As decentralization is pushed forward, it might seem that its opportunity for exercising discretion will increase more and more in the process of policy-making. The process of policy-making in local government is influenced by intentions of a council, inhabitants and the firm as well as the regulator. It might be thought that the influences each agent has on the process of policy-making, that is to say, “the bargaining power” would play a crucial role in it.
This paper focuses on the relationship between regulator and the regulated firm among each of the agents involved in the process of policy-making; hence evaluating their bargaining power. Although people realise the necessity of deregulation nowadays, it has been pointed out that the firm's demand for regulation prevents this from occurring. By lobbing for regulator, for example, lobbying for the offer of post-commission job, finance aid for a public foundation among other lucrative incentives, it can be seen that the firm is in a situation of being able to influence the regurator to make a favourable ruling.
In this paper, assuming that the firm's bargaining power is determined by the quantity of the lobbying above, it analyzes that the relationship of the process of policymaking in local government and social welfare in the framework of the bargaining power being endogenously determined in the model.

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Since both central and many local governments in Japan have been in financial crisis, they are required to reduce public expenditure. It is getting difficult for them to provide all the public services by themselves even if these services are strongly needed from their taxpayers. For this reason, PFI option is being developed as a new procurement measure to enable them to achieve both reducing their public expenditure and providing necessary public services needed.
Key factors in PFI project are optimal risk allocation among the various parties participating in the project, and appropriate public assistance to concessionaire. Under an advantageous PFI contract to public sector, there is a risk that the contract itself may not be finalized, and, even if it is concluded, the risk that the concessionaire may default is still remained. On the contrary, under an advantageous PFI contract to concessionaire, there is also a risk that Moral Hazard may spoil the efficiency of the projects. Therefore, it is very important in PFI projects to design contracts, especially on risk allocation and public assistance. In this study, we focused on public assistance and examined the range of the amount of public assistance.
Conditions of successful PFI project are that the project is decided worth undertaking as a result of Cost Benefit Analysis and that three main parties in the project (public sector, investors and financiers) can achieve their own purposes in the project. The latter one can be described three conditions as follows:
(i) Public sector can reduce net expenditure or split expenditure to reduce expenditure of each fiscal year on the project, (ii) investors can make profit on the project, and (iii) financiers can be ensured that all the principal for the project and its interest can be repaid without fail.
We examined the range of the amount of public assistance on the three assumptions as follows:
(i) Public sector can fix the amount of public assistance to the concessionaire in the contract previously, (ii) there is no uncertainty in the utility of beneficiaries and (iii) optimal risk allocation is achieved.
As a result of our analysis, the range of the amount of public assistance is shown in the table. And we confirmed that this result could also be derived from Benefit Incidence Table.
In practice, the amount of public assistance depends on the public sector's requirement level to reduce expenditure, investors' requirement level of profit, and financiers' requirement level of interest through their negotiation. However, it must be determined within the range of our result.
We derived the result described above on some assumptions of risk allocation, risk cost, and uncertainty of utility in our study. However, the range of the amount of public assistance depends on them. Therefore, we must model the uncertainty of utility and risk cost, and analyze the optimal risk allocation in each PFI type in economic model after this. Moreover, we must make this analysis consistent with Benefit Incidence Table approach theoretically and develop its practical use.

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The functionality of urban transportation is remarkably reduced in Sapporo in winter because of heavy snowfall. Road heating systems are an efficient way of mitigating this problem, but their implementation has been limited in urban areas by high development and operating costs. Co-generation system makes it possible to save on fuel costs, which account for the largest portion of operating costs. This study seeks to establish a method of locating a road heating network efficiently, and of evaluating such a network.
The study is characterized by use of GIS (Geographic Information System) as a tool for location planning of the road heating network. Traffic volume, bus service level and number of pedestrians were used as factors for the evaluation. Their reciprocals were input to a GIS as link impedance. We suggested a location plan for road heating network by this method, and we concluded that evaluation is possible without factors such as distance, cost and time, which had been used. We evaluated only direct benefit (snow removal costs). More detailed evaluation has been left for the future.

