Abstract
Critical transport studies view transport systems as socially constructed and politically situated, challenging the prevalent approach centered on technical efficiencies and utilities in transport research. However, existing approaches have not sufficiently emphasized the institutional path dependence and contingencies arising from historical decisions. This study addresses this gap by introducing historical institutionalism (HI) as a framework for interpreting institutional stability and changes in rail transit systems and transit-oriented development (TOD). HI reflects a scientific constructivist epistemology to explain the power dynamics and historical contingencies underlying institutions. It complements existing lenses that focus on historical details, class relations, or everyday situations. An HI analysis of Tokyo illustrates how path dependence and contingent decisions preserve and reinforce a globally rare institution that encourages private rail transit entities to profit from non-transport businesses. This institution permits land speculation and underserves less populous areas because it expects rail entities to be self-financed through profits rather than relying on subsidies. Its continuous reinforcement has led policymakers and the public to take it for granted and rarely consider alternatives. Such HI insights allow transport research to critically understand how policies stabilize, change, and diverge, thereby informing theories and policymaking.
Introduction
Transport shapes urban space as a medium of political economy that is path-dependent on historical decisions. Since the 1980s, city regions have commonly involved private capital in funding and operating rail transit infrastructure through various land value capture (LVC) approaches (Suzuki et al., 2015). Mounting evidence suggests that rail transit infrastructure and surrounding land development often increase land prices and promote gentrification, in addition to encouraging sustainable development, as suggested by planning concepts such as transit-oriented development (TOD; Cervero, 1998; Dawkins and Moeckel, 2016; Shen and Wu, 2020). Institutional changes are core to understanding the power dynamics and situatedness of rail transit systems and their influences, especially when states, regions, and jurisdictions fund and use transit systems differently.
Compared with public transit authorities in the United States and Canada, funded through tax increment financing, Japan and China permit privately funded rail corporations to engage with and profit from property development and retailing near their infrastructure (Aveline-Dubach and Blandeau, 2019; Ingram and Hong, 2012). These rail entities differ in their (public or private) ownership, as well as in their permissions to speculate on land value. However, these institutional variations and their changes over time have been perpetually neglected in transport research during the 20th century (Perl et al., 2025). Recently, critical transport scholars have questioned the conventional transport engineering approach and the more progressive sustainable mobility paradigm coined by Banister (2008) to prioritize the physical, technical, and functional dimensions of transport.
Instead, critical transport studies emphasize the “diverse social, political, and economic dynamics that shape how transport is planned, regulated, organized, practiced, and contested in urban contexts” (Kębłowski et al., 2022: 74). From this perspective, rail transit systems and TOD do not simply promote sustainable development, but vary the distribution of costs and benefits between public and private interests (Sorensen, 2024; Wood, 2022). Such distributions often institutionalize to decide how LVC occurs, who receives the profits, and who pays the costs. Then, the institutions may change or become increasingly stable over time. Transport studies have occasionally explored institutional change and stability (e.g. Low and Astle, 2009), but a systematic framework remains nearly absent.
This paper proposes a historical institutionalist (HI) approach to fill this gap in understanding institutional dynamics, which responds to research agendas in critical transport studies (Kębłowski et al., 2022; Perl et al., 2025; Wood et al., 2020). First, it outlines existing approaches to rail transit and situates HI as a suitable lens to explore the power, timing, and ideas that can enact, change, and stabilize institutions (Hall, 2016; Steinmo, 2008). Then, an HI analysis of private railways in Tokyo illustrates this approach using empirical evidence. These discussions examine the following two research questions: First, how does HI effectively guide studies in explaining institutional stability and changes in rail transit systems, particularly around shifting public and private ownership over rail entities, as well as their permission to speculate on land value? Second, why and how have power asymmetries, path dependence, and historical contingencies made Tokyo a rare case of requiring rail entities to be financially self-sufficient through profits from non-transport businesses?
HI interprets political power and historical contingency by observing the logical chain underlying institutional stability and change. It highlights the timing and sequence of events to explain such stability and changes. HI guides social science studies using qualitative or quantitative methods to study primary or secondary materials for structuring explanations, centering on path dependence and power relations (Pierson, 2004; Steinmo, 2008). Tokyo adopts an institution that encourages fully private rail transit entities to become self-financed by speculating on land value. This institution intertwines the benefits of sustainability with the risks of speculation from rail transit systems. Through these discussions, this paper argues that HI contributes to critical transport studies by adding concepts and methods to understand institutions in political and operational histories. Private railways in Tokyo illustrate that power asymmetries and historical contingencies co-shape an institution, which not only promotes sustainable development but also influences it through multifaceted political relations.
