Participatory Rural Development in 1930s Japan: The Economic Rehabilitation Movement

This paper studies an early participatory rural development program implemented during the 1930s in Japan. This program selected several villages each year to draft and implement their own original development plans. I discuss the implications of the features of the program on its effectiveness. A detailed baseline survey conducted by the villagers themselves helped them to objectively diagnose their economic situations and understand their issues. The plans defined clear numerical targets, allowing them to share goals and monitor progress. The implementation of the plan was reinforced by frequent communication and monitoring among neighbors and by an incentive scheme that involved competition within a village. I use a village-level panel dataset from the Hyogo prefecture to examine the effects, under the difference-in-differences strategy. I find suggestive evidence that the program helped foster the adoption of cattle raising and diversify agricultural production.Participatory development, Rural development program, Crop diversification, Great Depression, Japan

Impact of land readjustment project on farmland use and structural adjustment: The case of Niigata, Japan

This paper examines the impact of farmland readjustment projects on farmland use and structural adjustment in Niigata, Japan. We use census data of rural communities for 1990 and 2000 to conduct pooled regression, first-difference, difference-in-differences, and propensity score matching estimations. We find positive impact of farmland readjustment projects in alleviating farmland abandonment and in facilitating outsourcing of agricultural works and farmland rental. The results suggest that farmland consolidation may be an effective option to resolve farmland fragmentation and to promote structural adjustment in concentrating farmland to efficient farmers which is a premise for strengthening the agricultural sector under economies of scale.land readjustment, consolidation, fragmentation, farmland rental, farmland abandonment, Japan, Land Economics/Use,

The impact of farmland readjustment and consolidation on structural adjustment: The case of Niigata, Japan

Improving agricultural productivity is a pressing challenge for rapidly growing economies. Farmland concentration among core famers is instrumental for reaping the economies of scale. However, farmland fragmentation often serves as a barrier to such structural adjustments. This paper studies Farmland Improvement Projects in Japan, which physically mitigate farmland fragmentation by merging and enlarging small plots and consolidating land parcels among farmers. I employ community-level panel data to make use of difference-in-differences matching estimators, in order to measure the projects’ impacts. I find positive effects of the projects on structural adjustment, in the form of machinery-work outsourcing.farmland improvement project, farmland concentration, farmland fragmentation, structural adjustment, Japan

"Risk, Transaction Costs, and Geographic Distribution of Share Tenancy: A Case of Pre-War Japan"

This paper investigates determinants of geographic distribution of share tenancy and analyzes its efficiency implications in pre-war Iwate prefecture, Japan. The distribution of share tenancy was attributable to risk represented by yield variability, which in turn was affected by seasonal winds called Yamase and topographic features. That risk raised transaction costs of adopting a fixed-rent tenancy associated with the common custom of rent reduction in Japan that mitigated the problem of risksharing. Estimation results suggest that risk, wealth, and strength of community ties were the main determinants of contract choice.

"Agrarian Land Tenancy in Prewar Japan: Contract Choice and Implications on Productivity"

This paper studies the determinants of agrarian tenancy contract choice and its implication on productivity in prewar Japan. Rapid agricultural growth under extensive tenancy relationships in prewar Japan was achieved with the prevalence of a unique rent reduction contract, which was more efficient than a share tenancy or a pure fixed-rent contract in terms of provision of incentives and risk-sharing. Despite its potential efficiency, a rent reduction contract incurred substantial transaction costs, which may have inhibited its adoption outside Japan. The prevalence of this contract in prewar Japan was likely due to the presence of villages that reduced such costs through informal governance of the private tenancy relationships. We found quantitatively at the village level that the choice of tenancy contract in prewar Iwate prefecture was affected by risk and possibly transaction costs. Furthermore, a sign of Marshallian inefficiency was found at the prefecture level, where the prevalence of tenancy and productivity is negatively correlated and such inefficiency was worse in prefectures with a greater proportion of share tenancy.

Agglomeration or Selection? The Case of the Japanese Silk-Reeling Clusters, 1908-1915

We examine two sources of productivity improvement in the specialized industrial clusters of the early twentieth century Japanese silk-reeling industry. Agglomeration improves the productivity of each plant through positive externalities, shifting plant-level productivity distribution to the right. Selection expels less productive plants through competition, truncating distribution on the left. We find no evidence confirming a right shift in the distribution in clusters or that agglomeration promotes faster productivity growth. Rather, the distribution in clusters was severely left truncated, even for younger plants. These findings imply that the plant-selection effect was the source of higher productivity in the Japanese silk-reeling clusters.Economic geography, Heterogenous firms, Industrial clusters, Productivity

Risk, Transaction Costs, and Geographic Distribution of Share Tenancy: A Case of Pre-War Japan

This paper investigates determinants of geographic distribution of share tenancy and analyzes its efficiency implications in pre-war Iwate prefecture, Japan. The distribution of share tenancy was attributable to risk represented by yield variability, which in turn was affected by seasonal winds called Yamase and topographic features. That risk raised transaction costs of adopting a fixed-rent tenancy associated with the common custom of rent reduction in Japan that mitigated the problem of risksharing. Estimation results suggest that risk, wealth, and strength of community ties were the main determinants of contract choice.

Productivity Improvement in the Specialized Industrial Clusters: The Case of the Japanese Silk-Reeling Industry

We examine two sources of productivity improvement in the specialized industrial clusters. Agglomeration improves the roductivity of each plant through positive externalities, shifting plant-level productivity distribution to the right. Selection expels less productive plants through competition, truncating distribution on the left. By analyzing the data of the early twentieth century Japanese silk-reeling industry, we find no evidence confirming a right shift in the distribution in clusters or that gglomeration promotes faster productivity growth. These findings imply that the plant-selection effect was the source of higher productivity in the Japanese silk-reeling clusters.Economic geography, Heterogeneous firms, Selection, Productivity

Productivity Improvement in the Specialized Industrial Clusters: The Case of the Japanese Silk-Reeling Industry

We examine two sources of productivity improvement in the specialized industrial clusters. Agglomeration improves the productivity of each plant through positive externalities, shifting plant-level productivity distribution to the right. Selection expels less productive plants through competition, truncating distribution on the left. By analyzing the data of the early twentieth century Japanese silk-reeling industry, we find no evidence confirming a right shift in the distribution in clusters or that agglomeration promotes faster productivity growth. These findings imply that the plant-selection effect was the source of higher productivity in the Japanese silk-reeling clusters.Economic geography, Heterogeneous firms, Selection, Productivity

Did Japanese direct investment in Korea suppress indigenous industrialization in the 1930s? : evidence from country-level factory entry patterns

Foreign direct investment (FDI) can deliver both positive and negative spillovers to the local economy. Negative effects such as crowding-out or entry-barrier effects might outweigh the positive ones when the technological gap between foreign and local firms is significant. This paper examines the impact of Japanese direct investment into Korea under colonization in the 1930s on the entry of Korean-owned factories. By using the census of manufacturing factories in Korea, we exploit variations in the share of Japanese factories and their entry rates across counties within the same subsectors. We find that within a subsector, entry rates of Korean factories were higher in counties with higher presence and entry of Japanese factories. Positive correlations are also found between subsectors. The results imply that Japanese direct investment did not suppress the entry of Korean factories and that FDI could exert positive entry spillovers on indigenous firms, even at a very early stage of industrialization