A Comparative Institutional Analysis of the Fukushima Nuclear Disaster: Lessons and Policy Implications

26 Pages Posted: 8 Oct 2011 Last revised: 27 Jun 2012

Date Written: June 26, 2012

Abstract

This paper analyzes the causes, responses, and consequences of the Fukushima nuclear power plant accident (March 2011) by comparing these with Three Mile Island (March 1979) and Chernobyl (April 1986). We identify three generic modes of organizational coordination: modular, vertical, and horizontal. By relying on comparative institutional analysis, we compare the modes’ performance characteristics in terms of short-term and long-term coordination, preparedness for shocks, and responsiveness to shocks. We derive general lessons, including the identification of three shortcomings of integrated Japanese electric utilities: (1) decision instability that can lead to system failure after a large shock, (2) poor incentives to innovate, and (3) the lack of defense-in-depth strategies for accidents. Our suggested policy response is to introduce an independent Nuclear Safety Commission, and an Independent System Operator to coordinate buyers and sellers on publicly owned transmission grids. Without an independent safety regulator, or a very well established “safety culture,” profit-maximizing behavior by an entrenched electricity monopoly will not necessarily lead to a social optimum with regard to nuclear power plant safety. All countries considering continued operation or expansion of their nuclear power industries must strive to establish independent, competent, and respected safety regulators, or prepare for nuclear power plant accidents.

Keywords: horizontal coordination, modularity, nuclear power, integrated regional monopoly, electricity regulation, safety regulation, public ownership

JEL Classification: D02, D23, D81, G34, G38, H54, K23, L22, L43, L94, L97

Suggested Citation

Aoki, Masahiko and Rothwell, Geoffrey, A Comparative Institutional Analysis of the Fukushima Nuclear Disaster: Lessons and Policy Implications (June 26, 2012). Available at SSRN: https://ssrn.com/abstract=1940207 or http://dx.doi.org/10.2139/ssrn.1940207

Masahiko Aoki (Contact Author)

Stanford University ( email )

E314 Encina Hall
Stanford, CA 94305-6015
United States
415-723-3975 (Phone)
415-725-5702 (Fax)

HOME PAGE: http://www.stanford.edu/~aoki

Geoffrey Rothwell

OECD ( email )

Nuclear Energy Agency
Antibes, Alps-Maritimes 06600
France
33-(0)6-81211816 (Phone)

HOME PAGE: http://www-econ.stanford.edu/faculty/Rothwell_CV.pdf

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