Research activities in regional science must be organized in response to a variety of social needs, most of which are found seeking the direction of “Customer Centered Innovation” originally advocated by Chesbrough ([2]) . This tendency will lead regional science to the core of “science for society”. This paper presents the thinking and findings of a joint study between medical professionals and regional scientists interested in upgrading policy design competence of local governments for medical services.
The research team carried out a series of case studies on local deteriorations in medical service of hospitals managed by local governments and tried to conceive a proper system to draw an individual conceptual map of what specifically caused the deterioration in medical services, assuming each case may have a different map of causes. The findings of this study indicate each local community has suffered deteriorated medical service caused by a set of causes very specific to the community, denying an easy set of policy-mix applicable to each community. This paper also reveals another important factor of “Japanese failure” that has caused many social problems aside from poor medical services. More specifically, we describe findings from “Health Data 2007 of EU” that report considerable difficulties in upgrading medical service systems in Japan have been caused by poor policy generation in the Japanese government sectionalized ministry by ministry, no proper policy discussions often necessary for forming a policy which has cross-ministry components and impacts of the nature. Japan is experiencing a wave of social change that naturally requires a paradigm-change in public choice, but Japanese governments, both central and local, have failed to realize this.
Although many policy scientists related to public choice have argued for a long time that governmental organizations must abandon paternalism public choice managed by the government sector, decision processes of public choice in local communities have been improved little so far. The authors conclude that upgrading citizen participation and refining the scientific base of policy design for regional medical systems must be promoted and combine the above stated two activities to render local governments better at building their capacity in policy formulation.

JEL Classification: I10, I18, I19

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Due to an economic background that most remote islands are less developed in terms of capital accumulation, the government of Japan continues to allocate financial assistance to those islands. This paper is an exploration of the influence of publicly provided social capital on the regional economy of remote islands. Concretely, we measured the economic impact of the accumulation of regional public-capital by an empirical analysis. Since there are several regions consisting of many islands with different cultural, historical and economic aspects, we focused our geographic attention on the Okinawa islands located in southern Japan.
We begin with a discussion of the constructing data set concerned with publicly provided capital accumulation in Chapter 2. The range of the research is limited to Okinawa because there are several regions consisting of many islands that have different cultural, historical and economic aspects. Subsequently, a set of empirical analyses is described in Chapter 3 with an estimation of the conventional production functions.
As a result of the analyses with estimations of conventional production functions, the impacts of exogenously provided capitals were observed to play negative roles on the private economy. Second, the degree of the negative impact was higher in agriculture than tourism. Third, transport-related regional capital, especially the construction of roads, showed low effects (negative impact) on the regional economy. Finally, a spill-over effect of the central island (Naha area) on the other islands was high.

JEL Classification: H410, R110

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This study is focuses on Interregional Payment Balances (IPB) in Japan as the measurement of “Doshusei”, the Japanese domestic political reform.
Conclusions for regional economic policies are suggested in the following three areas. First: deficits in IPB are formed when the imports of a region are higher than the exports of that. Deficits in the IPB have been covered for a long time by the central government in Japan as the “gifts”, but today this scheme has become difficult and needs to be changed. Second: profits in regional economies are more often brought by the intra-regional expenditures than by the regional imports. This shows the orientation of the open market is not always profitable for the regional economy. Third: IPB depends on both the marginal propensity to consume and the marginal propensity to import in a regional economy. The former is related to net savings and the latter to net exports in the regional economy. These two curves hold the same equilibrium point and both curves are not fixed on the only one point but flexible. There are most of equilibrium points. Thinking such as point of view, it is possible to escape from simultaneous dilemma of interregional economic unbalance. This study is a model application from this theory to the regional economy “Doshusei”.

JEL Classification: H62, H72, R12, R13, R58

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Tourism is an essential industry in Okinawa prefecture. The number of tourist increase year by year, with approximately 5.7 million tourists in 2007. Development of the tourism industry and an increase in tourists causes various social problems in this small island society. One major problem is a lack of water. Inhabitants of Okinawa prefecture are troubled with not enough water, because Okinawa has a subtropical oceanic climate and is composed of very small islands in the Ryukyu archipelagos. Some water resource developments have been done since Okinawa's reversion to Japan in 1972. However, water demand has increased with an increase in population and tourists so the risk of drought has increased.
This paper focuses on the risk of drought by describing the changes in the regional social environment, water use and availability of water. Particularly, a risk assessment was carried out on the relationships of the tourism industry and quantity of water use. At first the water service enterprise of the island regions and information on water resources were gathered by survey of persons in charge of water supply services, and the relationship of these factors to island social problems determined by a structural model. Second, changes in the social environment due to tourism and effects of the promotion of tourism on water demand were clarified. Third, we analyzed the quantity of water necessary to meet the water demands of tourism. In addition, to it is described influence to give to water use in tourism supplies it with water in limited water supply. This study is a start for social planning of sustainable resort islands, and important for clarifying the carrying capacity of tourism based on water resource management.

