Keio University Syllabus and Timetable

Economic History of Japan A: First Quarter

In the early seventh century, the imperial court completed introduction of the Chinese centralized administrative and landownership regime, which only proved to fail to provide appropriate incentives to relevant stake holders. Adjustment of the regime to the reality brought about the manorial system.

The manorial system, the landownership and administrative system in medieval times, was a characterized by multiple claimants and stratified authorities on a parcel of farmland. This complicated mechanism better worked to share risk and to mitigate incentive problems that had become salient in the ancient times. Then, in early modern times, the shogunate and lords came to protect peasants' exclusive property right of a parcel farmland the peasant family cultivated, to provide augmented incentives to peasants who now became more resilient against external shocks. The protection of exclusive property right in the early modern times formed the institutional basis of the market economy. At the same time, the shogunate attempted to stabilize the peasant economy by regulating the farmland and agricultural financial markets. The regulation enabled the social stability under the shogunate regime.

After the Meiji Restoration, the exclusive property right was reauthorized, and regulations on the farmland and financial markets were abandoned. Furthermore, modern judicial system and firm organizations, along with modern technologies, were introduced from the West. The modernization effort accelerated market expansion and ignited industrialization.

How was the manorial system formed, and how did it mitigate incentive problems then? How was property right of peasants was formed and protected in early modern times? Finally, how was Japan industrialized after the Meiji Restoration? In the real world, the first best resource allocation, which is presumed to be realized under perfect competition, cannot be achieved anyway. Given the structure of informational asymmetry and other technological conditions, a better second best has been sought and has evolved over times. Aim of the course is to understand economic development of Japan from the medieval times, through the Tokugawa period and the Meiji Restoration, to the industrial revolution in the late 19th century.

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Lecture note are to be downloaded from the course page in www.keio.jp

Masahiko Aoki, Toward a Comparative Institutional Analysis, Cambridge: The MIT Press, 2001.

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