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Stabilize the Peasant Economy: Governance of Foreclosure by the Shogunate

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Regulation of foreclosure in a financial crisis has been centuries long, often politicized conundrum to authorities. Japan in the fifteenth and sixteenth centuries had free financial, land and coercive labor markets. They were complementary institutions of the Japan's first age of the laissez-faire financial capitalism. It raised the growth but resulted in recurrent financial crises. Therefore, the Edo (Tokugawa) shogunate, 1600--1868, banded coercive labor, protected peasants' property right and regulated the farmland-collateral loans. The key was an optimal degree of regulation. The shogunate first banned foreclosure and invited a credit shrink. In the first half of the eighteenth century, the shogunate introduced legislation to legalize foreclosure of pledged farmland as clarifying the rights of borrowers. The regulation asymmetrically lowered interest rates for timely repayment.

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  • Mandai, Yu, and Nakabayashi, Masaki, 2017. "Stabilize the Peasant Economy: Governance of Foreclosure by the Shogunate," ISS Discussion Paper Series (series F) f187, Institute of Social Science, The University of Tokyo, revised 28 Nov 2017.
    • Handle: RePEc:itk:issdps:f187
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    1. Yutaka Arimoto & Yoshihiro Sakane, 2021. "Agricultural development in industrialising Japan, 1880–1940," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 61(3), pages 290-317, November.
    2. Nakabayashi, Masaki, 2019. "From family security to the welfare state: Path dependency of social security on the difference in legal origins," Economic Modelling, Elsevier, vol. 82(C), pages 280-293.

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    More about this item

    Keywords

    farmland-collateral loans; farmland foreclosure; free labor; peasant ownership; early modern Japan;
    All these keywords.

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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