In its broadest sense, development requires not simply sustained, robust levels of overall economic growth, but diminishing (and ultimately eliminating) absolute poverty and profound economic inequalities. Effective public action and good governance are essential to bringing about the conditions that create wealth, allow markets to function, and eliminate poverty.

Over 1 billion people in the world today are extremely poor, living on less than 1 dollar a day. Poverty relief requires the active involvement of governments in the provision of public goods such as drinking water, health clinics and services, sanitation, sewage, education, roads, electricity, and emergency relief, among others. In the developing world, failure on the part of government to deliver these public services often constitutes a major impediment to the alleviation of poverty.

The Program on Poverty and Governance Program at Stanford's Center on Democracy, Development, and the Rule of Law is working to understand the linkages between the quality of governance and developing societies' capacities to meet basic human needs and reduce poverty. Conceived in a broadly comparative international perspective, the Program is engaged in cross-national and field-based research projects, with a particular focus on Latin America and Mexico.

Phillip Lipscy, an assistant professor of political science and a center fellow at the Freeman Spogli Institute of International Studies, is currently conducting research on energy efficiency and financial crisis response. Here he discusses his recent research within the context of contemporary Japan, and comments on current social and political conditions in Japan after the March 2011 disaster.

What is the primary focus of your research right now?

One focus is on the politics of energy efficiency. I am exploring the question: Why do some countries, like Japan, pursue very aggressive efficiency measures, while others, like the United States, choose not to?  

I am also researching the politics of financial crisis response. My key research questions include: What political factors determine the speed and effectiveness of crisis response? When do countries act decisively? What policies are chosen and under what conditions?

In your recent research about energy-efficient policymaking, what are some of the cases and issues in Asia that you have explored?

Japan is a very important case. Its economy is one of the most energy efficient in the world based on measures such as energy intensity. There are a lot of questions, however, about whether any of that is due to policy measures.

I have been examining Japan’s transportation sector with Lee Schipper, a senior research engineer at Stanford’s Precourt Energy Efficiency Center, and our findings are counterintuitive. Most of Japan's relative advantage in transportation sector efficiency is not due to automobile fuel economy, which is what the Japanese government tends to play up. Instead, Japan is characterized by an abnormally high rail share and less total distance traveled. [A great loss to the Stanford community, Dr. Schipper recently passed away. More information is available here.]

What I show in my research is that Japan's efficiency achievements are closely tied to traditional pork barrel politics. High costs have been imposed on the general public—for example, through automobile taxes and highway tolls. The revenue from these measures was traditionally redistributed to key constituencies of the Liberal Democratic Party (LDP), namely rural residents and the construction industry.

This arrangement worked nicely for several decades, reducing energy consumption while also helping to keep the LDP in power. These arrangements, however, have become unsustainable with political changes since the 1990s, particularly the coming to power of the Democratic Party of Japan. These political changes have put Japan's energy efficiency policy in a state of flux. The current electoral system makes it more difficult to impose diffuse costs on the public—such as through gasoline or CO2 taxes—but there is no obvious alternative mechanism.


A young boy helps with clean-up efforts after the March 11 earthquake and tsunami. (Flickr/DJ Milky)

As far as you can speculate at this point, what impact do you think that the Fukushima nuclear disaster will have on Japan’s future energy policy?

Before the Fukushima disaster, Japan had planned to increase electricity generated by nuclear power to 50 percent by 2030. These plans are almost certainly going to be shelved. Prime Minister Naoto Kan recently announced plans to gradually move away from nuclear power in the coming years.

This discussion is not unique to Japan. Germany, Italy, and Switzerland have all recently announced anti-nuclear policies in response to Fukushima. On a recent trip to Taiwan, I found a similar discussion underway there. Taiwan, however, is very similar to Japan in terms of its high dependence on energy imports. This dependence creates a dilemma.

Japan's economy is already one of the most energy efficient in the world, making it more difficult to realize incremental energy savings through efficiency gains. Oil and natural gas are volatile and subject to geopolitical shocks. Renewables are not yet able to meet the kind of energy demand you have in a large economy like Japan. For the foreseeable future, less nuclear energy means higher costs and greater dependence on fossil fuels. That is going to have negative implications for energy security and climate change.

You recently returned from a trip to Japan. What is your perception of the way that everyday people are dealing with the triple disaster that took place in March? What is your assessment of the political situation?

The most remarkable thing is how quickly the Japanese people came together to support disaster victims and conserve energy. There was an outpouring of help, especially volunteer activities and financial contributions. People are taking energy conservation seriously, keeping air conditioning off even during the unbearably humid summer.

