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2015 | OriginalPaper | Chapter

1. Fiscal Consolidation in the Political Economy of Japan

Author : Toshihiro Ihori

Published in: The Political Economy of Fiscal Consolidation in Japan

Publisher: Springer Japan

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Abstract

The present chapter highlights several important factors of fiscal consolidation in Japan by investigating incentives for governments and private agents to either implement or postpone consolidation and structural fiscal reforms in a political economy. This chapter shows that the counter-cyclical fiscal measures, which result in the accumulation of public debt, are not always desirable from a long-run perspective. The long-run commitment to fiscal consolidation may enhance fiscal structural reforms even if these reforms might produce short-run costs and, hence, cause severe resistance from interest groups.

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−0.833 before 1989 and 0.914 after 1990. The data sources are as follows. Income: Statistics on Trend of Management. Central government: General Accounts—Settlement of Expenditure by Purpose. Local government: Ordinary Accounts of Local Governments—Settlement of Expenditure by Purpose and Function. Deflator: Annual Report on National Accounts of 2000 and 2011 (we adjust the latter using the ratio of the former to the latter in 1980 and connect this with the former).

0.935 in Hokuriku and −0.200 in Shikoku. The income data source is Statistical Survey on Farm Management and Economy. The source of the governmental data and the price deflator are the same as in footnote 1.

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Title: Fiscal Consolidation in the Political Economy of Japan
Author: Toshihiro Ihori
Publisher: Springer Japan
Book: The Political Economy of Fiscal Consolidation in Japan
Print ISBN: 978-4-431-55126-3

Electronic ISBN: 978-4-431-55127-0

Copyright Year: 2015
DOI: https://doi.org/10.1007/978-4-431-55127-0_1