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The quality of water in Lake Kasumigaura has been deteriorating since 1970's. It is due to pollution discharged from socio-economic activities of the people of the catchment area. But there is no reason to think that we should deteriorate our socio-economic activity level to improve the quality of water. Rather we can remove pollutants by constructing sewerage systems and converting land use system and restructuring industries that discharge less pollution.
In this study, we formulate a model that describes socio-economic activities, the load of pollution due to these and imply instruments in order to reduce pollution without deteriorating the socio-economic activity level. The pollutants measured through this study are nitrogen, phosphorus and COD. These have been strongly affecting the deterioration of water quality in Lake Kasumigaura.
We simulated the model from the year 1996 to 2005. Analysing the result of the simulation, we conclude that we can reduce 12% nitrogen, 20% phosphorus and 18% COD by 2005 from the emission levels of 1995.

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In 1980s, Regional labor differential showed comparatively stable although regional income disparities began to widen again. This paper aims to examine the trend of regional labor productivity differential in 1980s. Major findings of the study are summarized as follows:
(1) Regional income disparities consists of four elements; labor productivity, ratio of employed person to prefectual population, ratio of daytime employed persons to nighttime employed persons, and ratio of prefectual income to prefectual domestic product. The ratio of employed person to prefectual population pushed up the level of income disparities in 1980s.
(2) Total regional labor productivity can be decomposed into the labor productivity of each industry and the industrial employment composition. Service, construction and finacing and insurance had affected the regional labor productivity differential in the second half of 1980s.

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The analysis of regional differentials of per capita distributed income is the primary theme of regional studies. Using data on Prefectural Accounts and national census employment statistics from 1955 to 1995, we studied the factors that form differentials of per capita distributed income in the three major metropolitan areas (MMAs) of Tokyo, Oosaka, and Nagoya, for which few research papers exist.
The results of our analysis are summarized as follows.
First, per capita income levels (PCIL, =per capita income of each region/that of Japan) for each MMA were higher than 1 (the national average) from 1955 to 1995 by every 5 years. PCIL for the three MMAs peaked in 1960 and declined until around 1975-1980. However, following this decline, PCIL in the Tokyo MMA and the Nagoya MMA started to rise again, but that of the Oosaka MMA continued to decrease to the point where they were lower than that of the Nagoya MMA.
Second, PCIL in each MMA are influenced by the three following ratios: the differential ratio of prefectural income to prefectural domestic gross product (DRIP); the differential ratio of employed persons to population (DREP); and the differential labor productivity (DLP). The ratio of employed persons to population, which affects strongly PCIL, is correlated positively to the ratio of the age group of 15-64 years old, but negatively to the unemployment rate. The all-industry DLP, the strongest explanation of PCIL, is always higher for the three MMAs than 1 (national average), in the order of the Tokyo MMA, the Oosaka MMA and the Nagoya MMA. The all-industry DLP for the Tokyo MMA and the Oosaka MMA declined, whilst that of the Nagoya MMA was stable. Contributing to this was a reduction in DLP for secondary industries (the Nagoya MMA increased), and an increase in DLP for tertiary industries (Tokyo was stable), together with a change in the industrial composition for employees.
Third, observing the share of employed persons and DLP, four main patterns which present regional economic growth are apparent: an incline to the right (growth in economy); a decline to the left (decline in economy); a decline to the right (growth or decline); and an incline to the left (growth or decline). Looking at all-industries, in the Tokyo MMA there is a clear decline to the right and in the Nagoya MMA there is a decline to the right. However, in the Oosaka MMA there was a change from a decline to the right to a decline to the left. For Japan's 3 MMAs, based on individual industries and all industries, clear inclines to the right and declines to the left frequently occurred.

