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Effect Of Public Investment On The Regional Economies In Postwar Japan

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  • Mitsuhiko Kataoka

Abstract

This paper examines the effect of public investment on the regional economies of postwar Japan. It evaluates the effects of efficiency†verses†equity†oriented allocation policies by estimating the aggregate regional production function and calculating the marginal productivity of public capital for each region, using panel data covering the 47 prefectures over the period from 1955 to 2000. The empirical results show that public capital investment has alternated between an allocation policy based on efficiency and one that is based on equity, and, in fact, such investment was used as a policy tool for adjusting income distribution and accelerating economic growth. Numerical simulations are used to analyze the trade†offs between economic efficiency and inter†prefectural equity. The results indicate that in the case of income†elastic labor mobility, an efficiency†oriented allocation policy leads to larger aggregate gross domestic product by promoting both growth and equity simultaneously.

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  • Mitsuhiko Kataoka, 2005. "Effect Of Public Investment On The Regional Economies In Postwar Japan," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 17(2), pages 115-139, July.
    • Handle: RePEc:bla:revurb:v:17:y:2005:i:2:p:115-139
    DOI: 10.1111/j.1467-940X.2005.00100.x
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    Cited by:

    1. Pedro R. D. Bom & Jenny Ligthart, 2008. "How Productive is Public Capital? A Meta-Analysis," CESifo Working Paper Series 2206, CESifo.
    2. Fernando Coelho Martins Ferreira & Cristiane Biazzin & Paul C. Hong, 2024. "Transition Paths of Brazil from an Agricultural Economy to a Regional Powerhouse: A Global Supply Chain Perspective," Sustainability, MDPI, vol. 16(7), pages 1-24, March.
    3. Emanuela Marrocu & Raffaele Paci, 2010. "The effects of public capital on the productivity of the Italian regions," Applied Economics, Taylor & Francis Journals, vol. 42(8), pages 989-1002.
    4. Valter Di Giacinto & Giacinto Micucci & Pasqualino Montanaro, 2012. "The Macroeconomic Impact of Infrastructures: A Literature Review and Empirical Analysis on the Case of Italy," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 1, March.
    5. Pedro R.D. Bom & Jenny E. Ligthart, 2009. "How Productive is Public Capital? A Meta-Regression Analysis," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0912, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    6. Pedro R.D. Bom & Jenny E. Ligthart, 2014. "What Have We Learned From Three Decades Of Research On The Productivity Of Public Capital?," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 889-916, December.
    7. Mitsuhiko Kataoka, 2014. "Trends in the regional allocation of public investment in the post-bubble Japanese economy," Letters in Spatial and Resource Sciences, Springer, vol. 7(3), pages 205-212, October.
    8. Andrey V. Belov, 2018. "Tax Revenues, public investments and economic growth rates: evidence from Russia," Journal of Tax Reform, Graduate School of Economics and Management, Ural Federal University, vol. 4(1), pages 45-56.

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