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Nuclear reactors in Japan: Who asks for them, what do they do?

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Abstract

Japanese communities with nuclear reactors have them because they applied for them, and they applied for them for the money. Among Japanese municipalities, they were some of the most dysfunctional before the reactors had even arrived. These were the villages that had long fought for targeted subsidies, but ignored infrastructural investments. Subsidies operate as a regressive tax on out-migration, of course, and the lack of private-sector infrastructure reduces the returns to high-value human capital. As a result, these were the villages from which the most talented young people had probably begun to disappear—even before the reactors arrived. After the communities built the reactors, talented young people continued to leave. Unemployment rose. Divorce rates climbed. And in time, the communities had little other than reactor-revenue on which to rely.

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Notes

  1. The complex riparian water rights also make negotiations over the requisite water in rivers extremely costly. Nagai et al. (2015, 39); see Ramseyer (1989).

  2. Some American reactors are also remarkably close to urban centers.

  3. The magnitude 8.1 earthquake of 1933 was centered 200 km off shore. On the Japan coast, it registered only magnitude 5. Largely as a result of the tsunami, 1500 people died, another 1500 disappeared, and 12,000 were injured. Most of the deaths and disappearances were in Iwate prefecture.

  4. By the logic of Tullock's (1975) "transitional gains trap," the value of the subsidies to the local community would have become impacted in the price of a land. If a community receives a substantial public "bad" like a nuclear reactor, of course, there may not be a significant net gain to capitalize. Where the government pays the subsidies to specific firms, of course, the value of the subsidy will be capitalized into the price of the firm's stock.

  5. Nihon sekiyu to Hokuetsu Kashiwazaki [Japan Petroleum and Hokuetsu Kashiwazaki], Nakamura sekiyu K.K., Available at: http://www.nakamura-oil.co.jp/n_h.html (Accessed December 5, 2016); Gen'yu seisan no kirifuda [The Trump to Crude Production], available at: http://www.chem-station.com/blog/2015/07/oil.html (Accessed January 26, 2017); dai28 hyo [genyu, kaigai jishu kaihatsu gen'yu yunyu ryo to kokunai seisan ryo no suii [Tab. 28: Crude Oil: Trends in Quantity of Crude Produced Overseas and Imported, and Quantity Produced Domestically], available at http://www.noe.jx-group.co.jp/binran/data/pdf/28.pdf (Accessed January 26, 2017).

  6. Excellent discussions of the subsidy legislation appear in Samuels (1987, ch. 6) and Aldrich (2008).

  7. In 2014, municipal governments spent 5.898 trillion yen. The population was 128 million. See Somu sho (n.d.).

  8. Dengen sanpo kofukin jisseki [Subsidies Under Three Electricity Acts], Mar. 31, 2016. Available at: http://www.city.kashiwazaki.lg.jp/atom/genshiryoku/kofukin/kofukin-jisseki.html.

  9. Shimonoseki city (Yamaguchi prefecture), Kushima city (Miyazaki prefecture), Ise village and Ooki village (Mie prefecture), Suzu city (Ishikawa prefecture), Niigata city (Niigata prefecture), Shirahama village (Wakayama prefecture), and Mihama village (Kyoto prefecture)—from Japanese Wikipedia.

  10. The data can be downloaded from the standard government website http://www.e-stat.go.jp/SG1/chiiki/ToukeiDataSelectDispatchAction.do.

  11. Consistent with the results from the "synthetic control" study, Ando (2015).

  12. Note that because the census occurs only 5 years, I use interpolated values for the intervening years. This will cause the statistical significance to be exaggerated.

  13. By contrast, Ando (2015) uses a "synthetic control" approach, and concludes that nuclear plants cause per capita income to rise. He notes, however, that the plants lead (predictably) to employment in the construction sector, that manufacturing employment increased only in one of the sites; and that the employment results in the service sector are mixed. Note as well that he obtains the strongest positive economic effect at the Rokkasho complex. This is not a reactor, and therefore not in my dataset. Rokkasho is instead a fuel reprocessing facility.

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Acknowledgements

J. M. Ramseyer gratefully acknowledge the generous support of the Harvard Law School and the University of Chicago Law School, and the helpful comments and suggestions of two anonymous referees, Daniel Aldrich, Omri Ben-Shahar, John Haley, Yair Listoken, Eric Posner, Frances Rosenbluth, Daniel Smith, David Weisbach, and participants in workshops at the Italian Society of Law and Economics and the University of Chicago. Funding was provided by Harvard Law School.

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    J. Mark Ramseyer

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Ramseyer, J.M. Nuclear reactors in Japan: Who asks for them, what do they do?. Eur J Law Econ 49, 7–32 (2020). https://doi.org/10.1007/s10657-017-9561-8

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