Transformation of the Institutional Political Economy of Japan: From Rice Field Property Reform to the Zaibatsu

Year 2023, Volume: 23 Issue: 1, 89 - 106, 23.01.2023

Mürsel Doğrul , Cem Korkut

https://doi.org/10.21121/eab.1087133

Abstract

This article examines the evolution of the institutional political economy of Japan from feudal to modern times and conceptualizes the origins of the Zaibatsu (financial clique of Japan) heritage, which has been around for centuries. The historical events were considered based on their impact on economic transformation while the methodology is based on the theoretical framework of institutional economics. In this way, the Japanese economy has been examined from a variety of angles within the contexts of the Edo Period, Meiji Reforms, and World Wars. We assert that there is a historical continuity between the rice field property reforms of the Edo Period and the success of the zaibatsu. The linkages between the state, business, and labor illuminate the economic evolution of Japan, which is clearly stated throughout the research with regard to the material and nonmaterial components. As a result, while distinguishing itself from the enormous and present literature on the Japanese economy, this study stresses rice field reforms and their continued repercussions on the main institutions of Japan’s economic miracle.

Keywords

Institutional Economics, Political Economy, Longue Durée, Development, Japan, Meiji Era, World Wars

References

• Acemoglu, D., & Robinson, J. (2008). The Role of Institutions in Growth and Development. Washington DC: World Bank.
• Acemoglu, D., Johnson, S. & Robinson, J. (2002). Reversal of Fortune, Geography and Institutions in the Making of the Modern World Income Distribution. Quarterly Journal of Economics, 117, 1231–1294.
• Adelman, I. (2006). Democracy and Development. In D. A. Clark (Ed.), The Elgar Companion to Development Studies (pp. 105–111). Cheltenham: Edward Elgar.
• Addicott, D. A. C. (2017). The Rise and Fall of the Zaibatsu: Japan’s Industrial and Economic Modernization, Global Tides, 11(5). Retrieved from http://digitalcommons.pepperdine.edu/globaltides/vol11/iss1/5
• Akkemik, K. A. (2009). Industrial Development in East Asia: A Comparative Look at Japan, Korea, Taiwan and Singapore (Har/Cdr edition). World Scientific Pub Co Inc.
• Akkemik, K. A. (2015). Recent Industrial Policies in Japan. In: Yülek M. (eds) Economic Planning and Industrial Policy in the Globalizing Economy. Public Administration, Governance and Globalization, 13. Cham: Springer https://doi.org/10.1007/978-3-319-06474-1_9
• Ambaras, David R. (1998). Social Knowledge, Cultural Capital, and the New Middle Class in Japan, 1895-1912. Journal of Japanese Studies, 24(1), 1–33. doi:10.2307/132937
• Aoki, I. (2008). Decentralization and Intergovernmental Finance in Japan. Tokyo: Research Department Policy Research Institute.
• Aviv, E. (2016). Millet System in the Ottoman Empire. Oxford Bibliographies, Islamic Studies, Retrieved from https://www.oxfordbibliographies.com/view/document/obo-9780195390155/obo-9780195390155-0231.xml
• Aydın, C. (2007). The Politics of Anti-Westernism in Asia: Visions of World Order in Pan-Islamic and Pan-Asian Thought, E-book. New York: Columbia University Press.
• Banno J. & Ōno K. (2010) Meiji ishin, 1858–1881. Tokyo: Kōdan-sha.
• Beasley, W. G. (1960). Feudal Revenue in Japan at the Time of the Meiji Restoration. The Journal of Asian Studies, 19(3), 255.
• Belostecinic, G. (2013). Through Financial Stability to Sustainable Economic Growth. Review of General Management, 18(2), 20–37.
