For more than three decades, Maxwell Tabarrok notes, Japan has endured near complete economic stagnation:
But despite severe economic stagnation, Japan is still a desirable place to live and work. The major costs of living, like housing, energy, and transportation are not particularly expensive compared to other highly-developed countries. Infrastructure in Japan is clean, functional, and regularly expanded. There is very little crime or disorder, and almost zero open drug use or homelessness. Compared to a peer country like Britain, whose economic stagnation over the past 30 years has been less severe, Japan seems to enjoy a higher quality of life.
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Japan’s zoning code is set at the national level and therefore tends to be much less restrictive than the local zoning codes found in the West. Its national system lays out just 12 inclusive zones, which means the permitted building types carry over as you move up the categories, allowing mixed-use development by default. This compares favorably to zoning codes in the US which often have multiple dozens of exclusive land use categories. Even the most restrictive category in Japan’s system, shown in the top left (below), allows people to run small shops and offices out of their homes. There are floor-area-ratio limits and setbacks, but they are modest, and there is no distinction between single and multi-family housing units within these limits.
For environmental permitting, Japan mostly relies on explicit standards for environmental impact, rather than a lengthy permitting process where applicants must write detailed reports about possible alternatives and mitigation measures under threat of lawsuit, as in the US. Japan does have a copy-cat National Environmental Policy Act (NEPA) procedural environmental law that was enacted in 1997, but it has two important differences that prevent its evolution into the procedural morass seen in other countries.
First is explicit numerical standards for which projects must go through the impact statement process, rather than the hand-waving ambiguities of NEPA. These standards generally only include large infrastructure projects like a port extension exceeding 300 hectares. Some residential projects are covered, but only those which exceed 75 hectares in area. Only 854 environmental impact assessments have been started in Japan since the act passed, and there have been zero for residential construction projects.
Second, the completed environmental assessments are harder to sue over than in Western countries. Plaintiffs need to have a personal and legally protected injury to have standing, rather than a generalized concern for the environment as in the US. Plus, the greater specificity of when the law applies and a court that has a much more deferential attitude towards agency determinations means the lawsuits are harder to win.
Permissive national zoning and an absence of environmental proceduralism leads to Japan having the highest rate of housing construction and the lowest home price to income ratio in the OECD.
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Japan’s social order is incredibly valuable. The annual cost of crime in the United States is around $5 trillion dollars which is 18% of GDP. Higher crime rates would threaten the high-density urbanism which makes Japanese cities so affordable and desirable.
We’d be better off if D party courts were not on Team Crime, and without mischievous suits in D party courts.
Japan is also a monoculture. They all share a common ideology. They make immigration very difficult and usually limit visas.
Japan’s population is actually declining, so its per capita GDP is rising. The Japanese are actually getting richer. This is perhaps the best possible economic trend.
Perhaps stagnation is actually stability?
Instead of churn that’s called GDP on top of a mountain of human suffering.