JEL Classification: Q01, Q25

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Agriculture, forestry, fisheries and food industry products have been the foundation of the Japanese diet while providing Japanese society with the basis for living and cultural activities. Nevertheless, along with the progress of the Japanese economy, agriculture, forestry, and fisheries sectors have experienced a considerable decline in production and employment. The Japanese government has adopted various measures to reverse the decline of Japan's food self-sufficiency ratio under the Basic Law on Food, Agriculture and Rural Areas enacted in 1999. Comprehensive economic analyses of the situations of agriculture, forestry, fisheries and their related industries are necessary to cope with structural problems facing Japanese primary industries.
This study examines the regional economic structure in Japan using input-output tables from segmented agriculture, forestry, fisheries, food and related industries. The study employs skyline analysis, analysis of the interregional trade balance, and structural decomposition analysis to identify present issues related to Japanese primary industries.
Results reveal that interregional trade among metropolitan and local regions is a major determinant of agriculture, forestry, fisheries and food industries production. The decline in interregional trade in the 1990s has adversely affected the production of primary industries in Japan.

JEL Classification: C67, O13

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This paper focuses on the “Special Zones System for Structural Reform” that was introduced in 2002. Under this system, any stakeholder (e.g. local public authorities, NGOs, private companies) can make proposals with regard to deregulations. If their proposals pass examination by the central government ministries, the relevant regulations are relaxed for certain fixed periods. This system is considered to be effective for local area development. However, despite its potential, this system is not working effectively and revisions are needed.
In this paper, we describe and analyze the processes of the special zones system as a game-theoretical model based on positive political theory (e.g. Ferejohn and Shipan, 1990). The model analysis led to the following conclusions. First, the special zones system has two positive impacts on regulatory reform, i) it utilizes the incentives of local governments to make better regional policy and causes diffusion of deregulation, and ii) it makes possible social experiments on deregulation. Second, although the special zones system accelerates regulatory reform, it does not lead to socially optimal regulatory reform. Third, the special zones system empowers the incentives of stakeholders in smaller regions more than large regions. This is because smaller regions are more appropriate for doing social experiments. Fourth, a decrease in the cost of the deregulation burden by the government may not promote regulatory reform because it increases the probabilities of proposals being rejected and weakens the incentives for the local governments to make proposals. Additionally, we expanded the basic model and analyzed it to determine problems in the processes of making proposals. We consider an act of making a proposal as a collective action by various stakeholders in a region. The model analysis led to the following conclusion, it is important to coordinate the interests of various stakeholders, especially when the special zones are related to community development.

JEL Classification: H41, H54

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Edo is the former name of Tokyo, and the Edo period was from 1603 to 1868. In 1603 the Shogunate Government of Edo was formed by Ieyasu Tokugawa, and the Edo period was ruled through a feudal system for all of its 265 years. Edo had high levels of consumption as the center of politics and there were many samurai that were a non-laboring class. Though Edo had the largest population and the highest density in the world in the late Edo period, it appeared to have the most unpolluted water environment because of human waste recycling and the circulation system in the Edo society. Hence, the target period of this study was the end of the Edo period during the 1800's.
In the early part of the Edo period, Edo was not clarified as a spatially-governed area because it was ruled by feudal policies such as land-owning and class systems. In 1818 the city area of Edo called “Shubiki” was spatially defined by the conference chamber of the Edo government. In this study, based on the “Shubiki” map announced by the Edo government in 1818 and other materials on land-use in Edo, we delimited the spatial area of Edo and analyzed the land-use patterns of the city by digital mapping using GIS. The land use patterns of the city area of Edo were classified into 11 categories, and the area of each category was estimated. The delimited city area of Edo was assumed as the land area discharging water pollutants flowing into the Tokyo bay in the 19th century.
Next, the socio-economic activities and environmental impacts of Edo city were quantitatively estimated based on documents about the population and the production data of the 19th century. On the basis of collected data such as the delimited area of Edo city, population, economic activity and area of land use, the environmental impacts on Tokyo bay were estimated by the inflow of total nitrogen (T-N) using the material flow model applied to Edo city, taking into account the recycling system of human wastes as an organic fertilizer for farming in the suburbs of Edo city.
Results of the model showed the T-N inflow into Tokyo bay from the household sector and industry sector of Edo city was 540 tons and 13 tons, taking into consideration the recycling system of human and livestock wastes for farming. The amount of T-N inflow from non-point generation sources was estimated at 156 tons. On the other hand, the total amount of T-N inflow from the Tokyo bay area in 2000 was approximately 87,000 tons, 123 times that during the Edo period.
In conclusion, this study shows that a quantitative method such as the material flow model for Edo is useful to analyze the historical situation from the viewpoint of socio-economic and environmental aspects. Especially, the estimation of favorable conditions of the water environment in the past should be reflected on as a concrete example of the ideal sea environment and a future vision of marine environment revitalization, for instance in the Tokyo Bay Renaissance Project.