• Bird, R. M. (1977). Land taxation and economic development: The model of Meiji Japan. The Journal of Development Studies, 13(2), 162–174.
• Boer, J. D. (2005). Before Oil: Japan and the Question of Israel/Palestine, 1917-1956, The Asia-Pacific Journal, 3.
• Bromley, D. W. (1999). Sustaining Development: Environmental Resources in Developing Countries (New Horizons in Environmental Economics). Cheltenham, UK: Edward Elgar Publishing.
• Butterfield, F. (1973), Kissinger Called Unable to Assure Tokyo on Oil, The New York Times Archives, November 16. Retrieved from https://www.nytimes.com/1973/11/16/archives/kissinger-called-unable-to-assure-tokyo-on-oil.html
• Byoungki, K. (2006). Infrastructure Development for the Economic Development in Developing Countries: Lessons from Korea and Japan. Graduate School of International Cooperation Studies. Kobe University.
• Chalmers, A. J. (1987). Political Institutions and Economic Performance: The Government-Business Relationships in Japan, South Korea, and Taiwan, in The Political Economy of the New Asian Industrialism Frederic Deyo (Ed.), Ithaca: Cornell University Press.
• Clawson, P. (1995). The East Asian miracle: Economic Growth and Public Policy: By the World Bank. New York: Oxford University Press for the World Bank.
• Diamond, J. M. (1997). Guns, Germs and Steel: A Short History of Everybody for the last 13.000 years. London: Random House.
• De Bary, W., Theodore, K., Donald, Tanabe, G., &Varley, P. (1983). Sources of Japanese Tradition from Earliest Times to 1600, Columbia University Press.
• Dower, J. (1979). Empire and Aftermath: Yoshida Shigeru and the Japanese Experience, 1878-1954. Cambridge, Mass.: Harvard University Press.
• Duus, P. (1976). Feudalism in Japan (Studies in world civilization), by Knopf and distributed by Random House.
• Esenbel, A. S. (2018). Geopolitical Visions and Foreign Policies of Japan and South Korea in the 21st Century in the Light of the Changing World Order, Boğaziçi University-TÜSİAD, December 2.
• FEPC, “History of Japan’s Electric Power Industry”, Federation of Electric Power Companies of Japan, 1972, Retrieved from: https://www.fepc.or.jp/english/energy_electricity/history/.
• Funabashi, Y. (1992). Global Partners: Japan and America, Foreign Policy, 24–39.
• Grabowiecki, J. & Dąbrowski , M. (2017), Abenomics and Its Impact on the Economy of Japan, Optimum Studia Ekonomiczne, 5(89), Retrieved from: http://cejsh.icm.edu.pl/cejsh/element/bwmeta1.element.hdl_11320_6387/c/Optimum_5_2017_J_Grabowiecki_M_Dabrowski_Abenomics_and_Its_Impact_on_the_Economy_of_Japan.pdf
• George, A. (1992). Japan as America’s Global Partner: Problems and Prospects. Journal of Northeast Asian Studies, 11, 3–18.
• Gordon, A. (2003). A Modern History of Japan from Tokugawa Times to the Present. New York: Oxford University Press.
• Gurtov, M. (2020). The “End of Poverty” Illusion: Global and East Asian Realities in the COVID-19 Pandemic. The Asia-Pacific Journal, Japan Focus, 18(17) ID 5470, Sep 1.
• IDE-JETRO (2008). Final Report, Institute of Developing Economies, Japan External Trade Organization, 1995-2008. Retrieved from: https://d-arch.ide.go.jp/je_archive/english/finalreport/index.html.
• Handelman, H. (2016). Challenges of the Developing World, Rowman & Littlefield Publishers; Eighth Edition.
• Hayashi, T. (1984). Project on Technology Transfer, Transformation, and Development: The Japanese Experience. Final report Unknown Binding, The United Nations University, January 1.
