Nuclear Power and the Mob: Extortion and Social Capital in Japan

Friday, October 16, 2015 12:00 PM to 1:30 PM

Room 241, Rosenkranz Hall, 115 Prospect Street

Mark Ramseyer – Mitsubishi Professor of Japanese Legal Studies, Harvard Law School

Nuclear reactors entail massive non-transferable site-specific investments.  The resulting appropriable quasi-rents offer the mob the ideal target. In exchange for large fees, it can either promise to “protect” the utility (and silence the reactor’s local opponents) or “extort” from it (and desist from inciting local opponents).  Using municipality level (1742 cities, towns, and villages) and prefecture-level (47) Japanese panel data covering the years from 1980 to 2010, I find exactly this phenomenon: when a utility announces plans to build a reactor, the level of extortion climbs.  Reactors have broad-ranging effects on social capital as well.  In general, the perceived health costs to nuclear power are highest for young families. As a result, if a utility announces plans for a new reactor, these families disappear. Yet these are the men and women who invest most heavily in the social capital that keeps communities intact. When they disappear, reliance on government subsidies increases, and divorce rates rise.  Firms stay away, and unemployment climbs.

Sponsored by Japan Foundation’s Center for Global Partnership