[pp.11-20]

Interdependency of the Economy, Environment and Government Capacity: Examining the Structure of Japan's Environmental Pr

Naoko KAIDA and Shunji MATSUOKA （Stockholm Environment Institute, Sweden / Hiroshima University）

Abstract:
A lengthy debate on the causalities or systems of the economy and environment in the literature proposes the following research challenges: what are the real explanatory factors apart from the two classical elements of economic and environmental levels, and how these are structured as social systems. This study proposed and examined the interdependent structure of social systems that comprise three elements—economy, environment and government capacity—in the issues of industrial air pollution (SO2) and municipal waste using Japan's prefectural data of the past 20 years (a total of 47 prefectures). The result showed that the interdependent structure was commonly supported in these distinctly different types of environmental issues. It was also found that government capacity can be a driving force of environmental improvement and be accelerated by environmental changes, even though the observed effect is limited compared with that of economic levels and the causal directions are not strictly determined.

Key Word:
government, air pollution, municipal waste, Granger causality test, time series analysis

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