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Method
We have analyzed the productivity of government capital formation in three steps.
Firstly, we have estimated the productivity of government capital formation in every prefecture, and compared it with the productivity of private investment in the same prefecture. To do this, we first estimated the capital stock of both government capital formation and private investment in each prefecture, and calculated the prefecture's marginal productivity on the basis of parameters gained by the following Cobb-Douglas product function:
Y (Gross Regional Product)=A׋Number of Workers›^α׋Private Investment›^β׋Government Capital Formation›^γ
Secondly, we have picked up roads, seaports and airports as important specimens of government capital formation and estimated the respective marginal productivity achieved in each region. The necessary parameters were gained by the Cobb-Douglas product function adapted for sectional analysis: Y=AE^αK^β_??_ when Y (Gross Regional Product)=A׋Number of Workers›^α׋Private Investment›^β׋Government Capital Formation›^γ.
Thirdly, we have analyzed the employee compensation effect of government investment in each region. To do this, we calculated both its direct and indirect effects, on the basis of “input coefficient table” and “inverse matrix table” in Inter-regional Input-output Table.
Results
1. Regional productivity achieved by government investment.
(1) In almost all prefectures, both MPG (marginal productivity of government investment) and MPK (marginal productivity of private investment) are gradually declining. This is most visible in non-metropolitan areas
(2) The trend is MPK<MPG in metropolises and areas surrounding them, whereas it is MPK>MPG in other areas.
(3) Speaking of regional blocks, the trend is MPK<MPG in metropolitan areas of Kanto, Tokai, Kinki and Chugoku blocks, whereas it is MPK>MPG in non-metropolitan areas of Hokkaido, Tohoku, Ko-Shin-Etsu, Hokuriku, Shikoku and Kyushu blocks.
2. Marginal productivity achieved by the structures.
(1) General trend: the marginal productivity of the above-mentioned structures gets smaller in the order of ’airports<seaports<government investment>roads, ’ and it is declining in all of them, especially in ‘roads’.
(2) Seaports: the marginal productivity is rather stable here, and comparatively high in the Kanto, Tokai and Kinki blocks, that is, higher in metropolitan areas.
(3) Airports: the marginal productivity is highest here, especially in the Tokai, Kinki and Kanto blocks, though regional fluctuation is considerable. Among non-metropolis areas it is comparatively higher in the Kyushu block.
(4) Roads: the marginal productivity is generally low, especially in non-metropolitan areas, lowest in the Hokkaido, Tohoku, Shikoku, Chugoku and Hokuriku blocks, highest in the three largest metropolitan areas.
3. Compensation of employees achieved by public construction.
(1) The direct employee compensation effect of public construction is 0.08_??_0.11 and the indirect effect is 0.11_??_0.16.
(2) The direct effect is greater in Kanto, Kinki and Hokkaido, and smaller in the Chugoku and Shikoku blocks.
(3) The total of direct and indirect effects are greater in metropolitan areas, partly because of capital feedback to the headquarters there. This effect is largely nullified in Hokkaido, Tohoku, Chugoku and Shikoku through the capital flow out of these blocks.

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Because various functions concentrate excessively in the Metropolitan Area, external diseconomies problems occur. One way of solving these problem is telecommuting. Telecommuting entails the partial or total substitution of the trip to the workplace. In this study making use of the model of urban economics we formulate the effect of telecommuting. We find the conditions necessary for the spread of telecommuting. There are shown to depend on cost decreases. And we estimate the effect of the spread of telecommuting in the metropolitan area.

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Obstructions for smooth running of ambulances in emergency motion seem to increase as the traffic condition becomes worse and the frequency of action increases more. It needs to clarify what and how obstructs the running of ambulances and what countermeasures need to improve the running speed of ambulances in emergency dispatch.
We analyze some regional statistical data in Nagoya City to make clear whether or not the running speed of ambulance is explainable by regional characteristics. As the result of multiple correlation analysis, there is high correlation between the regional characteristics and the speed of ambulance, and the shortage of traffic facilities is the main factor of obstruction. We moreover make clear the regional characteristics within the jurisdiction area of the ambulance by means of principal component analysis, and discuss the countermeasures how to improve the running speed of ambulances.