The situation at Fukushima was a big blow to the national psyche though. There have been some media reports overplaying the dangers of radiation, and people are deeply concerned about food safety.

Unfortunately, the political situation has been truly tragic. Even for a political scientist like myself, the inability of Japanese leaders to come together after the disaster is troubling. It took less than a month after the earthquake for bickering and squabbling to return full force. On a more positive note, local government leaders and some private sector actors have filled the void to some degree.

It was striking to find how much the Japanese private sector was stepping in to take over functions that we generally associate with government—things like disaster relief, provision of supplies, and screening food for radiation contamination.


A view of the floor of the Tokyo Stock Exchange. (Flickr/Stefan)

What publications are you currently working on?

I just finished a manuscript, co-authored with my former student Philippe de Koning, on how Japan's defense establishment has dealt with fiscal austerity over the past decade. Now that the United States and Europe are dealing with similar pressures to cut back defense spending, we wanted to see how Japan had managed. We found that Japan's defense planners have fared relatively well within the domestic budgetary process, but they are in an extremely tough situation. Without a major change in  policy, when the short-term coping measures being implemented today run  their course over the next decade, Japan will face a sharp reduction in its military capabilities.

In addition, I collaborated during the past academic year with Hirofumi Takinami, a Shorenstein APARC Visiting Fellow from Japan’s Ministry of Finance, to examine lessons from Japan’s financial crisis in the 1990s. We looked at the extent to which the United States took these lessons into account when it encountered its own economic downturn in 2008. We found that Japan's crisis influenced the U.S. response quite a bit, but there was some variation by policy area based on the degree of politicization. For example, in monetary policy, which is technocratic and politically insulated, the lessons from Japan were implemented quickly. It was slower for financial sector bailouts though, and especially so for fiscal policy.

In this coming academic year what are the courses that you will be teaching?

I will be teaching a graduate seminar on political economy, primarily intended for PhD students in political science, as well as an undergraduate course on the politics of financial crisis.

Frank Wolak was a panelist at a one-day symposium in Tokyo put on by the Center for International Public Policy Studies entitled “Can Japan have a new economic paradigm after the catastrophic quake and tsunami on 11th March?”.

Wolak described how active demand-side participation by consumers through the use of dynamic pricing could help manage Japan’s current energy shortfall and benefit Japanese industry by stimulating the demand for the advanced metering and other electronic equipment necessary to implement dynamic pricing. Wolak summarized the results of several PESD research projects demonstrating significant price-responsiveness at both the residential and industrial level to retail prices that vary with real-time system conditions.

The major topic at the symposium was how Japan would meet its current and future electricity supply needs and what role nuclear power should play. There was general agreement among the panelists that nuclear power should remain part of Japan’s energy mix for both economic and energy security reasons, along with more stringent nuclear safety regulations. Other participants included Junichiro Koizumi (former Prime Minister of Japan) and Chief Executive Officers from a number of major Japanese corporations including Toshiba, Nippon Steel, Toyota, Panasonic, and Canon.

“Anticipating the future is difficult in any situation, but assessing the prospects for nuclear power in the next fifty years presents especially complex challenges," write Katherine D. Marvel and Michael M. May in a new paper published by the American Academy of Arts & Sciences.

"The public perception of nuclear power has changed and continues to change. Once viewed as a miracle of modern technology, nuclear power came to be perceived by many as a potential catastrophe; now it is viewed as a potential, albeit potentially still dangerous, source of green power. Conventional wisdom in the 1960s held that nuclear power could dominate the electricity sectors of developed countries, while less than twenty years later, many predicted the complete demise of the U.S. nuclear industry following the Three Mile Island accident in 1979. Yet neither attitude fully forecast the situation today: a nuclear industry that is not dominant, but is far from dead. Indeed, the history of long-range planning for nuclear power serves as a caution for anyone wishing to make predictions about the state of the industry over the next half-century.

Nonetheless, it is critical to assess its role in the future energy mix: decisions taken now will impact the energy sector for many years. This assessment requires both a review of past planning strategies and a new approach that considers alternate scenarios hat may differ radically from business as usual. While a number of studies have explored the future of nuclear power under various circumstances, the purpose of this paper is to consider gamechanging events for nuclear energy.”

PESD Director Frank Wolak will be participating in the Uptime Institute Symposium 2011 from May 9-12, 2011. Wolak will be among a few panelists on "The Future of Energy" session to discuss key issues in electricity markets and electricity delivery that data center operators may need to understand and prepare for over the next 2-5 years.