Japan's troubling toll-gate mentality

Reviewed By Hitoshi URABE

Article:
"Japan's troubling toll-gate mentality"
http://straitstimes.asia1.com.sg/analysis/story/0,1870,129559,00.html?
by GREGORY CLARK / The Straits Times

Alternate Article:
"Tollgate mentality in Japan"
http://www.japantimes.co.jp/cgi-bin/geted.pl5?eo20020630gc.htm
by GREGORY CLARK / The Japan Times

Note: For the readers generally familiar with Japanese affairs the alternate article may be more suitable to refer to as The Straits Times article is an abridged version of it.

Comments:

Professor Clark knows about Japan than most Japanese do, and his objective views and common sense shared among cosmopolitan intellectuals world over reflected upon keen observations of seemingly trivial events have always resulted in valuable thought-provoking anecdotes.

This time, he raises questions on much lauded policy of Prime Minister Koizumi's privatization, with a focus on construction and management of roads and highways.

Examples listed in the article might bring to mind similar personal experiences to almost everyone living in Japan. Stories such as that a bypass built to relieve the congested streets in the city is sparsely used because it collects hefty toll, are too abundant across the country. (Seemingly an effective, though drastic, solution suggested to resolve this problem is to charge those coming into the city and free up the bypass, but so far no one has had the guts to test it.)

The article points out that road building is not necessarily an investment to make a profit out of. Nor that it is merely a project intended to boost local economy or save unemployment. It is indeed a model of public investment where a return on investment needs to be measured in broad terms of whether it serves as the basis for the public at large to conduct economic activities on effectively. As a consequence Professor Clark suggests it is important to analyze how the investments, i.e. roads, are utilized, with the proposition that the present toll system needs a fix.

Evaluations may differ depending on which school of economics you belong to of the roles and effects of public investment, but whatever the details are in wording, public investment is necessary in areas where it would benefit the society as a whole but the assessment of risk and return is difficult under ordinary business accounting practices.

This is not to say that every road building is good. New proposals to build roads must be scrutinized by well balanced eyes so as to discourage those based on selfish interests of a few people which would result in very little benefit to the public in general.

There is a lot of what government does presently which could be done significantly better if it were privatized. But most of the people, not only economists, feel that there are areas which are better, and should be, served by the government through public investment.