Critical approaches to transport: Toward institutional thinking
Transport studies have increasingly problematized the insufficient concern with politics in the largely positivist transport field. Perl et al. (2025) argue, “it is only by understanding the politics (and the policy that reflects it) that the feasibility and, in turn, the potential and implications of the technology and economics of transportation can be better understood” (p. 3). Kębłowski et al. (2022) similarly criticize sustainable transport studies for their remaining technical ontology and argue for transport analyses of “socio-spatial impact, political-economic embeddedness and the power relations and regulatory framework by which they are shaped” (p. 77). Both arguments engage with a political turn in transport research. However, an approach dedicated to understanding institutional change and stability, a central concern in political inquiry, remains underdeveloped. This section reviews the transition from technical to critical studies of transport. It identifies that preexisting studies have not yet emphasized institutional path dependence and historical contingencies underlying regulations permitting rail entities to appreciate and capture land value by shaping physical mobility. This gap justifies HI as a suitable approach to institutional stability and change around rail transit systems and TOD.
From technical to critical transport studies
In The Transit Metropolis, Cervero (1998) defines a transit metropolis as “a region where a workable fit exists between transit services and urban form…What matters is that transit and the city co-exist in harmony” (p. 1). This seminal statement posits that sustainable transport studies should primarily focus on the physical and functional dimensions of transit-land use integration. As Kębłowski et al. (2022) argue, the sustainable transport approach constructively redirects the transport field from highlighting speed and car traffic to focusing on accessibility and street space (Banister, 2008), but it still focuses on efficiency and utility rather than the social and political dynamics that shape transport. Similarly, Sheller (2018) regards the transport justice approach as limited to utilitarian justice for efficient movement, arguing that it “presumes changes in mobility systems will not change the urban spatial form itself, nor disrupt existing social hierarchy…,” and “does not recognize the underlying wider policies of uneven mobilities” (pp. 27–28). She further criticized transport studies for justifying sustainable place-making owing to “its contributions to economic growth, job creation, and raising real estate values” (p. 70).
This claim is related to the same technical assumptions underlying studies on TOD, a planning concept supporting land development near rail stations and bus stops for sustainable development. Qviström et al. (2019) problematize TOD studies for favoring “a static and homogeneous spatial analysis of accessibility and density rather than (other) place qualities relating to dynamic socio-spatial processes” (p. 786). Such an approach has increasingly rendered TOD “a universal mechanism in which all cities apply a similar set of guidelines” (Wood, 2022: 2451). These guidelines are defined by physical characteristics such as density of uses, land use diversity, and facility design (the “Ds” principles; Cervero and Kockelman, 1997). Thereby, preexisting studies have hardly examined the social and political dimensions of TOD, which are constructed by public and private interests across the governance, transport infrastructure, and real estate property sectors (Sorensen, 2024). Instead, they increasingly departed from their early principles in the new urbanism movement and recognized TOD as a progressive concept compared to development-oriented transit led by speculative private capital (Dittmar and Ohland, 2004; Talen, 2002).
In addition to evolving critical debates in transport research (Kębłowski et al., 2022; Verlinghieri and Schwanen, 2020), three strands of social science approaches have exemplified critical interpretations of power relations in the transport infrastructure. None of these discussions has centered on institutional stability and changes over time. The first strand draws on the Marxist criticism of capitalism, which underlines historical materialism and revolves around the objective necessity of history for productive forces and class relations (Harvey, 2012; Lefebvre, 2003). Marxist analyses highlight that rail infrastructure projects often prioritize market interest and capital accumulation over social goals in mobility provision (Buier, 2020; Enright, 2013). This lens has widely influenced critical explorations that are not strictly Marxist studies (Addie, 2024; Graham and Marvin, 2001).
The second strand focuses on everyday situations rooted in sociological thought. These lenses emphasize material assemblage and power relations in past practices that shaped infrastructure to understand the present city regions, as exemplified in the historicized assemblage approach by Moss (2020, 2024) and the critical-historical perspective by De Block (2014, 2016). In addition, Flyvbjerg (2004) conceptualizes the applied phronesis approach, which pragmatically draws on productive aspects of power in everyday practice. This approach aims to interpret and manage cost overruns resulting from the prolonged implementation of infrastructure projects.
The third strand comprises political science approaches, which primarily revolve around the power relationships between elites and the public in infrastructure projects (Altshuler and Luberoff, 2003). Within political science, urban regime analysis deems power “the social production model of power, or ‘power to’ accomplish goals” (Mossberger, 2009: 43). This approach explores a regime as a governing arrangement comprising formal and informal public-private collaborations in shaping urban growth and transport infrastructure (Fainstein and Fainstein, 1986; Molotch, 1993; Stone, 1989).
Understanding institutional change and stability
These critical approaches interpret rail transit systems and their influence on city regions (e.g. TOD) as socially constructed by power dynamics among stakeholders, which contrasts with positivist examinations in technical transport studies. However, a significant gap persists: transport studies have not sufficiently explored institutions shaped by policy decisions in the past, as (other) social scientists have done through HI. As Perl et al. (2025) underscore in their research agenda in advancing transport politics and policy, transport scholars and practitioners only have “a remote awareness of the heritage of policies and programmes that shaped mobility’s governance landscape during the majority of the twentieth century” (p. 3). Consequently, transport studies have perpetually neglected how institutions of rail transit systems change around their public and private ownership, as well as their permission to speculate on land value during the 19th and 20th centuries.
