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Japan's fiscal conservatism

Japan has long been known for a grotesque excess of pork-barrel spending. Example: its $4.5 billion splurge on new stadiums for 2002's soccer World Cup, which David Plotz described on Slate:

Japan, which builds superhighways for teeny villages, billion-yen bridges to empty islands, and flood-control dams for streams that couldn't soak your basement, today introduces its latest public works boondoggle: 10 World Cup stadiums — shapely, modern, spectacular white elephants.

...The stadium I visited this spring in Sapporo is a ludicrous marvel. It is a domed stadium with artificial turf, but a grass soccer field sits just outside the east wall. On soccer game days, the wall slides open, a bank of seats retracts, and the turf field — floating on an air cushion — is rolled indoors. Then the wall closes, the turf field is rotated 90 degrees, and — voilĂ  — an indoor, grass soccer stadium. This insanity cost $400 million, plus $15,000 every time they move the field.
Such excesses have typically been justified as necessary to "jump-start" the languishing economy. But one Japanese city — Nagoya — has found that smaller government works. In the Washington Post, Anthony Faiola reports:
In the past eight years, the city has trimmed 13 percent of its workforce, or 3,648 jobs, deemed part of a bloated government bureaucracy.

In the country that turned pork-barrel politics into an art form, the new international airport in Nagoya has been hailed in national newspaper editorials as a rare example of good civic management. Inaugurated in February, the project came in about $1.2 billion under budget and changed the very concept of what an airport can be.
The result has been a localized economic boom in the midst of nationwide malaise:
In a nation still struggling to find its footing after a 13-year economic slump, Nagoya is riding high as Japan's city of the moment. With an economic growth rate of 2.8 percent, greater Nagoya — home to 7.2 million people and some of Japan's most successful companies, most notably Toyota Motor Corp. — is sizzling along at more than double the national average. The region boasts an unemployment rate of 3.5 percent, markedly lower than the national rate of 4.7 percent, according to government statistics.
So, they cut redundant jobs and unnecessary spending, and got higher economic growth and lower unemployment? Hmm. I just know there's a lesson in here somewhere...

Japundit observes that the national government isn't learning from Nagoya's example.

And, in an earlier version of this post, I mistakenly identified Yasuo Tanaka as the mayor of Nagoya. Tanaka-san is indeed famous for cutting government spending, but in fact he is governor of Nagano prefecture. The reference has been removed.

I've always had a problem with Japan's "N-G" place names — once I bought an expensive Shinkansen ticket from Tokyo to Nagoya, instead of Niigata.


Anonymous said...

Big-government projects may not work to revitalize the economy, but they do work for the very important task of making politicians look like they're doing something to help people!

I wish more cities would follow Nagoya's example. A prosperous Japan is in the world's best interest. 

Posted by Greg



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