Competition for private capital and central grants: The case of Japanese industrial parks

Shun ichiro Bessho, Kimiko Terai

Research output: Contribution to journalArticlepeer-review

4 Citations (Scopus)

Abstract

Local governments invest in public infrastructure to develop their regions. When they depend on intergovernmental grants for local development and have opportunities to lobby upper-level governments for such grants, horizontal intergovernmental competition in lobbying activity may emerge in addition to competition over public infrastructure. This paper empirically examines the existence of these interactions between Japanese localities, by using data on the value of industrial parks as infrastructure provisions and on personnel interchanges between the central and local governments as a measure of lobbying activity. Our results suggest that a Japanese local government's choice of the size of industrial parks and its invitation to central officers to act as a director on loan are positive responses to the neighboring local government's policy choices. As the value of the industrial parks in a district is affected by the neighboring districts' lobby activities and their industrial park values, we can interpret these results as evidence of inter-regional competition in these two dimensions, rather than control by the central government in this unitary state.

Original languageEnglish
Pages (from-to)135-154
Number of pages20
JournalEconomics of Governance
Volume12
Issue number2
DOIs
Publication statusPublished - 2011 Jun

Keywords

  • Infrastructure investment
  • Lobbying
  • Policy competition
  • Spatial model

ASJC Scopus subject areas

  • Business and International Management
  • Economics, Econometrics and Finance(all)

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