In the 19th century, railways emerged carrying unrivaled volumes of goods and people at unprecedented speeds, which greatly increased nearby land values. In contrast to roads, railways required formally constituted entities to manage infrastructure and operate services, which began as private enterprises embedded in a laissez-faire political economy. This political economy allowed private capital to profit from speculating on land value appreciation owing to changes in accessibility (Martin, 1971). Until the mid-20th century, the public perception of railways as a form of natural monopoly causing inequalities urged policymakers worldwide to regulate and take over private rail. With the rise of automobiles eroding their revenue base, most rail entities worldwide were publicly owned by the end of WWII (Bogart, 2009; Shaw et al., 1998).
Since the 1980s, the situation has reversed as city regions have increasingly involved private capital in developing and operating rail transit systems, which pursue sustainable goals through neoliberal policymaking (Siemiatycki, 2005; Suzuki et al., 2015). Different jurisdictions have taken remarkably varied approaches to permit rail transit entities to speculate on land value by engaging in non-transport businesses. Although rail entities have limited engagement in land development across the West, Japan permits rail entities to profit from properties, resulting in a financially sound yet spatially polarized industry that better serves metropolises (Curtis et al., 2009; Kurosaki, 2020). Currently, a methodological framework for understanding the political power and historical contingencies underlying these diverse institutions remains underdeveloped.
HI specializes in such examinations by exploring institutional change and stability, as the following section explains. Altshuler and Luberoff (2003) describe HI as a marked political theory, where “a deep understanding of politics must proceed from an understanding of institutional arrangements and of historic pathways that cannot be observed currently” (p. 73). Until now, transport studies have occasionally used HI concepts to explore institutional changes, as Low and Astle (2009) exemplify in their path dependence analysis of transport institutions in Melbourne. More recently, Fowler (2022) borrowed HI concepts for “a political turn” in transport history, and Liu et al. (2024) elaborated on an HI framework to explain why a rail transit institution stabilizes. These antecedents have led to substantial recognition of HI and increasing interest among transport analysts. However, they either briefly discussed HI concepts together with other approaches (Fowler, 2022) or prioritized empirical purposes over methodological elaboration (Liu et al., 2024; Low and Astle, 2009; and most others). The following two sections bridge this gap by outlining the analytical concepts in HI and illustrating their relevance through an analysis of private railways in Tokyo, which reexamines their political and operational histories.
Historical institutionalism: Bridging the past to the present
HI is a social science lens that analyzes the past through qualitative or quantitative methods using primary or secondary sources (e.g. historical sociology). This approach differs from and complements approaches in history, which identify new historical facts grounded in primary archival materials (e.g. social history; Amenta, 2012; Skocpol, 1987). Within the social sciences, HI is a branch of new institutionalism, along with sociological and rational-choice institutionalism, developed across political science, historical sociology, and institutional economics. Compared with the “old” institutionalism focusing on describing formal rules, new institutionalism defines institutions as “formal or informal procedures, routines, norms, and conventions” that “can range from the rules of a constitutional order or the standard operating procedures of a bureaucracy to the conventions governing trade union behavior or bank-firm relations” (Hall and Taylor, 1996: 938).
Among its three branches, HI understands institutions by analyzing political power and the actions of powerful actors, such as elected officials, business elites, and their coalitions, in contrast to cultural norms in sociological institutionalism or market behaviors in rational choice institutionalism. Pierson (2004) discusses HI as an approach that revolves around explaining the historical contingency shaped by the pace, sequence, and timing of decision making. Such analyses reveal that “some outcomes may be more likely in some kinds of temporal context than in others, and similar causal factors may have more impact in some periods than in others” (Hall, 2016: 39). Thereby, HI regards institutional outcomes “as contingent and non-predictable rather than linear and predictable” (Steinmo, 2008: 133). Blyth et al. (2016) observe the “necessary materialism” in HI by focusing on political power, yet its emphasis on contingency contrasts with historical materialism that contends productive forces and class relations necessarily alter historical trajectories.
Path dependence is a widely recognized HI concept, meaning that institutions sometimes become increasingly difficult to change once established (Mahoney, 2000; Sorensen, 2015). A path-dependent institution self-reinforces and locks in because the required financial cost (large setup costs) or procedural knowledge (learning effects) for a new institution grows or because the coordination (coordination effects) and expectations (adaptive expectations) of policymakers hamper reforms (Pierson, 2004). The institutional path may still change abruptly at critical junctures triggered by exogenous events or incrementally owing to an endogenous shift in the power balance. Incremental change results in displacing the old with new institutions, layering the new on the old, converting the existing institutions internally, or drifting reforms. These situations are determined by the veto power and the level of discretion in rule interpretation and enforcement held by the defenders of existing institutions (Mahoney and Thelen, 2009).