JEL classification: N95, Q51, Q53, Q56

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The Japanese method of capital gains taxation, in which the tax on stocks is levied according to the sale price rather than the realized capital gains, has not been used since 2003. This paper analyzes the effects of reform from the Japanese method to the conventional method of capital gains taxation on capital accumulation and social welfare. Additionally, this paper analyzes the effects of the reform from conventional capital gains taxation to other capital income taxes.

JEL Classification: G32, G35, H22, H24, H25

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We have already defined the environment as three phases: the geophysical-, ecological-and sociological environment, called the GES environment system. Kamo River, which flows through the center of Kyoto City, has abundant plants and animals with mountainous scenery and deep historical and cultural connections with the people of Japan. Because of these attributes, we decided evaluations from the view point of Socio should be done on-site. In this research, environmental evaluations were done, not only using conventional qualitative or quantitative indicators of the Geo and Eco environment, but also focusing on Socio aspects.
In the Socio environment, riverside residents (from Suemaru-Cho; along the main stream of Kamo River) were selected for a social survey because they were regarded as playing a main role in participatory riverside environmental management. Aquatic birds were chosen as being representative of the Eco environment because according to the social survey residents are very interested in them. The properties of the Eco environment were measured throughout a year by observing and recording the bird distribution including the species, number of birds and locations. As the base of the Socio and Eco environment, the properties of the Geo environment, including amenities, were measured using GIS (Geographic Information System).
The survey contained measurements of riverside residents' impressions of the Kamo River environment using the SD (Semantic Differential) method. Relation analysis using Cramer's coefficient are performed to know which feelings of GES environment or concerns of Eco relate to the impressions. Using factor analysis the factors which formed their perspectives of Kamo River are extracted and interpreted. Finally it is shown that an environmental evaluation system using impressions can be established.

JFL classification: Q51, R10, R53

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Using a two-stage differentiated-product Cournot duopoly model with technological spillovers, this paper investigates the effect partial ownership arrangements (POAs) among rivals has on the market outcome when firms also compete in a non-production activity, R&qmp;D. Although POAs are found to be associated with lower profits, when the degree of product differentiation is small and technological spillovers are relatively large, they are found to result in higher R&qmp;D, output and social welfare levels.

JEL Classification: D43, L13, L15

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The Japanese government is making a major policy push to promote a recycling-based society that fully utilizes materials and improves waste recovery. It is therefore becoming increasing important for organizations to properly disclose information concerning their environmental initiatives and activities so consumers and investors will take such information into account when making purchasing and investing decisions. The purpose of this study was to examine the availability of environmental information produced by organizations as disclosed in corporate social responsibility (CSR) reports.
From the perspective of the 2000 Basic Law for Establishing a Recycling-Based Society and related recycling regulations (e.g. for containers and packaging, household appliances, construction and demolition waste, and food waste), we selected three industries—motor vehicles (the End-of-life Vehicle Recycling Law), household appliances (the Home Appliance Recycling Law), and beverage industries (the Containers and Packaging Law)—and reviewed their recycling activities outlined in CSR reports.
The reports had the following features :
(1) At the planning phase, the producer takes recycling into consideration. Each production process makes all possible efforts for resource saving.
(2) In the daily use phase, eco-oriented products contribute to resource saving in the form of energy, water and other resources.
(3) In the treatment or disposal of post-consumer products phase, the producer makes efforts to re-generate parts, reuse commodities and recycle products.
We conclude that CSR reports are useful for communicating environmental information to diverse stakeholders, enabling them to evaluate corporate environmental performance.

