regions. To resolve this issue, we have to conduct the above model selection procedure in each
island region. However, we have to interpret the results of this procedure with caution because of
the lack of sufficient annual data.
If the estimated results are different in each island region, then the appropriate measures for
each island region should be implemented. In particular, the economic development issues in the
remote islands should be addressed according to the islands’ individual economic and social
conditions rather than the entire island region being administered by the Law for Development of
Remote Islands.
Acknowledgments: Financial support from the Japan Society for the Promotion of Science
(Grant-in-Aid for Scientific Research A(2) 16203020) is gratefully acknowledged. We are also
grateful to Toru Nagahashi for his helpful comments.
NOTES
1 The 6,847 “islands” other than the mainland (Hokkaido, Honshu, Shikoku, Kyushu, and
Okinawa) are defined as remote islands in Japan in the Handbook of Remote Islands Development,
which is published by the National Institute for Japanese Islands. This also says that “island” has
to satisfy all the following requirements based on the survey conducted by the Hydrographic and
Oceanographic Department in 1986: (1) they must have a girth of over 0.1 km; (2) they must have
a narrow structure such as bridge or pier if they have a fixed link to the mainland; and (3) they
must not be reclamation lands.
2 We hereafter refer to these three Special Laws and Law for Development of Remote Islands as
“Remote Islands Development Laws.”
3 According to the Annual Report on the Japanese Economy and Public Finance 2005 published by
the Cabinet Office, the total amount of outstanding national and local long-term debts was
estimated at 774 trillion yen (the budget deficit in relation to GDP is almost 150%) at the end of
2005.
4 The merger of municipalities has been promoted under the Special Law on the Merger of
Municipalities, enacted on March 29, 1965, and amended July 26, 1999. The number of
municipalities decreased from 3,232 at the end of March 1999 to 1,822 at the end of March 2006.
5 Most financial aid to remote islands from the central government and prefectures is provided to
each municipality that controls remote islands. We therefore equated fiscal expenditure of
municipality with financial aid to remote islands. It is difficult to calculate expenditure in each
island as each has some projects that the central government subsidizes directly.
6 This data is from Handbook of Remote Islands Development published by the National Institute
for Japanese Islands.
7 Many studies have been conducted to determine a tourism multiplier, such as ARCHER, 1982,