• Hook, G. D., Gilson, J., Hughes, C. W., & Dobson, H. (2011). Japan’s International Relations: Politics, Economics and Security. Oxford: Routledge.
• Huntington, S. P. (1993). The Third Wave: Democratization in the Late Twentieth Century, University of Oklahoma Press. Imagawa, E. (1993). The Role of Government in Economic Development - An Asian View. The Soka Economic Studies Quarterly, 22(4), 35-50.
• Inoguchi, T. (1987). The Political Economy of Japan: The Changing International Context (Vol. 2). Stanford University Press.
• Inoguchi, T. (2002). The sociology of a not-so-integrated discipline: the development of international relations in Japan. Journal of East Asian Studies, 2(1), 111-126.
• Ito, T., & Weinstein, D. E. (1996). Japan and the Asian Economies: A Miracle in Transition. Brookings Papers on Economic Activity, 1996(2), 205-272.
• Johnson, Chalmers A. (1987). “Political Institutions and Economic Performance: the Government-Business Relationships in Japan, South Korea, and Taiwan”, The Political Economy of the New Asian Industrialism Frederic Deyo (ed.), Ithaca: Cornell University Press.
• Johnson, U. A. (1990). The United States and Japan: Cooperative Leadership for Peace and Global Prosperity. (Lanham/MD: University Press of America).
• Kazuo, S. (1966). The Early History of the Zaibatsu, The Developing Economies, 4(4), 535-566, DOI: 10.1111/j.1746-1049. 1966.tb00492.x.
• Kazutoshi, K. (2004). Unemployment Policy in Prewar Japan: How Progressive Was Japanese Social Policy? Social Science Japan Journal, 7(2), 199-221.
• Keene, D. (2002). Emperor of Japan Meiji and His World, 1852-1912. New York: Columbia University Press.
• Kimura, F. (2009). Japan’s Model of Economic Development: Relevant and nonrelevant Elements for Developing Economies. Retrieved from: https://www.semanticscholar.org/paper/Japan’s-Model-of-Economic-Development%3A-Relevant-and-Kimura/c65aace51677ab26bea92574bec02fa3cd85ab7f#citing-papers
• Kimura, J. (1985). Japan’s Middle East Policy: Impact of the Oil Crises, Kobe University Law Review, 19, 17–37, http://www.lib.kobe-u.ac.jp/repository/00166912.pdf.
• Kitaoka, S. (2018). The Significance of the Meiji Restoration. Asia-Pacific Review, 25(1), 5–18.
• Komiya, R., & Itoh, M. (1988). Japan’s International Trade and Trade Policy, 1955–1984.
• Koyama, K., & Suehiro, S. (2020). Covid-19 and the Outlook for Oil, Natural Gas, and LNG Demand in 2021. The Institute of Energy Economics, Japan, 8 May 2020. Retrieved from: https://eneken.ieej.or.jp/data/8933.pdf
• Kōsai, Y., & Goble, A. (1989). The postwar Japanese economy, 1945–1973. In P. Duus (Ed.), The Cambridge History of Japan (The Cambridge History of Japan, pp. 494-538). Cambridge: Cambridge University Press.
• Kösebalaban, H. (1998). Japan Grand Strategy: Continuity and Change in Twentieth Century Japan Foreign Policy”, Divan: Journal of Interdisciplinary Studies 5, 57–98.
• Krämer, H. M. (2013). Historical Origins of a Welfare-State Regime: Unemployment Protection in Japan, 1919–1949. Social Science Japan Journal, 16(1), 131-153.
• Lynn, L., H. (1994). MITI’s Successes and Failures in Controlling Japan’s Technology Imports, Hitotsubashi Journal of Commerce and Management, Hitotsubashi University, 29(1), 15-33, December.
• McCormack, G. (2001). Introduction Part. In D. Deneoon, M. Hudson, G. McCormark, & T. Morris-Suzuki, Multicultural Japan Palaeolithic to Postmodern (pp. 1-15). Cambridge: Cambridge University Press.
• Malcolm, Dewey & Rutherford, Reese (2008), “Institutionalism, Old”, The New Palgrave Dictionary of Economics, 2nd Edition, v. 4, pp. 374–81.