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The purpose of this paper is to propose a common accounting framework which overcomes the apparent polarization between the SEEA¹⁾ and NAMEA²⁾ and which includes almost all the approaches and modules that the revised SEEA might require. It is hoped that this will then stimulate further discussion on the common framework for the revised SEEA.
In a previous paper, the Complete SEEA (CSEEA) was proposed as an extension of the SEEA with a national accounting matrix (NAM), a detailed rest of the world account and a global environment account. It could also be seen as an extension of NAMEA, containing full balance sheets and a detailed rest of the world account.
In this paper, the CSEEA will be further extended and elaborated, using physical accounts such as natural resource accounts and material flow accounts, and a comprehensive, flexible and consistent accounting framework which includes both physical and monetary accounting will be proposed. It is named as the Global Accounting Matrices for Environment and Economy (GAMEE) in order to stress its extended applicability to the multinational accounts and global environment accounts and also its comprehensiveness and flexibility on various approaches and modules.
The GAMEE contains a physical accounting framework for environment and economy (PAFEE) and a monetary accounting framework for environment and economy (MAFEE) within a common framework. The GAMEE is an extension of the CSEEA with physical accounts and the CSEEA is an extension of the SEEA with a NAM. Therefore, the GAMEE maintains not only the basic structure of the SEEA but also close links to the SNA. Furthermore, it is an extension of the NAMEA and can include almost all the approaches and modules, which are required of the SEEA revision.

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In this paper, we consider a waste management program in a local economy. There are two kinds of facilities: waste processing facilities and landfills. The local government plans the waste management program to minimize the costs of transportation, disposal, and negative externalities. In order to examine the optimal location problem of waste facilities and landfills and the optimal recycling system, a one-dimensional spatial model is constructed. We derive the optimal spatial structure of waste facilities and show the critical point of the recycling ratio.

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In urban areas, people face various kinds of environmental risks. We have to know the economic value of the risks properly when we implement public investment that may cause the environmental damage.
In this paper, we review the General Preference Index Model, a derivative from the Substitution Model of Choice and Value for evaluating environmental risks and apply it to the case of drinking water. We investigate the relation between the revealed choice and the consciousness of risk with a questionnaire.
The followings are the conclusions of the paper. First, according to the model, WTP depends on the distribution of the probability of hazards and the cost function. Second, the questionnaire implies that the model almost fits the structure of the drinking water choice, although the revealed choice of the private good doesn't always show the consciousness of the risk. Third, by using the General Preference Index Model, we calculate the WTP for the investment for high-level purification of drinking water. It is 235, 166 yen per year.

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We have evaluated the Aso grassland landscape by contingent valuation method and analyzed the effect of paying methods, and attributes of respondents on the estimates. In doing so, it will make helpful policy-makers to develop conservation instruments for grassland landscape.
The survey was conducted in December 1998, the survey areas are Kumamoto Prefecture that has the Aso grassland and Tokyo, and the rate of response against the number of inquiries delivered is about 30_??_40%. We have set two payment vehicles; making a fund by donation and a tax reallocation of budget.
First, the prospect for trip to Aso area in the next five years has no effect on WTP by both payment vehicles. This means that the value of conservation of grassland landscape might be considered not as use value but as non-use value. Thus, in addition to user payment, the payment by government would be also a reasonable policy instrument.
Secondly, we found that in the payment vehicles of donation, the mean of willingness to pay (WTP) has no difference between Tokyo and Kumamoto, but in tax reallocation the mean of WTP in Kumamoto is higher than that in Tokyo. This is due to that Kumamoto has more concern about the conservation of Aso grassland landscape and less income than Tokyo. Thus, it would be appropriate that local government shares a part of the conservation costs.
Thirdly, the subjective probability of conservation by policy scenario has a positive effect on WTP in both payment vehicles. Therefore, the supply of easy-to-understand information for public is very important for policy makers.
Lastly, as the mean of donation is 2, 091 yen per household, the total value of conserving Aso grassland is estimated around 1.24 billion yen annually for citizen of Kumamoto Prefecture, and using the sample return rate 0.412, the median 1, 000 yen, and total household numbers 594, 197, the reasonable project budget of conservation for the Prefecture is valued at 245 million yen.