HI interprets power in a manner similar to that of urban regime analysis, considering its shared roots in political science. Pierson (2016) defines power as “decisive political advantages for those with more resources” (p. 124), arguing that HI deems political power to be a process that institutionalizes advantage. It probes into how “core institutional arrangements-including policy arrangements-typically advance the interests of particular political coalitions” (p. 126). Hall (2016) further stresses powerful actors in coalition building as “institutions are created by social coalitions composed of actors powerful in the relevant arena and persist only as long as they retain an ample supporting coalition…” (p. 40). Coalitions often include policymakers, capitalists, and other elites, including those from citizen groups. They act collectively to mobilize power and assemble resources to induce or prevent changes that address their interests. Pierson (2004) notes, “collective action frequently involves many of the qualities conducive to positive feedback” (p. 33). A notable quality is “the prevalence of adaptive expectations” (Pierson, 2004: 33), indicating situations in which actors adapt actions to “pick the right horse” as they expect other option(s) to not win broad acceptance (p. 24).
HI studies have increasingly highlighted ideas to understand power. Blyth et al. (2016) identify the “unconscious decoupling” of HI analyses from ideational studies and argue for further alignment of the two strands of work. According to Pierson (2016), ideas increasingly matter when winning actors and coalitions deepen their power asymmetry against losing ones by institutionalizing their advantages over time. He engages with the three dimensions of power conceptualized by Lukes (1974), arguing that power asymmetry shapes the anticipated reactions of weaker actors to not openly contest in order to avoid retaliation from the powerful. The asymmetry then allows powerful actors to move from the open contestation of decision-making power (first dimension) to the often-implicit agenda-controlling power (second dimension) and hidden ideational/ideological power (third dimension). The third dimension of power stems from the fact that “powerful actors can gain advantage by inculcating views in others that are to their advantage” (Pierson, 2016: 128). Despite different historical approaches in HI and Marxist analysis, the third/ideational dimension of power reflects the Marxist term of false consciousness that addresses “those controlling the media, schools, churches, think tanks, or other key cultural institutions may promote beliefs in others” (Pierson, 2016: 128) and results in “what looks like consensus on the surface may reflect underlying inequalities of influence” (p. 129). In transport, a typical situation is that city regions have varied regulations over rail transit systems. Policymakers and commuters often take these regulations for granted without further interpretation.
In summary, as Mahoney (2021) elaborates, scientific constructivism constitutes a common epistemology in HI studies. This epistemology is constructivist because it assumes the objective of analysis to be socially constructed, and it is scientific because it relies on reasoning through rational logic. Scientific constructivism contrasts with two radical positions: essentialist science, which assumes the existence of an objective reality, and radical constructivism, which considers reality as determined by “human cognition and language” (Mahoney, 2021: 22). Compared with these approaches, HI employs “generalizable and public procedures for using evidence” (Mahoney, 2021: 284) to rationally interpret the institutions socially constructed by human behaviors and understandings. Thereby, in HI, institutional change and stability constitute “contingent propositions whose truth is established on the basis of logical reasoning and constructed evidence from the actual world” (Mahoney, 2021: 3). Logical reasoning here chiefly draws on interpreting the necessity and sufficiency between one condition to another, in which logical necessity means indispensability, not inevitability in the sense of historical necessity. HI can identify causal chains between historical events by tracing policymaking processes within cases or comparing conditions across cases (Pierson, 2004; Sorensen, 2015). In summary, as a macroscopic approach to explain institutional stability and change, HI is relevant to policymaking and complements antecedent lenses that emphasize class relations or everyday experiences.
Tokyo on private rail: Three stages of power asymmetry
Tokyo and its rail transit interest transport studies as an exemplar for achieving TOD in its technical definition of physical transit-land use integration. However, the system relies on an institution that permits and even encourages rail entities to preserve private ownership and profit from various non-transport businesses (Cervero, 1998; Curtis et al., 2009; Suzuki et al., 2015). Greater Tokyo is a city region comprising Tokyo Metropolis and the surrounding prefectures of Kanagawa, Saitama, Chiba, and the southern part of Ibaraki Prefecture. As Table 1 and Figure 1 outline, the Tokyo city region relies on a 2500 km rail transit system owned by four types of entities: two Japan Railway (JR) companies (JR East and Central), two metro systems, private companies, and third-sector operators funded through public-private partnerships. Most of them run heavy rail transit and can legally engage in non-transport businesses for profit (Kurosaki, 2020).
Categorization of railway entity by ownership in Greater Tokyo.
Source: Ministry of Land, Infrastructure, Transport and Tourism (2024).
