Research Center for the Economics of Market Quality

Center Director: Eiji Hosoda (Professor, Faculty of Economics)

Campus: Mita

The main objectives of this research center are to establish the "Market Quality Theory," which advocates that high-quality markets are indispensable for the sound development and growth of the modern economy, and to elucidate the dynamics of improving market quality. To this end, we define the totality of the various elements surrounding a market as "market infrastructure" and analyze the dynamic relationship between market quality and market infrastructure. In reality, we view various markets of differing quality as changing endogenously with changes in market infrastructure. This research center aims to elucidate the process of improving market quality from a comprehensive perspective of theory, data, and empirical evidence, and to design policies that create a path for the economy to gradually achieve higher market quality through the comprehensive coordination of market infrastructure. For this, high-quality data that appropriately captures the endogenous changes in the market are essential. Furthermore, to verify the Market Quality Theory from an empirical standpoint, we will newly construct corporate panel data, link it with the household panel data that has been developed since the 21st Century COE Program, and elucidate the process of quality improvement from both the supply and demand sides in line with the actual conditions of individual markets. We will reinforce the findings from the newly created panel data with a wide range of research including public finance, monetary policy, labor economics, law and economics, corporate systems, international economics, and history. We will also demonstrate the effectiveness of a new policy philosophy of improving market quality through the ex-ante and indirect method of "coordination of market infrastructure." Furthermore, we will actively design and propose policies that are grounded in reality to establish this policy philosophy in society.

At the same time, we also aim to continue and develop the research of this center for the future and to train a large number of young researchers who will lead the improvement of market quality. We will expand the international network of the 21st Century COE Program and establish a comprehensive international education and research hub for theory, empirical analysis, data construction, and policy design/proposals from the perspective of market quality. Through the activities described above, this research center also aims to establish the philosophy of improving market quality in society.

Market quality, competition, law and institutions, economic policy, market quality

■Continuing Activities from the Previous Fiscal Year: Background, Rationale, and Goals

Continuing from the previous fiscal year, the divisions of theoretical development, panel data design and analysis, applied and empirical analysis, and policy design and proposals will work in close collaboration to conduct educational and research activities, and return the research outcomes to society in the form of policy proposals. We also plan to make maximum use of the strong international academic network we have built over the years to train and produce young researchers and Ph.D.s engaged in market quality research in an international environment at our center. Through the outreach activities of this research center, the concept of "Market Quality" Theory is gradually gaining traction, and we will continue our research activities to further promote its understanding among the general public.

■New Activity Goals and Content for FY2012, and Background for Implementation

Continuing and complementing the center's past research activities, we will strengthen our collaboration with the Institute of Economic Research at Kyoto University. The divisions of theoretical development, panel data design and analysis, applied and empirical analysis, and policy design and proposals will work in close collaboration on real-world economic issues, conduct educational and research activities, and return the research outcomes to society in the form of policy proposals. In particular, to comprehensively analyze the current state of markets, we will engage in discussions with experts from Japan and abroad and conduct new activities with the goal of promoting the concept of market quality and deepening research in this area.

Furthermore, aiming for the sustainable development of the research center after the conclusion of the Global COE Program, we will build a new theoretical research core and network and train researchers, with this research center at the core.

■Implementation Details for the Fiscal Year Business Plan, Research Outcomes, and Degree of Achievement

The research outcomes for fiscal year 2011 were presented at academic conferences and other venues, and were published in the form of research papers and books. We also conducted educational and research activities to raise public awareness of the "Market Quality" Theory, advanced the research of our center, and trained many young researchers to lead the improvement of market quality. The achievements of this research center are as follows.

The waste disposal project in Ibaraki Prefecture using a revenue trust, which was the first application in Japan of a policy proposed by Project Leader Naoyuki Yoshino, won the "Deal of the Year" award in Asia and has been acclaimed internationally for improving the market quality of public policy. Furthermore, the center's research on improving the quality of public works has been highly evaluated by the OECD, ASEAN, the United Nations (UNESCAP), and the IMF.

Staff