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

Harvard Law School John M. Olin Center Discussion Paper No. 817

37 Pages Posted: 3 Apr 2015

Multiple version iconThere are 2 versions of this paper

Date Written: March 2015

Abstract

Nuclear reactors entail massive non-transferrable 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, 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.

Keywords: Organized crime, nuclear power, extortion, protection

JEL Classification: K14, L14, L94, Q4

Suggested Citation

Ramseyer, J. Mark, Nuclear Power and the Mob: Extortion and Social Capital in Japan (March 2015). Harvard Law School John M. Olin Center Discussion Paper No. 817, Available at SSRN: https://ssrn.com/abstract=2587276 or http://dx.doi.org/10.2139/ssrn.2587276

J. Mark Ramseyer (Contact Author)

Harvard Law School ( email )

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