Railway network by ownership in Greater Tokyo.
It is worth asking: Should policymakers consider such an institution as a paradigm for financing rail, or should they be aware of the risks of allowing private capital to speculate on land value? The first step in addressing these concerns is to understand why and how Tokyo adopted this institution, which is rarely seen outside of Japan (Suzuki et al., 2015). Previous studies on Tokyo have not emphasized these issues. They include detailed yet technical histories written by transport engineers (e.g. Yamamoto, 1993), as well as a few Marxist works that identify power asymmetries rooted in class relations using historical materialism (Mizuoka, 2012; Nakanishi, 2009). Moreover, cultural studies on the influence of rail transit systems on social change are noteworthy, while institutions remain a marginal concern in their scope (e.g. Freedman, 2011). This section presents a brief HI analysis of Tokyo from the 1868 Meiji Restoration onward to empirically illustrate HI as a suitable approach for critical transport studies to interpret institutions and inform policymaking.
Figure 2 summarizes the events throughout the contestation, asymmetry, and hegemony stages, with policy choices marked as X in black and unchosen alternatives marked as Y in gray. It depicts increasing returns to reinforce path dependence on private rail institutions at the center, outlines railway entities at each stage, and lists comparable events overseas over time at the bottom. The data collection procedure follows the HI principle of exploring “all relevant times and events” to avoid “cherry picking events based on a selective reading of history” (Mahoney, 2015: 215). To avoid arbitrary data selection, it first identifies precedent insights into the explored events and then accesses local archives and databases, such as the National Diet Library and National Archives (of Japan) in Tokyo, to collect primary materials written in Japanese and English. These insights and materials allow for a systematic interpretation of these events through an HI framework, which facilitates an alternative explanation of antecedent political and operational histories.
Contingent policy choices and unchosen alternatives over time.
Contestation stage: Coalition building and actor relationship
Following the 1868 Meiji Restoration, Japan was industrialized by introducing Western social orders and technologies under state leadership, with the early increasing involvement of private capital. As Pierson (2004) argues, “Path dependence has to mean…that once a country or region has started down a track, the costs of reversal are very high” (p. 20). Meiji policymakers, who were former samurai and court nobles, envisioned, but could not achieve, an institutional design that placed railways under state control owing to fiscal limitations. Former samurai and noble families related to the Meiji state privately funded the railway construction in 1872 (Nakanishi, 2009; Shibusawa Eiichi Memorial Foundation, 1956). This policy choice initiated path dependence on privately funded railways and was contingent, because options for introducing foreign funds or using only state funds to build railways at a slower pace were open.
The early Meiji timing allowed investors access to political power in the state-building process by controlling railways as the backbone of industrialization. Thus, railway owners applied political power as members of the Imperial Diet and coalesced to openly contest against railway bureaucrats led by the “father of railway” Masaru Inoue (1843–1910), who insisted on state control to contain monopolies and excessive competition over railways (Inoue, 1883). Railway investors led by Eiichi Shibusawa (1840–1931) had seats in the Imperial Diet (Shibusawa, 1900), allowing them to exercise de facto veto power to block the first railway nationalization attempt against their interests in 1892. After the contestation, Inoue resigned from leadership of the railway bureaucracy.
A result of the contestation is the 1900 Private Railway Law (shisetsu tetsudō hō), which permitted private rail companies while stringently regulating their registrations, fares, operations, and non-transport businesses. Notably, the law incorporated a fare regulation system that required private entities to obtain permission from the central government for fare adjustment, which should be justifiable as serving the public interest (Diet of Japan, 1900). Later, regulations throughout the 20th century consistently adopted this regulation system, which constrained profit from fares for rail entities and prevented them from burdening passengers.
However, railway nationalization still occurred in 1907, following the 1895 Sino-Japanese War and the 1905 Russo-Japanese War. This action highlighted the importance of the sequence and timing of events, as the two wars motivated industrialists to partially support state control over railways. These industrialists had nationalistic mindsets and ties to the state, which prompted them to back the political and colonial pursuits of Japan in the imperialist rivalry (Harada, 2005; Nakanishi, 2009). Meanwhile, the political advantage of railway industrialists (over bureaucrats) in backing private railways persisted, as the former contested the reform to reduce its extent from nationalizing 32 to 17 companies and generously compensating the purchased ones (Cabinet of Japan, 1906; Ericson, 1996).
Local bureaucrats of former Tokyo City, present-day central Tokyo, also pursued overtaking profitable private tram systems to enrich its municipal budget (Miki, 2010: 49). Their action induced a municipal transit system (tōkyō shiden) and prevented private railways from entering its service area along the Tokyo City boundary. Currently, most of this central area is served by two metro systems. Thus, both national and local contestations over railway ownership resulted in a certain extent of public control of railways by the early 20th century. However, neither chiefly aimed to eliminate or curb monopolistic railway capital, because such a reformist agenda had limited support in Meiji Japan from 1868 to 1912, when political elites prioritized industrial development to catch up with the West (Johnson, 1982).