JFL classification: Q53, Q56, D70, D82

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Recently, in Japan, local authority management has become difficult in many regions where population decrease, declining birthrate and a growing proportion of elderly people are seen. Geographical inequality has increased remarkably due to the progress of centralization to the Tokyo Metropolis. In order to overcome these problems, the Japanese government is promoting major structural reforms known a “Sanmi ittai no Kaikaku”. Therefore, independence from the central government is necessary in finance, and improvements in the efficiency of administrations and finances are required.
In this study, socioeconomic data of local authorities including the population and the financial conditions were used as indexes of local authorities in the Shikoku region. The conditions of the local authorities in Shikoku were explained from various viewpoints. Next, the effect of municipal merger, called “the Great Merger of the Heisei Era”, was verified by applying both indexes before and after the municipal merger.
First, the status quo of the region was clarified by analyzing the data in detail. Local authorities in the Shikoku region were classified based on conditions of management. The administration of local authorities in each area of Shikoku was classified by using these indexes and a model to evaluate these authorities was developed. Change in the municipal merger was verified by applying both indexes before and after the merger to this diagnostic model.
As a result, many regions were found where the administration of local authorities was improved by the municipal merger, but there were also regions that became worse. Therefore, mergers are not effective for all regions. Due to the situation that some mergers are successful and some are not, it is necessary that mergers should be well planned in advance. Mergers should not be done purely due to geographic location.

JFL classification: H11, R15

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The term ‘visualization' has been used in various fields of society in recent years. ‘Visualization' was originally used in fluidics and then in natural sciences, social sciences and human sciences. In the fields of evaluation and decision aids, ‘visualization' is required for accountability, transparency and freedom in information systems. However, it seems the idea of ‘visualization' is still indigested. In this paper, first we searched for articles that mention ‘visualization' and then outline past research on ‘visualization'. Next, we discuss ‘visualization', especially focusing on decision aids. Specifically, we organize the structure and problems of ‘visualization', first the aims and the positions for ‘visualization', second the stage of ‘visualization', and third the contents and techniques of ‘visualization'. Consequently, the following results were obtained: 1) it is necessary to carefully consider the gaps between the subject and object for ‘visualization', 2) ‘visualization' must fit the decision aid process, 3) it is necessary to choose appropriate methods for the particular ‘visualization' purpose. Finally, we should not forget that ‘visualization' may create ‘un-visualization' as lighting makes shadows.

JFL classification: D70, D81, D82, Q51, D53

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In this study, we compared various examples of road pricing projects around the world. In particular, we made a case study of road pricing projects in the cities of United Kingdom, Norway and Singapore. We then imposed a hypothetical road pricing system in Sapporo on the basis of revenue to help cover the city's spiralling winter road maintenance costs. To this end, we designed two different winter-time road pricing systems; a bounded cordon toll and a mileage charge. The bounded cordon toll consisted of an area based road pricing system similar to London's Congestion Charging System (CCS). The mileage system on the other hand charged a set amount for the mileage travelled during the winter season. In order to determine the acceptability and the willingness of residents to pay for the schemes, a survey was conducted with random samples taken from the centre and outer suburbs. Findings suggest that an area based cordon toll is the more acceptable of the two. Inner city residents were more sensitive to road pricing changes, but other factors such as car ownership and accessibility to alternative forms of transportation also play a role.

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After the announcement that Beijing would be the host city for the Olympic Games, it was decided that some watersides in Beijing would be reconstructed. In this paper, the background of this restoration is considered from the viewpoint of historical urban planning with a focus on water resources. For more than four thousand years, China has struggled with problems related to water resources. Every emperor of the Chinese dynasties, including the Tang and Yuan dynasties, made efforts to construct water networks to maintain their strong positions. The basic structure of Beijing dates back to the Yuan dynasty era at which time many watersides were built that were connected to each other. Beijing was literally a city of ‘water and greenery'. However, since the late 20^th century, as a result of high economic growth, many watersides have been either destroyed or covered by facilities.
Recently, like other countries in the world, China is attempting to achieve ‘sustainable development'. Although pollution is still a very serious problem, China is attempting to make ecologically sound water resources construction decisions. The abovementioned waterside restoration project is considered to be one of these construction programs. However, the shortage of water resources and the problem of water pollution in Beijing present a very grave situation. At the present time, a major project that will transfer water from the Yangze River to the Beijing area is under construction.
We conducted a survey of people in Beijing to evaluate three watersides in Beijing. The results of this survey revealed that most people at the waterside place a high value on the principles of restoration or improvement of watersides by the Beijing city government. This result came as a surprise to us, because in our previous study which was conducted in Japan, a majority of the people gave a low appraisal to the issue of waterside restoration.
We believe that it is vital that the Chinese government continues to maintain sustainable development. But in doing so, they should respond not only to the inhabitants of Beijing who place a high value on policies such as waterside restoration, but they should also respect the needs of the people who live in areas that are outside of Beijing.

