Case Study – Japanese Business Practice

SCS123

GPI
In Japan transport infrastructure has been developed primarily via user payments. Even for services that operate under the budgetary system, the user pay principle is still valid to a certain degree. However, in recent years this principle has been debated in terms of limitations, in particular, how well it reflects the characteristics of externality. If external effects are taken into consideration, this means that then costs of transport infrastructure should be shared by all beneficiaries in a wider sense. In this respect, it is also necessary to increase the public financing when it is justifiable. 

Historically the changes in the size of public investments in infrastructure have been varying in response to the changes in economic planning. There had been changes in the contents of public expenses too. The economic plans before the 1960s show that resources were distributed to maximise the economic growth via concentration of infrastructure investment[1]The economic plans from late 1960s were aiming to improve the regional disparity and deteriorating living standards.

The objective of this case is to give a perspective of the Japanese practice to finance maritime infrastructure as the focus is on the private investments. The existing business practices will be explored as the public funding will be also discussed when it is entangled with the private financial sources. The case study looks at Japan’ s big steelmakers and their investments in transportation. It aims to provide policy-makers, policy and financial analysts, consultancies and professional organisations with structured information about the topic.