Consequently, the Private Railway Law remained in effect after the nationalization action, and the new 1907 Railway Nationalization Law (tetsudō kokuyū ho) stated in Article 1 that local railways could continue to be private. The state did not attempt to eliminate private capital in railway operation and could not change it due to the railway market slump after the 1907 reform (Oikawa, 2014). Railway bureaucrats responded to the slump by enacting the 1910 Light Railway Law (keiben tetsudō hō) to encourage private investment in light railways by relaxing rules for establishing new companies under the 1900 Private Railway Law. This policy response reflected that the early Meiji institutionalization of the Japanese railway sector raised the costs and created difficulties in enacting any change.
In 1910, private investors remained in the railway market. According to the above regulations, in principle, they could not raise fares freely and could not engage in non-transport businesses without permission from the state. However, “previous ‘losers’ are often a catalyst for institutional change” (Pierson, 2004: 135). They likely act in the post-critical juncture reactive sequences “marked by backlash processes that transform and perhaps reverse early events” (Mahoney, 2000: 526). Evidently, the generous compensation from nationalization and those stringent regulations over private railways induced the light railway company Minoh-Arima Electric Tramway (minō arima denki kidō), founded by a group of former managers of the nationalized Hankaku Railway. It developed housing and retail properties along its rail corridors from the center to the north of Osaka, pioneering joint transit-property development in Japan (Sorensen, 2002; Watanabe, 1992).
Asymmetry stage: Agenda setting and incremental change
Minoh-Arima Electric Tramway (later Hankyu Railway) began its joint transit-property development when central bureaucrats introduced the Garden City concept to Japan, while automobiles remained a luxury only for the wealthiest (Yamamoto, 1993). This situation allowed Hankyu investor Ichizo Kobayashi (1873–1957), to brand their chief residential properties as garden cities (denen toshi) and attract purchasers with rail transit services (Kobayashi, 1953). In 1918, Kobayashi advised retired Eiichi Shibusawa to begin practicing in Tokyo and continued to label their rail transit-served housing estates in suburban Tokyo as garden cities (Watanabe, 1992). Revived private rail entrepreneurship, enriched by non-farebox revenues from housing estates (and later from department stores and tourist facilities) along rail corridors, assured policymakers that the railway sector still demanded private investment.
In 1919, the newly enacted Local railway law (chihō tetsudō hō) unified the 1900 Private Railway Law and the 1910 Light Railway Law into a framework adopting flexible rules from the latter. Managerial bureaucrat Keita Goto (1882–1959) engaged in drafting the law and soon moved from bureaucracy to industry. He took over the suburban enterprises founded by Shibusawa and developed them into the present Tokyu Corporation, another rail conglomerate with non-transport businesses (Inose, 1992). Such conglomerates proliferated around Tokyo at that time, as the 1929 revision of Local Railway Law removed its preexisting Article 9, which required private rail companies to obtain permission from the state to conduct non-transport businesses (Diet of Japan, 1929).
This deregulation made private railway entrepreneurship the “right horse” (Pierson, 2004: 24) for economic and transport policymakers to ride. Before World War II, Japanese railway conglomerates thrived when their Western counterparts began to decline under stringent regulations and automobilization (Haywood, 1997; Martin, 1971). Moreover, automobile ownership remained low in Tokyo because Japan did not have a productive automaker comparable to Ford or Chrysler, and the outbreak of WWII urged the militarized state to stop importing US-made cars, which made up the majority of the market (Yamamoto, 1993). Wartime policies emphasized centralization, which ended by reinforcing major private rail conglomerates that took over small bus businesses for wartime efficiency (Keio Railway, 1978; Yamamoto, 1993). Their owners sat in the wartime Diet, with Ichizo Kobayashi and Keita Goto serving as state ministers who devised industrial and transport policies (Miki, 2010).
After WWII, the heyday of railway industrialists gave way to reforms under the Supreme Commander for the Allied Powers (SCAP) from 1945 to 1952. It converted national railways directly operated by the state into a public corporation named the Japanese National Railway (JNR). In principle, it had to be financially self-reliant, with scant non-transport businesses and law-bound political power (Diet of Japan, 1949). Further, the SCAP forced private investment out of the Teito Rapid Transit Authority (TRTA), the antecedent of Tokyo Metro today (Sato, 2000: 65), and dismantled the wartime Great Tokyu Railway, comprising five of the present private conglomerates, with Kobayashi and Goto purged from their state leadership.
