Japan's Political Leadership Deficit

Analysts have long pondered the question: 'Who rules in Japan?'. Prime Ministers who have exercised strong leadership have been the exception rather than the rule. Despite the widespread acknowledgment that Japan's political leadership deficit undermines the ability of the government to act swiftly in a crisis and to exercise international leadership in trade and foreign policy, a systematic explanation for Japan's weak political executive is yet to be advanced. While historical and cultural factors cannot be ignored, more relevant in a contemporary context are institutional factors that restrict the power of the Prime Minister and the Cabinet. A parliamentary Cabinet system is not incompatible with strong leadership but, in Japan's case, the inability of the political executive to exercise indisputable authority, or indeed, merely to exercise the legitimate prerogatives of Prime Ministerial and Cabinet Office, is directly attributable to the constraints imposed by a collection of informal power structures within the ruling conservative party and by an autonomous central bureaucracy, all of which have held power away from the political executive. Various institutional remedies are currently being pursued to enhance the leadership of the executive branch. They are part of a deliberately engineered shift in power from non-elected bureaucrats to elected politicians. The reforms will also help to diminish the influence of ruling party factions over personnel selections to executive office and the ascendancy of internal policy cliques within party policymaking.     

LOCATION AND ENTREPRENEURSHIP: INSIGHTS FROM A SPATIALLY‐EXPLICIT OCCUPATIONAL CHOICE MODEL WITH AN APPLICATION TO CHILE

Occupational choice and heterogeneous managerial ability enter a spatial Dixit‐Stiglitz setting, linking location, wages and regional entrepreneurship rates. Market potential has a positive partial effect and wages a negative partial effect on the regional supply of entrepreneurs, both balancing in equilibrium with endogenous wages. Market potential increases profits, but also the opportunity cost of entrepreneurship. In the long‐run equilibrium with perfect mobility, the cut‐off level of ability determining selection into entrepreneurship will be the same across regions; moreover, regional differences in entrepreneurship rates depend only in differences in average fixed costs of firms. An empirical application is provided for Chile.     

Complementarities Between Universities and Technology Institutes: New Empirical Lessons and Perspectives

This paper investigates the different roles played by universities and technology institutes (TIs) as innovation partners of firms. Comparing the characteristics of Spanish firms collaborating with these agents allows us to better define complementarities among the target groups of these organizations. Our findings show that those firms collaborating with universities are bigger, have higher internal capabilities and are less dependent on their external relationships while firms collaborating with TIs are smaller, have weaker internal capabilities but are more open to their environment and thus more reliant on external sources. We point to the implications of these findings for regional development. Universities have a role as partners of more technologically advanced firms. TIs, on the other hand, partner those firms, which though also quite advanced, require more external help in their innovation processes. These results should help policy-makers in the definition of more complex regional strategies and the provision of tools aimed at different goals. Managers of universities, TIs and client firms should find these results of help in developing more positive collaborations with one another.     

Japan's FTA politics and the problem of agricultural trade liberalisation

Japan's willingness to negotiate Free Trade Agreements (FTAs) is not matched by a readiness to liberalise agricultural trade. Japan has used a variety of mechanisms to limit the extent of agricultural concessions in FTAs. Public choice theory predicts that FTAs are a more effective instrument for opening Japan's agricultural market than the WTO because they reshape the domestic politics of Japanese trade in ways that are conducive to further market opening. FTAs do this by altering the domestic politics of trade policymaking on the demand side as well as some aspects of the supply side. On the demand side, business groups mobilise even more strongly to demand an end to agricultural protection, whilst on the supply side, the value of FTAs for broader state interests are recognised by politician-leaders. Various structural obstacles in the policymaking process, however, prevent the altered demand and supply-side dynamics from necessarily delivering free trade outcomes.     

Stronger together? Assessing the causal effect of inter‐municipal cooperation on the efficiency of small Italian municipalities

When local governments are small and fragmented, promoting inter‐municipal cooperation (IMC) among them is seen as a tool to improve the management of public services by reaping economies of scale and scope. Yet, the empirical evidence on the impacts of IMC on local governments' efficiency is scarce and inconclusive. In this paper, we investigate the experience of Italy's municipal unions (Unioni di comuni). We develop an index of technical efficiency by means of robust data envelopment analysis. We then exploit nearest‐neighbor matching and fuzzy regression discontinuity design estimators to explore whether municipal unions have any impacts on the administrative efficiency of member municipalities. We fail to find any strong, significant effect.