The Present Problem of the Hokkaido Regional Economy and a Remedy: A Reform Plan of the Institution of Money and Finance by Using Hokkaido Community Currency

Abstract

Hokkaido as a regional economy outside metropolitan areas in Japan has suffered many serious economic problems in the ‘two lost decades’ caused by the current trend of globalization of capitalistic market economies. For instance, prolonged depression, decline of local economies, disparity between urban and rural regions in term of the rate of bankruptcies and the rate of unemployment, and persistent interregional balance of payments were observed. Hokkaido is frequently advised to strengthen its secondary industries to lessen its big interregional deficit of payments, however, it seems to be out of date in our post-industrial age and irrelevant to the region whose major sectors are agriculture and tourism. The implicit assumptions of theory of comparative advantage that back up such a remedy are also examined. In order to give a theoretically possible answer to such problems, the present paper, based on evolutionist institutional design in terms of money and finance, proposes a new reform plan for creating Hokkaido Community Currency (HCC) for enhancing local production for local consumption and forming a more sustainable and ethical socioeconomy.