JFL classification: H43, Q25, Q26, Q51

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This study was conducted to discover regional cultural activities (mostly generated from regional creative spiritual culture), especially those based on the spiritual culture rooted in each region, and to develop these regional cultural activities into unique regional revitalization strategies. According to Throsby, cultural assets are defined as cultural properties that have both economic and cultural value, and the accumulation of cultural properties is essential for sustained development of a regional society.
As a result, far-reaching economic effects such as an increase in the exchange population or revitalization of the regional economy were seen as unlikely. However, from medium- and long-term perspectives, the influence of cultural effects excluding economic effects on the regional society cannot be denied.
Cultural activities do not only support economic ripple effects but also creative activities in communities, where the effect to facilitate creation and emergence of new businesses has been observed. To achieve this, it is necessary for community residents to act on their opinions, and to develop an environment to support such actions.
On the other hand, effective means are not always implemented. This is because a quantifiable economic ripple effect is not rooted in the consciousness of the local hosts, and the relationship between cultural programs and economic activation is not fully understood by responsible organizations. Coordination between local hosts, departments responsible for local industries, and organizations that are closely related to local industries, such as the chamber of commerce, is not adequate. However, with an awareness that cultural aspects are essential for regional development, further activities by both responsible departments and nonprofit organizations (NPOs) are needed in order to utilize “historical cultural resources,” an important factor for public policy that is closely linked to urban regeneration and town development.

JFL classification: H54, R51, R53, Z11

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The primary theme of this report is the study and estimation of universal services of telephone carriers.
Telephone services spread throughout Japan by the telecommunication policy after World War II. Now telephone has become indispensable for present day life. In this regard, to provide equal telecommunication services, “universal services” have been promoted by a law that obliges telephone carriers to complete basic infrastructures throughout the nation. As a result, telephone services with uniform charges have spread throughout Japan. Development of telecommunication technology has drastically changed the communication tools from fixed-line phones to cellular phones. Moreover, due to a wide range of access platforms including internet services and broadband, the telephone policies both for providing new services and for attaining optimum distribution of resources need to be re-considered. In this paper, we analyze basic economic theory and practices including the basic concept of universal services. This study also shows that technological advances in telephone functions require an amendment to the present universal services and enforcement of adequate public policies.
The major findings are summarized as follows. First, landlines spread all over Japan after World War II when the government incorporated the rules of universal service systems. Now everybody can equally and uniformly access the services. Second, theoretically universal services are necessary to increase the external effects of networking and to diminish the digital divide. Third, our empirical examination showed a great difference in the maintenance costs of equipment per capita and this difference is mainly due to differences in population density. This means that without the promotion of universal services, the services can not be provided in high cost areas. In this regard, newcomers such as cellular phones can never provide their services to uncommercial regions.

JFL classification: L51, L96

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The construction of Tsukuba Station with the Tsukuba Express Line, the direct rail line between Tokyo and Tsukuba, has increased the daytime population around Tsukuba Center because many people come to Central Tsukuba by public transportation, cars and bicycles. However, the maintenance of the traffic square connecting Tsukuba Station is not adequate and the City Center is not fully utilized. This has caused a lack of attraction as a City Center. Projects are proposed and under consideration for the development of Tsukuba as an attractive city through : organically connecting the two squares with the main functions of Central Tsukuba, increasing the prosperity of the city, enlivening city activities, and increasing the incoming population of Tsukuba.
Since the traffic square has added functions not just as a bus terminal but as a station square, revisions have been proposed: expansion of the bus berth, the taxi pool and the parking area, separation of the pedestrian from the driveway, and considerasions for a barrier free system. The pedestrian walkways around the City Center adjacent to the station square are not clearly designated and the surrounding facilities are seemingly cut off vis-a-vis of the Center proper. Hence, it is difficult to attract people and the square does not contribute to its prosperity. As a remedy, construction of gentle and wide stairs from the station squar to provide steady pedestrian traffic is proposed.
In addition, the construction of a new terminal building is suggeseted as measure to attract people to this area. The new building may create festivity by combining hard and soft cotrivances with consideration of the style of the building and the tenants, and planned events from the local people.

JFL classification: R11, R14, R19

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