Cooperative bank efficiency in Japan: a parametric distance function analysis

This study examines the relative performance of Japanese cooperative banks between 1998 and 2009, explicitly modeling non-performing loans as an undesirable output. Three key findings emerge. First, the sector is characterized by increasing returns to scale which supports the ongoing amalgamation process within the sector. Second, although restricted in product offerings, markets and their membership base, Japanese cooperatives secured both technical progress (a positive shift in the frontier) and a decrease in technical inefficiency (distance from the frontier). Third, the analysis highlighted that regulatory pressure to reduce non-performing loans will have an adverse impact on both output and performance. 

The End of the Urban-Rural Divide?

The urban-rural divide in China was an entrenched feature of Chinese society in the Maoist era. This divide generated and continues to generate inequality as between the rural population and the urban population. In post-Deng China, legal and administrative distinctions between urban and rural have become blurred, especially with the development of rural-urban migration. Nevertheless, the urban-rural divide still exists, and the income of farmers is below that of urban residents. In this paper, it is argued that the emergence of the phenomenon of “quasi-commons” in rural China, crossing the “borders” of the urbanrural divide, may increase farmers’ income in the future and bridge this divide. The paper focuses on different forms of “quasi-commons” (the sharing and use of communal land) emerging in rural areas, including the farmland shareholding cooperatives and transforming rural land management rights into shares in joint ventures. There are divergent views held by Chinese academics and policy makers about “quasi-commons” in rural China, as well as the direction of change in the rural land system. However, most of the proposals for reform have been polarized between nationalization and privatization of rural land. Looking beyond this “boundary thinking” and drawing on the discourses of “the commons” (for example, the writings of Hardin, Heller and Ostrom), this paper analyses the theoretical models of both the nationalization and privatization schemes and their shortcomings. The present essay also analyses the prospect for, and the barriers to the emerging commons in rural China.