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The Hanshin-Awaji Great Earthquake reminds us anew of the fact that Japan is a world's prominent country as to earthquake. It was an urban disaster which took away many human lives and annihilated housing stocks. In Japan, where more than 70% of the total population live in cities, sufficient town building measures for safety and security are not yet implemented even though they fear bigger disaster than Kobe might occur in Tokyo and Osaka.
Recovery of cities from the damage of great earthquake taught us a lesson that it is necessary to prepare for risks during peaceful period. It is also noticeable that reverse mortgage system played an effective role to promote reconstruction of houses in emergency case.
Among housing supplies in cities, condominiums occupy a big proportion. As these condominiums grow older, obsolete housing stocks grow rapidly, which brings about a big social problem of urgent and enormous need for reconstruction in view of preventing urban disaster. The biggest obstacle to the promotion of reconstruction is the shortage of financial capability among aged owners, who accordingly object reconstruction. If we leave reconstruction tasks untouched, the deterioration of housing stocks will be further enhanced, which would make urban environment even worse.
We propose to make use of our experiences in utilizing reverse mortgage system as one of the measures to reconstruct cities after earthquake, in order to rebuild deteriorated condominiums during peaceful period.
This paper presents views acquired through field researches such as interviews and questionnaires. This paper consists of following items; 1. Introduction. 2. Urban disaster caused by great earthquake and the recovery from it. 3. Actual application of reverse mortgage system to cases in Kobe City and Nishinomiya City and findings from its application. 4. Terms which firmly establishes of reverse mortgage system. 5. Correspondence for decrepit condominiums which promote deterioration of urban environment. 6. Application of lesson and knowledge from the great earthquake. 7. Conclusion.

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While researches on the choice probability that a consumer chooses shopping sites are vast, little attention has been paid on the research to forecast the frequency of visitors at shopping sites. The first author has developed elsewhere the Markov shoparound model to forecast the number of visitors at shopping sites in the city center retail environment where the multipurpose, multistop trip chaining of consumers occurs as their shop-around behavior. The model was constructed according to the natural causal chain in which the entry frequency over shopping sites determines through consumers' shop-around the total number of visitors at each shopping site, which includes both of visitors who visit first there and who visit there after visiting other sites. However, to get the estimates of the unknown entry frequency is the most difficult task while large retailer usually count the number of visitors to their own facilities. With this in mind, this paper addresses the inverse problem to estimate the entry frequency from the observed number of visitors and shows that our proposed method based on the I-projection modeling under incomplete data is effective and accurate enough to estimate the entry frequency and consumers' shop-around pattern.

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Emission of greenhouse gases due to various economic activities has marked a great concern for the global thinkers and policy makers. At the 3rd Session of the Conference Of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC-COP3) in Dec. 1997, advanced economic nations adopted an agreement to reduce greenhouse gases emission to 5.2% below the 1990 levels by 2008-2012.
So far a number of studies have been carried out on carbon dioxide emission. However, the issue of integrated policy regarding the emission of nitrous oxide and methane issue has been overlooked. But these gases have large GWP (Global Warming Potential) value. A composite policy to control the emission of greenhouse gases is badly needed. In addition to greenhouse effect, nitrous oxide has another negative effect for the environmental degradation of ozone layer. Therefore, reducing emission of the gas will bring a double benefit to the environment.
In this paper, we focus on nitrous oxide and try to incorporate the anthropogenic emission structure into economic model in order to control pollution by introducing taxsubsidy systems. We present an input-output model which describes emission tax imposed on industries and households. For this purpose, a computer simulation is going on to evaluate the level of GNP and damage cost for environmental protection. We have analyzed four types of pollutants; carbon dioxide, nitrous oxide, nitrogen oxides, sulfur oxides. Thirty-five industries have been distinguished. The model has been applied to the Japanese economy since 1995.

