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Government transparency and expenditure in the rent-seeking industry: The case of Japan for 1998–2004

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  • Eiji Yamamura
  • Haruo Kondoh

Abstract

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.

Suggested Citation

  • Eiji Yamamura & Haruo Kondoh, 2012. "Government transparency and expenditure in the rent-seeking industry: The case of Japan for 1998–2004," EERI Research Paper Series EERI_RP_2012_13, Economics and Econometrics Research Institute (EERI), Brussels.
  • Handle: RePEc:eei:rpaper:eeri_rp_2012_13
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    References listed on IDEAS

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    1. 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.
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    5. Hiroshi Ohashi, 2009. "Effects of Transparency in Procurement Practices on Government Expenditure: A Case Study of Municipal Public Works," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 34(3), pages 267-285, May.
    6. 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.
    7. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65, pages 135-135.
    8. 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.
    9. 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.
    10. Haruo KONDOH, 2008. "Political Economy of Public Capital Formation in Japan," Macroeconomics Working Papers 22604, East Asian Bureau of Economic Research.
    11. 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.
    12. Mushfiq Swaleheen, 2011. "Economic growth with endogenous corruption: an empirical study," Public Choice, Springer, vol. 146(1), pages 23-41, January.
    13. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
    14. Arellano, Manuel, 2003. "Panel Data Econometrics," OUP Catalogue, Oxford University Press, number 9780199245291.
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    Citations

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    Cited by:

    1. Yamamura, Eiji & Sabatini, Fabio, 2014. "Superstars in politics: the role of the media in the koizumi regime," MPRA Paper 56178, University Library of Munich, Germany.
    2. Eiji Yamamura & Yoshiro Tsutsui & Fumio Ohtake, 2015. "Relative income position and happiness: are cabinet supporters different from others in Japan?," ISER Discussion Paper 0921, Institute of Social and Economic Research, Osaka University.
    3. Eiji Yamamura, 2016. "Governors’ term of office and information disclosure: Evidence from Japan," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 59(1), pages 48-78.
    4. repec:kap:pubcho:v:172:y:2017:i:3:d:10.1007_s11127-017-0444-x is not listed on IDEAS
    5. Eiji Yamamura & Fabio Sabatini, 2014. "Superstars in politics: the role of the media in the rise and success of Junichiro Koizumi," Papers 1407.1726, arXiv.org.
    6. Yamamura, Eiji, 2014. "Time preference and perceptions about government spending and tax: Smokers’ dependence on government support," MPRA Paper 55659, University Library of Munich, Germany.
    7. Yamamura, Eiji & Ishida, Ryo, 2017. "Analysis of the implementation of information disclosure ordinances in Japan: the effect on the income of mayors and chief executives in local governments," MPRA Paper 83337, University Library of Munich, Germany.
    8. Yamamura, Eiji, 2013. "Governor’s term and information disclosure: Evidence from Japan," MPRA Paper 45848, University Library of Munich, Germany.
    9. Yamamura, Eiji & Sabatini, Fabio, 2015. "The impact of the media on voters’ attitude toward Junichiro Koizumi and his policy," Japan and the World Economy, Elsevier, vol. 34, pages 24-32.

    More about this item

    Keywords

    Information disclosure; Special interest group; Construction expenditure; Rent seeking.;

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H79 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other

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