• Miyaoka, I. (2011). Japan’s dual security identity: A Non-Combat Military Role as an Enabler of Coexistence, International Studies, 48(3-4), 237-255.
• Morley, J. W. (1971). Dilemmas of Growth in Prewar Japan (ed.), Princeton, NJ: Princeton University Press.
• Morris-Suzuki, T. (2001). A Descent into the Past: The Frontier in the Construction. In D. Denoon, M. Hudson, G. McCormack, & T. Morris-Suzuki, Multicultural Japan Palaeolithic to Postmodern (pp. 81-94). Cambridge: Cambridge University Press.
• Nakabayashi, M. (2009). Institutions and Economic Development of Early Modern Japan. Institute of Social Science. Tokyo: The University of Tokyo.
• Nakamura, J. I. (1966). Meiji Land Reform, Redistribution of Income, and Saving from Agriculture. Economic Development and Cultural Change, 14(4), 428-439.
• Nakamura, N. (2015). Reconsidering the Japanese Industrial Revolution: Local Entrepreneurs in the Cotton Textile Industry during the Meiji Era. Social Science Japan Journal, 18(1), 23-44.
• Nakamura, Masao and Morck, Randall K. (2003). “Been There, Done that. The History of Corporate Ownership in Japan”. ECGI - Finance Working Paper, No. 20, Sauder School of Business Working Paper, Available at SSRN: https://ssrn.com/abstract=422120.
• Niizeki, T. (2015). Japan’s Economic Growth and the Role of Government. In: Yülek M. (eds) Economic Planning and Industrial Policy in the Globalizing Economy. Public Administration, Governance and Globalization, vol 13. Springer, Cham.
• North, D. C. (1990). Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press.
• North, D. C. (1991). Institutions. Journal of Economic Perspectives, 5(1), 97-112.
• Ohno, K. (2006). The Economic Development of Japan the Path Traveled by Japan as a Developing Country [Tojokoku Nippon no Ayumi: Edo kara Heisei madeno Keizai Hatten], GRIPS Development Forum.
• Okazaki, T. (2005). The Role of the Merchant Coalition in Pre-Modern Japanese Economic Development: An Historical Institutional Analysis. Explorations in Economic History, 42(2), 184–201.
• Paine, S. C. M. (2017). The Japanese Empire: Grand Strategy from the Meiji Restoration to the Pacific War. New York: Cambridge University Press.
• Pehlivantürk, B. & Demirtaş, B. (2018). Civilian Powers and Contemporary Global Challenges. Perceptions, 23(1), 1-7.
• Richardson, B. M. (1993). The Political Economy of Japan. Ohio State University.
• Reconstruction of Japan, Modern Japan in archives: political history from the opening of the country to post-war, National Diet Library, 2010, Retrieved from: https://www.ndl.go.jp/modern/e/cha5/index.html.
• Reischauer, E. O. (1989). Japan: The Story of a Nation, McGraw-Hill Humanities, ISBN: 0075570742.
• Reischauer, R. K. (1937). The Japanese Shōen (莊 園), or Manor: Some Useful Terminology. Journal of the American Oriental Society, 57(1), 78-83.
• Riad, A. (2020) Globalization, the Challenge of COVID-19 and Oil Price Uncertainty, Journal of Asia-Pacific Business, 21:2, 77-79.
• Ringmar, Erik (2019), History of International Relations: A Non-European Perspective, Open Book Publishers.
• Samuels, Warren J. ([1987] 2008), “Institutional Economics”, The New Palgrave: A Dictionary of Economics.
• Schiltz, M. (2012). Money on the Road to Empire. Japan’s Adoption of Gold Monometallism, 1873–971, The Economic History Review. 65(3), 1147-1168.
• Schomberg, W., & Takenaka, K. (2020). UK Secures Agreement with Japan on First Post-Brexit Trade Deal, Reuters, Sep. 16, 2020, Retrieved from: https://www.reuters.com/article/britain-japan-trade-idUSKBN26211B
