Hedonic prices and multidimensional incentives

Human tasks are often multidimensional. Holmstrom and Milgrom (1991) concluded that ghigh-poweredh incentives cannot work unless all dimensions of these tasks are observable in the firm. However, as this study shows, if the firm can observe the price vector of its products in the market, distinguish each dimension of the price vector, and connect the information with signals from workers in the firm, then the use of multidimensional ghigh-poweredh incentives becomes feasible. Product differentiation with committed quality satisfies those conditions, which has been practiced by the Japanese, but not by the Western, manufacturing for a century.multidimensional incentives, multitask incentives, high-powered incentives, hedonic prices, Japanese manufacturing.

Flexibility and diversity: the putting-out system in the silk fablic industry of Kiryu, Japan

We have seen many cases where the factory system emerges and realizes higher productivity in the process of industrialization. However, also seen in history is that other types of production organization have kept expanding and have reached at some high performance. For instance, the putting-out system rather than the factory system has sometimes been chosen in the fabric industry, where the flexibility of production and the variety of products are especially important to respond to the fashion. This type of production organization has prospered even during the industrialization since the 19th century, supported by the development of some modern technologies such as synthetic dyes. This study inquires a case of the silk fabric industry in Kiryu, Gunma Prefecture, Japan. In Kiryu, the traditional silk textile industry developed in the Tokugawa era, and the industry even grew more under the putting-out system during the industrialization in Japan since the late 19th century, because the putting-out system with synthetic dying was the optimal combination to realize the variety of products required in the mass consumption in the industrial society.multitask Governance of trades, Putting-out system, Industrial district, Japanese textile industry, Repeated game.

Schooling, employer learning, and internal labor market effect: Wage dynamics and human capital investment in the Japanese steel industry, 1930-1960s

Employer learning model predicts the impact of schooling, an observable signal, on wages decreases with accumulation of experience. Workers, however, have incentives to invest in general human capital both at schools and workplaces such that experience and schooling are complements unless the current employer commits to long-term employment. Microanalysis of Japanese steel industry indeed shows that experience before employed by the firm is complementary to schooling and the complementarity effect dominates employer learning effect while wage growth after employed is consistent with learning hypothesis. It suggests that previous evidences of employer learning might contain internal labor market effect.employer learning, schooling and wages, internal labor market effect

Speed of the price and efficiency of the concession the treaty port market in Japanfs industrialization

Even after modern economic growth began in the Western world, the international market, which consists of a number of national and regional markets, has been more or less inefficient with respect to information. To calm this inefficiency, economic institutions have taken important roles. In addition, players in a society whose institutions are superior have earned information rent in the international market. The treaty port in Japan that was imposed by Western powers worked as such an efficient institution, and a Japanese export industry took advantage of it at the beginning of Japanfs industrialization. This designed market provided useful information with the export industry in the inland, as, say, stock markets do with various industries in modern economic societies.institutions, efficient market, exchange rate and prices, treaty port, development.

Rise of the Japanese fiscal state

A sustainable fiscal state needs to have two critical factors: A stable tax base and access to an efficient bond market. The Tokugawa Shogunate had a stable land tax revenue, which was inherited to modern Japan after the Meiji restoration. Taxation, however, was restricted by the constitution after the Meiji restoration. The parliament opposed to expansionary policy in the early 1890s, and then it turned to support that at the exchange of governmental commitment to investment in social infrastructure. The government committed to investment to increase productivity, and was allowed to raise tax rate. About the bond market, at the other hand, the government had issued bonds only in the domestic market until the mid 1890s. In the late 1890s, after Japan joined the international gold standard, the government began to issue considerable amount of bonds, and the balance surged during the Russo-Japanese war in 1904-1905. Now the London market efficiently financed Japanese government. In the early 20th century, the government was one and only one player that had established its own reputation in the international financial market. Hence balance of Japanese government bonds was the only route to import capital. This route also provided Japanese economy with macroeconomic stability, offsetting short-term current account deficit by import of capital. Japan had finally been equipped with necessary instruments as a stable and sustainable fiscal state.Fiscal state, government bonds, macroeconomic stability

Peasant economy in the edebate on Japanese capitalismf: Tenancy contract facing the eTurning pointf

Japanese economy was losing its stability in the interwar period. Faced with the challenge, Moritaro Yamada gave an understanding that the stability of Japanese political economy before the First World War had been maintained by paternalistic institutions both of agricultural and industrial sectors, not based on thoroughly modern market mechanism. This then influential observation can still be supported by the classical dual economy model. However, as a scholar in the period of institutional change, Yamada failed to rightly predict the direction of change. While Yamada expected the change should lead to impersonal market mechanism, the real history showed people rather built a planned economy during the war and recovered stability. Yamadafs mistake was mainly in that he underestimated the significance of risk sharing in the paternalist organizations. At the gturning pointh where labor changed into scarce resource from surplus resource, two vectors with opposite directions could exist. Riskier opportunities for higher wages would encourage people to accept market mechanism based on impersonal exchange. Dissolution of risk sharing in paternalistic organizations would make people call for the sate taking on the role as a large welfare state. In Japan, especially in the middle of the Great Depression, the latter factor became dominant.Peasant economy, tenancy contract, risk sharing, institutional change.

"The Role of the Courts in Economic Development: The Case of Prewar Japan"

In this paper, we explore the role of the legal system in economic development, focusing on its relationship to the role of private mechanisms in contract enforcement. We use long-term prefecture-level panel data that cover the early stages of industrialization and urbanization in Japan. We found that industrialization increased the demand for civil lawsuits, but that this was conditional on urbanization. In other words, increased demand for civil suits occurred only where industrialization and urbanization simultaneously progressed. At the same time, the inefficiency of the legal system impeded industrial growth, but only conditional on urbanization. That is, the inefficiency of the legal system impeded industrialization only in urban areas. These findings suggest that community-based contract enforcement mechanisms worked in rural areas and that these mechanisms were replaced by the formal legal system as urbanization progressed and community ties declined.

The Role of the Courts in Economic Development: The Case of Prewar Japan

In this paper, we explore the role of the legal system in economic development, focusing on its relationship to the role of private mechanisms in contract enforcement. We use long-term prefecture-level panel data that cover the early stages of industrialization and urbanization in Japan. We found that industrialization increased the demand for civil lawsuits, but that this was conditional on　urbanization. In other words, increased demand for civil suits occurred only where industrialization and urbanization simultaneously progressed. At the same time, the inefficiency of the legal system impeded industrial growth, but only conditional on urbanization. That is, the inefficiency of the legal system impeded industrialization only in urban areas. These findings suggest that community-based contract enforcement mechanisms worked in rural areas and that these mechanisms were replaced by the formal legal system as urbanization progressed and community ties declined.Court, Law, Contract Enforcement, Economic Development, Japan