Apart from these actions under the SCAP, postwar reforms in Japan did not change private railway regulations to curb private capital (Nakanishi, 2009). By contrast, in 1952, national railways became mainstream in Europe (Bogart, 2009), and American rail barons struggled with regulations and automobiles (Martin, 1971). Thereafter, Japanese rail conglomerates continued to operate flexibly for profit. Moreover, private cars remained scarce as the postwar infant industry policy in Japan continued to control foreign car imports for three decades (Atsumi, 2017). Consequently, rail conglomerates across Tokyo thrived at a time, favoring their institutional reinforcement, as reflected by their substantial non-farebox revenue from the property development, hospitality, and tourism sectors (Goto, 1953; Havens, 1994; Tsujii, 2012).
Their enrichment from these businesses enhanced their institutional advantage to the second dimension of agenda control power as “competing interests are recognized…but open contestation does not occur because of power asymmetries” (Pierson, 2016: 127). During the four postwar decades, private rail conglomerates gained further influence over ground transport in Tokyo. Tokyo Metropolis abandoned its tram tracks from 1967 to 72 and replaced them with faster metro tracks, allowing private trains to run through services to enter the city center. In 1973, Japan began providing low-interest loans and subsidies on interest payments to construct private railways in publicly planned new towns (Kobayashi, 1971), and the state soon supplied the financing schemes without requiring direct engagement in similar public sector projects, as exemplified by the Shintamagawa Line under Tokyu Railway, completed in 1979 (Tokyu Railway, 1980: 145).
Hegemony stage: Institutionalized advantage and the ideational dimension of power
As neoliberalism prevailed in the West, Japanese policymakers began to consider the institutions of private rail conglomerates for national railways, as evidenced by advice-seeking conversations between JNR President Fumio Takagi (1982) and conglomerate owners. As highlighted in these conversations, a precondition for this policy shift was that private rail conglomerates financially outperformed other rail entities, notably the indebted JNR. The other was the continuous state control by the Liberal Democratic Party (LDP), which is a big-tent and pro-corporation conservative party. From 1982 to 1987, Prime Minister Yasuhiro Nakasone (1918–2019) launched reforms to privatize and separate JNR into JR as regional monopolies, returning intercity railways to private ownership after eight decades and allowing them to conduct non-transport businesses (Diet of Japan, 1986).
This railway reform was blatantly political. PM Nakasone (1996) declared that the public corporation had to be separated because he aimed to dismantle the National Railway Workers Union (NRU) to devastate NRU-centered trade unions nationwide, and then the union-endorsed Japan Socialist Party (JSP). Leftist politicians and labor unions opposed the plan to separate the JNR into multiple regional companies, but an underestimated fact was that few of them opposed privatization as the direction of reform (Japan Socialist Party, 1986; Maki, 2017). This fact made the JNR reform the moment when the private rail institution extended to the third dimension, which allowed it to “gain advantage by inculcating views in others that are to their advantage” (Pierson, 2016: 128). Apart from the NRU and the Japanese Communist Party, most leftist actors, such as JSP members, agreed to privatize the JNR because they saw its growing debt as a serious problem. They believed that Railway operations can and shall be profitable instead of in deficit, an idea inculcated by the reinforcement of institutions favoring private rail conglomerates in conjunction with the pro-corporation conservative regime over decades. This view contrasts with the counter idea that Railways need to be tax-subsidized as a public good instead of a private commodity, which is prevalent in many regions, such as Europe (Shoji, 2001).
This was a situation in which institutions influenced actors to further institutionalize the advantage of winners. In power asymmetry, winners use “their power to change ‘the rules of the game’ to create further advantages down the road” (Pierson, 2016: 131) by imposing outcomes on losers. The 1986 Railway Project Law (tetsudō jigyō hō), enacted in the JNR reform, changed the rules of the game by endorsing the idea of operating the railway for profit (Diet of Japan, 1986). According to the law, JR companies can engage in non-transport businesses resembling the conglomerates, with planned future reforms on track toward “full privatization” (kanzen mineika) of reselling the state-owned JR stocks (Mizutani and Nakamura, 2004: 311). However, smaller operators in less-populous areas have increasingly struggled to survive because they receive neither sufficient profits nor legally mandated subsidies (Ministry of Land, Infrastructure, Transport and Tourism, 2024). As a political outcome for the loser, the JSP reorganized itself amid the realignment of trade unions. The left-wing party then lost its position as the largest opposition party against the LDP after 1995 (Ikeda, 2017).
From 2002 to 2024, reforms resold the stocks of JR East, JR Central, and Tokyo Metro to individuals and private entities, leading to their listing on the stock market. These former public entities have now become new conglomerates that profit from land value, leading to compelling profitability with only occasional subsidies, in contrast to heavily subsidized entities elsewhere (Kurosaki, 2020). However, their revenue increasingly goes to private pockets instead of being transferred to public funds for need-based rail services in less profitable areas. Today, private rail entities tend to intensify their investments in and near central Tokyo while abandoning unprofitable services in smaller cities across Japan (chihō toshi; Takeda and Mizuoka, 2003). Consequently, local jurisdictions often have to spend their public budgets or establish public-private partnerships (PPPs) to support unprofitable rail services. Policies for maintaining unprofitable local rail transit have recently increased under depopulation and infrastructure deterioration (Utsunomiya, 2020), but few have challenged the institution that prioritizes the financial self-reliance of rail entities.
