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Relationship Between Community Activities as a Rural Institution and Multifunctionality

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Community-based Rural Tourism and Entrepreneurship

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Abstract

This Chapter investigates community function as institutional jointness. For this purpose, this chapter evaluated the connection between multifunctional activities and institutional hamlet conditions under the Japanese direct payment program for less favoured areas.

This chapter was revised from the paper initially published as Ohe (2006). The author acknowledges the permission given by the initial publisher, the Agricultural Economics Society of Japan.

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Notes

  1. 1.

    For relation between multifunctionality and agriculture, see OECD (2003) from the policy perspective, van Huylenbroeck and Durand (2003) from the European perspective, and Ohe (2001) from the Japanese perspective.

  2. 2.

    As an example of internalization of externality caused by multifunctionality, see Ohe (2003), which explored conceptual and empirical evaluation of rural tourism. Land-preserving activity, or countryside stewardship, see van Huylenbroeck and Whitby (1999), OECD (2001).

  3. 3.

    According to Platteau and Hayami (1998), there are two types of rural communities: the village community where inhabitants live in the same place and the tribal community where inhabitants have a nomadic way of life. The rural community referred to here is the village community typically observed in East Asia.

  4. 4.

    For institutional jointness, see Hagedorn (2003). Little has been studied on institutional jointness conceptually and empirically. We understand that institutional jointness represents a relationship in which institutional factors are involved in generating multifunctionality in the process of farming unlike technical jointness, which is determined by technical aspects of farming. Institutional factors are those such as policy institutions, management institutions, and community institutions. This study focusses on rural community institutions.

  5. 5.

    Yamashita (2001), as a designer of this direct payment program, and the National Chamber of Agriculture (2000) explained the purpose and details, while Hayami and Godo (2002) is critical of this program. The five-year first stage of this program ended in 2004 and the revised five-year second stage started in 2005.

  6. 6.

    For a neo-institutional economics approach to agricultural institutions, see van Huylenbroeck et al. (2004). For a more theoretical excursion of transaction cost economics, see Williamson (2004). However, the rural community has not been studied in this literature. The author also takes a neo-institutional approach here.

  7. 7.

    For an overview of group farming in Japan see Ito (1991). Ohe (2001) clarified the role-sharing relationship between group farming in the hamlet and individual farm diversification activity.

  8. 8.

    I incorporate the idea of the public choice theory, one of the fields of neo-institutional economics, into the conceptual framework. See Buchanan and Tullock (1962), Muller (1980), and Olson (1965) for the public choice theory.

  9. 9.

    If the first derivative of the consensus-making cost or cost of utilizing human resources is zero, then shape-wise the average cost curve would be linearly right upward or right downward. In this case marginal and average costs become identical.

  10. 10.

    To utilize the appropriate human resources, there will be the cost of searching for appropriate human resources. However, this cost will be negligible because the search action will be undertaken within the range of the hamlet or in the neighbouring inter-hamlet areas.

  11. 11.

    Even if I use the variable Y instead of NY, the statistical results do not change except for the constant and reversed signs of the parameters.

  12. 12.

    The portion of acreage covered by this criterion is 19.1% of all the designated areas on average.

  13. 13.

    I used the variable of income per hectare instead of the variable of land productivity for the estimation. The goodness of fit was worse than in the latter case although I obtained similar parameters with the latter case.

  14. 14.

    Multicollinearity is serious when VIF is over ten or CN is over 15 by Chaterjee et al. (2000), while Greene (2003) says that a CN over 20 is the case. Kmenta (1997) says that when CN is over 30, multicollinearity is harmful.

  15. 15.

    The negative parameter of the quadratic size variable means that the implicit assumption of the second order condition for cost minimization is not satisfied. Strictly speaking, in this case I should only examine the result of the linear size variable case, where marginal and average costs are identical. This is a constraint of this analysis that should be taken into consideration when I interpret the estimation results although in both cases results were similar, showing a negative sign for the size parameters.

  16. 16.

    I calculated the average number of participants in the hamlet agreement for the three multifunctional activities: land preserving was 19.5 persons, landscape forming was 20.6, and recreational was 21.0. There were no statistically significant differences among the three; hence, I could not confirm the economy of scale in terms of the size of each cost factor. This is probably because I had to use not the size of each multifunctional activity, but the average sizes of the hamlet agreement at the prefectural level due to data constraints, which would make the variance of the data smaller.

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Authors and Affiliations

  1. Department of Food and Resource Economics, Chiba University, Chiba, Japan

    Prof. Yasuo Ohe

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  1. Prof. Yasuo Ohe
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Correspondence to Yasuo Ohe .

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Ohe, Y. (2020). Relationship Between Community Activities as a Rural Institution and Multifunctionality. In: Community-based Rural Tourism and Entrepreneurship. Springer, Singapore. https://doi.org/10.1007/978-981-15-0383-2_6

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  • DOI: https://doi.org/10.1007/978-981-15-0383-2_6

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  • Print ISBN: 978-981-15-0382-5

  • Online ISBN: 978-981-15-0383-2

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