• Schubert, T. (2020). Comparison of Shogun Japan and Medieval Europe, https://sites.google.com/site/thomassschubert/social (Accessed August 20, 2020)
• Shizume, M. (2009). The Japanese Economy during the Interwar Period: Instability in the Financial System and the Impact of the World Depression. Institute for Monetary and Economic Studies, 2009-E-2.
• Steele, A., Paik, C., & Tanaka, S (2017). Constraining the Samurai: Rebellion and Taxation in Early Modern Japan. International Studies Quarterly, 61(2). 352-370.
• Suzuki, A. (2000). The transformation of the vision of labor unionism: Internal union politics in the Japanese steel industry in the 1960s. Social Science Japan Journal, 3(1), 77-93.
• Tabellini, G. (2005). Culture and Institutions: Economic Development in the Regions of Europe. CESifo Working Paper, CESifo Group, Munich.
• Tanaka, H. (2010). Postal Reform and the Fiscal Investment and Loan Program: Toward Democratic Control of Government Finances (1). Retrieved February 5, 2016, from The Tokyo Foundation Developing Policy, Investing in People, Transforming Society. Retrieved from: http://www.tokyofoundation.org/en/articles/2010/postal-reform-and-the-fiscal-investment-and-loan-program-toward-democratic-control-of-government-finances-1
• Tarnoffi, C. (2018). The Marshall Plan: Design, Accomplishments, and Significance, Congressional Research Service 7-5700, January 18, Retrieved from: https://fas.org/sgp/crs/row/R45079.pdf (20.09.2020).
• The Japan Times. (2020) Japan’s Economy Shrank More Than Expected in the Second Quarter, Heightening Woes for New Leader. Retrieved from: https://www.japantimes.co.jp/news/2020/09/08/business/economy-business/economy-shrank-more-than-expected-second-quarter/.
• Trading Economics, Japan GDP Growth Rate 2021-2022 Forecast. https://tradingeconomics.com/japan/gdp-growth (Accessed Sep. 15, 2020)
• Tunçoku, A. M. (2013). Japanese Foreign Policy, Ankara: Nobel Publication.
• Uyar, A. & Taniguchi, M. (2013). Regional Science-Society Interface within Global Environmental and Social Change towards Sustainability. Japan Social Innovation Journal, 3(1)36 - 47, 2013.
• Yamada, M. (2021). How Can the Japanese Anomaly Be Explained? A review essay of Atul Kohli’s Imperialism and the Developing World - Atul Kohli, Imperialism and the Developing World: How Britain and the United States Shaped the Global Periphery, Oxford: Oxford University Press, 2020. Japanese Journal of Political Science, pp. 1-10. doi:10.1017/S1468109921000207
• Yukichi, F. (1860). English-Japanese Dictionary (増訂華英通語. 上) (快堂蔵板)
• Yukichi, F. (1866). Things Western (西洋事情. 初編. 一 Seiyo Jijo) (尚古堂), Retrieved from: http://dcollections.lib.keio.ac.jp/ja/fukuzawa/a02/3.
• Zaibatsu and Keiretsu. (n.d.). Retrieved 03 07, 2016, from Biglobe. Retrieved from: http://www7b.biglobe.ne.jp/~jbc/Presentation-Zaibatsu_&_Keiretsu.pdf
• Watkins, T. (n.d.). The Keiretsu of Japan. Retrieved 03 07, 2016, from San José State University: /faculty/watkins/keiretsu.htm
• Weede, E. (2004). Comparative economic development in China and Japan. Japanese Journal of Political Science, 5(1), 69-90.
• Wolferen, K. V. (1989). The Enigma of Japanese Power: People and Politics in a Stateless Nation, Ebook (A.A. Knopf).
• World Bank (2014). Learning from Megadisasters: Lessons from the Great East Japan Earthquake. Retrieved from: http://documents1.worldbank.org/curated/en/478711468038957554/pdf/Learning-from-Megadisasters-lessons-from-the-great-east-Japan-earthquake.pdf.