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Under the growing awareness of the global environmental issues, the Japanese Government has been enacting various laws for energy saving and material recycling to promote the formation of environment-friendly society.
The input-output analysis is a useful tool to examine economic structural problems concerning the economic growth, the industrial structure and the environment. Several researches have been conducted to identify the efficiency of resources and energy consumption of Japanese industries using input-output analysis. However, we have few researches on the relationship between the industrial structure and the resources and energy consumption in Japanese regions.
The aim of this paper is to identify the trends in the industrial structure and the consumption of resources and energy in Japanese regions using Interregional input-output tables for the period 1975-1990. The relationships between the industrial structure and the efficiency of resources and energy consumption in Japanese regions are examined by calculating various coefficients and analytical methods on regional economic linkage; the induction coefficients for resources and energy supply sectors; the resources and energy induction coefficients; the interregional input-output analysis.
The analysis of induction coefficients for resources and energy supply sectors for eight Japanese regions has revealed the efficient use of oil and coal materials had been achieved during 1975-1990. However, the other sectors, such as the mining, the electricity and the gas and water supply had not made much progress.
The reduction of resources and energy induction coefficients in terms of input structure factors (i.e. technological improvements) and the structure of final demand had been proceeded throughout the study period. However, the efficiency deteriorated in a few regions and industrial sectors under the economic growth during the bubble economy period.
The feedback effects for resources and energy supply sectors using interregional input-output model had been weakened in tertiary sector, whereas strengthened in the manufacturing industries in the eastern part of Japan. The regional disparities in terms of feedback effects for resources and energy supply sectors had been reduced in both manufacturing and tertiary sectors.

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The main purpose of this paper is to investigate the relationship between R & D and Trade Policy in an international oligopolistic market.
We analyze a situation in which two firms (i.e. home and foreign firms) compete in R & D and output. We suppose that each firm benefits from the other's R & D because of spillovers. Their research efforts are directed to reducing unit cost, being subject to various degrees of R & D spillovers.
Using a multi-stage model, we show that the optimal trade policy via R & D taxes and subsidies mainly depends on the degrees of R & D spillovers.

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This paper presents a model of rebate payments from manufacturers to their affiliated retailers as an exclusive business practice. In Japanese home appliance industries, major manufacturers offer rebates on their products and organize the integrated retail outlets that carry by contract mainly one company's products. They also offer rebates to mass merchandisers who carry many companies' products to motivate the dealers to adopt policies of maintaining a narrow profit margin and large sales volume. Each mechanism of these rebate systems brings about different effects on price and welfare.
We show that retail price is lower when transactions between manufacturers and retailers are accomplished in a spot market than it is when each downstreamer establishes an exclusive contractual relationship with a particular upstreamer by giving and receiving rebates. While the retail price level is maintained regardless of the rate of rebate payments from the manufacturer to the retail outlets, individual profits for both cooperative firms can be greater than those under market transactions by the payment rate control. On the other hand, rebate payments from manufacturers to mass merchandiser lower the retail price and increase the individual profits for both parties.
Each of the rebate systems therefore serves to increase the total profits for retailers and manufacturers. Unlike rebate payments to the mass merchandisers, rebate payments to the retail outlets decrease social surplus since the loss of consumer surplus exceeds the gain of the total profits for the vertically cooperative firms, however.

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In recent years, both of developed and developing countries are asked for more positive environmental policies in deep international coalition. One of them is Clean Development Mechanism (CDM). The study of this area is increasing. But no studies have ever tried to examine certification of emission credits in theoretical model of CDM.
The purpose of this paper is to make it clear that how ex ante and ex post certification effect on the behavior of the host and the donor in CDM through introducing a Stackelberg game model: the government of developing country chooses the CDM project in first stage, and the firm of developed country chooses the pollution abatement in second stage. In conclusion, we provide the policy implications on certification in CDM.
Our main results are that operational entities should adopt ex ante certification when the charge rate of certification is higher than a constant value. If the charge rate is equal to the constant value, two certification methods make no difference to both of the government of developing country and the firm of developed country.

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