Discussion and conclusion: Institutionally exploring transport in power and time
This paper presents empirical findings from Tokyo to illustrate how HI allows transport scholars to understand policies differently from technical approaches. HI is first an approach to political power and historical contingency that traces the logical chain underlying institutional stability and change. Second, it is a macroscopic approach that observes the timing and sequence of events to explain such stability and changes, centering on path dependence and power asymmetry (Pierson, 2004; Steinmo, 2008). Third, HI guides social science studies using qualitative or quantitative methods to study primary or secondary materials for structuring explanations. These methodological emphases guide the illustrative analysis of political and operational histories of private railways in Tokyo.
This analysis of Tokyo explains an institution that encourages private rail transit systems funded through farebox and non-farebox revenues (e.g. profits from properties) instead of purely farebox or farebox plus subsidies. The institution is neither a simple outcome of technical progress for sustainable development nor an inevitable result of class relations in a capitalist society. Instead, it arises from the combined forces of a pro-corporation state, a tight government budget, stringent regulation over fares, demonstration of self-financing capacity by rail entities, and rare public opposition to their land speculation. Therefore, power asymmetries between the industrialist and conservative coalition and its rivals remain substantial. Meanwhile, historical contingencies prevented private cars from replacing trains in the ground transport market in the mid-20th century because of policies implemented during and after WWII. These contingencies reinforced path dependence on private railways and deepened power asymmetry against alternatives.
As Figure 2 shows, sequential events increased their asymmetry over the 20th century until the idea that rail entities should be self-financed but not tax-funded regularly guided reforms around rail transit systems and deterred policymakers and the public from considering alternative institutions in the late century. This situation demonstrates an institution underpinned by power asymmetry in the ideational dimension (Pierson, 2016), which shapes how rail transit systems and nearby development alter the distribution of benefits and costs between public and private interests (Sorensen, 2024). Antecedent studies have not sufficiently considered these issues in understanding rail transit and TOD because they have emphasized implementing rail transit for sustainable development against the costs of private automobiles (Cervero, 1998; Curtis et al., 2009; Suzuki et al., 2015).
Lessons from Tokyo exemplify that HI contributes to aligning transport and political studies, which have long underemphasized the methods and lessons from each other (Perl et al., 2025). In contributing so, HI complements other critical approaches. For instance, Moss (2024) argues, “identifying which components of an infrastructural configuration have a propensity towards path dependence and within which socio-technical assemblage is essential to pinpointing openings for transformation” (p. 58). HI interprets the institutional dynamics of formal and informal rules over infrastructure, enabling analysts to locate and engage in such path-dependent pasts. Such path-dependent pasts are key to exploring various puzzling yet underexplored questions in transport and infrastructure research. For instance, why do rail transit systems in Anglo-American cities such as London and New York profit much less from properties than those in Tokyo? In these cities, have historical contingencies and power asymmetries prevented policy agendas from encouraging private rail entities? Furthermore, why have some regions developed more light rail transit projects than others? Why do investment weights for railways and highways differ across regions? Why do high-speed rail projects succeed in some regions but not in others? Exploring questions on not only rail transit systems but also other transport modes can inform policymakers on how to bring about changes.
In conclusion, research agendas exploring transport as a social and political construct have highlighted the need for further use of political and policy lenses. This study proposes an HI approach to understanding institutional stability and change in transport and centers on discussing rail transit as an example. HI explains differences in the governance of city regions by observing power asymmetries and historical contingency. Railway regulations in Tokyo allow private rail transit entities to speculate on land values, exemplifying how political power and historical contingencies co-shape institutions. Institutions then become path-dependent, often taken for granted by the public as power asymmetries self-reinforce over time. This situation often prevents policymakers from contemplating alternatives, and an HI (re)interpretation of the past identifies such situations and reveals practical options hidden within politically shaped institutional realities.
Footnotes
Acknowledgements
I am grateful to the special issue editors, the Urban Studies team, and the three anonymous reviewers for their editorial support and constructive comments throughout the publication process. I appreciate the opportunity to participate in the roundtable for the special issue Urban Transport as a Social Construct at the 2025 RGS-IBG Annual International Conference held in Birmingham, United Kingdom. I would also like to thank Professor Andre Sorensen for inspiring my methodological engagement with historical institutionalism.
Funding
The author disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This paper receives support from the Grant-in-Aid for Research Activity Start-up project, “Interrogating Private Railway Capital: A Historical Institutionalist Approach to Transit-Oriented Development in Contemporary Tokyo” (Number: 24K22601), funded by the Japan Society for the Promotion of Science (JSPS).
Declaration of conflicting interests
The author declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.