margins of the pharmaceutical companies and wholesalers are increased by 69% and 277% respectively. Conversely, the drug-price margins of medical institutions decrease by 41%. At the end of this paper, we discuss some policy implications.

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Featured Articles
  • Haruo Kondoh
    2017 Volume 2017 Issue 68 Pages 27-45
    Published: 2017
    Released on J-STAGE: March 29, 2023
    JOURNAL FREE ACCESS

     The purpose of this paper is to reinvestigate the relationship between public investment in Japan and politics from the viewpoint of public choice. For this aim, I look at the data on public investment in Japan mainly since 1980's both at the macro and regional level using figures of Administrative Investment published by Ministry of Internal Affairs and Communication. Moreover, I review previous studies which focused on public investment from the viewpoint of public choice including literature on ‘Political Business Cycles’ and ‘Pork Barrel Politics’. After that, I conduct empirical analysis using panel VAR approach in order to clarify the dynamic interrelationship between public investment and politics, intergovernmental transfer and demographic factors. The sample is a prefectural-level panel data for the period of FY 1985-2010. Granger causality tests and impulse response functions clarify positive and bidirectional causality between public investment and intergovernmental transfer or ratio of construction workers which I regard as local interest group seeking public investment. These results imply that both intergovernmental transfer and politics have played important roles deciding public investment policy in Japan. Moreover, empirical results show that higher ratio of aged 65 or above leads less public investment. This may be a sign of graying democracies in Japan.

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  • Nobuaki Takahama, Akihiro Kawase
    2017 Volume 2017 Issue 68 Pages 46-65
    Published: 2017
    Released on J-STAGE: March 29, 2023
    JOURNAL FREE ACCESS

     To clarify the current situation of enforcement process of the Soil Contamination Countermeasures Act (SCCA) in Japan, we analyze the status of administrative order issuances of the local government under the Article 4 of the law. The Article 4 of the SCCA came into force in 2010, and its purpose is to carry out soil investigations of the site with the possibility of contamination in the case of changes to the form or nature of land. Having received notification of changes to the form or nature of land, the local government examines the risks whether the land is contaminated by a designated hazardous substance under the criterion in the ordinance of the Ministry of the Environment. Completing administrative procedures, the prefectural governor is able to order the land owner to conduct an investigation of the site with high risk of contamination. In fact, the number of administrative orders remains relatively low (about 2%) so far comparing to the number of notifications. To understand the decision making process inside the local government, detailed analysis on administrative official's behaviors in issuing administrative orders is needed. We conduct a preliminary analysis on enforcement process of the SCCA using data issued by the Ministry of the Environment. Our results imply that there is a possibility that the regulators attitude toward examination of the contamination risks has some differences among the organizations.

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  • Yosuke Sunahara
    2017 Volume 2017 Issue 68 Pages 66-84
    Published: 2017
    Released on J-STAGE: March 29, 2023
    JOURNAL FREE ACCESS

     Since 1996, a large number of referendums, mainly on those related to municipal amalgamation ( "Heisei-Dai-Gappei" ) are being held in Japanese local governments. In this paper, the author focuses on the referendums which question the pros and cons of local government's projects, and compare the processes by which referendums are decided, the options that the voters can choose, and the degree of voting participation. We find that the issues of early phase of referendums were linked to the problem of NIMBY (Not-In-My-Back-Yard), especially nuclear plants, industrial waste disposal sites, and military bases. In this phase, the referendums which finally decided by local assembly members who tended to oppose referendums were significant opportunities to exercise "veto power" by residents in the policy process of local governments. However, as the referendum spreads, there are increasing number of referendums which question the pros and cons of construction of public facilities in particular city halls. Local assembly members do not necessarily oppose such new type of referendums, and some local politicians may rather actively ask for the implementation of referendums to demonstrate their influence in the policy process. Based on such experiences of the transition period, the author argues that the referendum should be institutionalized as the exercise of veto by the residents.

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  • Eiji Sumi
    2017 Volume 2017 Issue 68 Pages 85-102
    Published: 2017
    Released on J-STAGE: March 29, 2023
    JOURNAL FREE ACCESS

     Uncontested local mayoral elections have been common for at least 20 years in Japan. These days, about 25% of the City mayors was elected without a vote. This paper examines the determinant factor of uncontested local mayoral elections from 2010 to 2014 empirically. The main conclusions of the study are as follows: First, the probability of uncontested mayoral elections is unlikely to be higher, when the ruling and opposition party support the same candidate. Second, the probability of uncontested mayoral elections is likely to be higher, when incumbents run for a second term or more to a forth term or less. Third, this study found that four-year average uncontested mayoral elections rate in the prefecture significantly explains the prefectural-level differences of uncontested mayoral elections using multilevel analysis.

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  • Masayuki Tashiro
    2017 Volume 2017 Issue 68 Pages 103-124
    Published: 2017
    Released on J-STAGE: March 29, 2023
    JOURNAL FREE ACCESS

     The delocalization and consolidation of water supply industries have been frequently executed with fiscal decentralization confining municipal mergers. The water rates must be unified after the consolidation of those industries in a particular region. In reality, most water supply industries have not revised those rates for many years.Consequently, there will be some problem to be inequality of the water rates in a particular region. This paper analyzes the revision of the water rates considering municipal mergers. As a result of analysis, municipal mergers contribute to progress the revision of the water rates. Also, the revision of the water rates and operating profit have strong negative correlation. In conclusion, this paper want to say that if most water supply industries are the self-supporting accounting systems, they will not execute the revision of the water rate. So, the inequality of water rates in a particular region will not be solved in the future.

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  • Shunsuke Sekiguchi, Hayato Nagase
    2017 Volume 2017 Issue 68 Pages 125-139
    Published: 2017
    Released on J-STAGE: March 29, 2023
    JOURNAL FREE ACCESS

     Lots of studies on city have focused on city size. These studies aimed to estimate an optimum size of a city from the view point of the efficiency in public services, and to reveal the factor of amalgamation. However, in Japan, the number of amalgamation is gradually winding down, so the significance of focusing on amalgamation would be decreasing. On the other hands, the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) has encouraged municipals to make the urban facility location plan which promotes "compact city", and to request of the municipals that they change the city structure. Based on the above, this paper focused on the effort of municipals on the city structure.

     In general, since the concept of "compact city" is recognized as desirable, MLIT has encouraged it, but it's still the case that under 20% of municipals seek to make the plan. Why so low? In order to answer this question, we made a hypothesis that whether each municipal seek to make land-use planning or not is depending on the ratio of agree or disagree on the plan. Result of testing the hypothesis, this paper come to the conclusion that the hypothesis was rejected.

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