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Government Transparency And Expenditure In The Rent-Seeking Industry: The Case Of Japan For 1998–2004


Since the end of the 1990s, local governments in Japan have enacted Information Disclosure Ordinances, which require the disclosure of official government information. This paper uses Japanese prefecture-level data for the period 1998–2004 to examine how this enactment affected the rate of government construction expenditure. The Dynamic Panel model is used to control for unobserved prefecture-specific effects and endogenous bias. The major finding is that disclosure of government information reduces the rate of government construction expenditure. This implies that information disclosure reduces losses from rent-seeking activity, which is consistent with public choice theory.

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Article provided by Western Economic Association International in its journal Contemporary Economic Policy.

Volume (Year): 31 (2013)
Issue (Month): 3 (07)
Pages: 635-647

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Handle: RePEc:bla:coecpo:v:31:y:2013:i:3:p:635-647
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  1. Dennis Coates & Jac Heckelman & Bonnie Wilson, 2011. "Special-interest groups and growth," Public Choice, Springer, vol. 147(3), pages 439-457, June.
  2. Haruo KONDOH, 2008. "Political Economy of Public Capital Formation in Japan," Macroeconomics Working Papers 22604, East Asian Bureau of Economic Research.
  3. Hiroshi Ohashi, 2008. "Effects of Transparency in Procurement Practices on Government Expenditure: A Case Study of Municipal Public Works," CIRJE F-Series CIRJE-F-548, CIRJE, Faculty of Economics, University of Tokyo.
  4. David Roodman, 2007. "A Note on the Theme of Too Many Instruments," Working Papers 125, Center for Global Development.
  5. Alt, James E. & Lassen, David Dreyer, 2006. "Fiscal transparency, political parties, and debt in OECD countries," European Economic Review, Elsevier, vol. 50(6), pages 1403-1439, August.
  6. Heckelman, Jac C, 2000. " Consistent Estimates of the Impact of Special Interest Groups on Economic Growth," Public Choice, Springer, vol. 104(3-4), pages 319-27, September.
  7. Mushfiq Swaleheen, 2011. "Economic growth with endogenous corruption: an empirical study," Public Choice, Springer, vol. 146(1), pages 23-41, January.
  8. James E. Alt & David Dreyer Lassen & Shanna Rose, 2006. "The Causes of Fiscal Transparency: Evidence from the American States," EPRU Working Paper Series 06-02, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  9. Haruo KONDOH, 2008. "Political Economy of Public Capital Formation in Japan," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 4(1), pages 77-110, December.
  10. Arellano, Manuel, 2003. "Panel Data Econometrics," OUP Catalogue, Oxford University Press, number 9780199245291.
  11. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65, pages 135.
  12. James E. Alt & David Dreyer Lassen & David Skilling, 2001. "Fiscal Transparency, Gubernatorial Popularity, and the Scale of Government: Evidence from the States," EPRU Working Paper Series 01-16, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  13. Doi, Takero & Ihori, Toshihiro, 2002. "Fiscal Reconstruction and Local Interest Groups in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 16(4), pages 492-511, December.
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