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Stabilize the peasant economy: Governance of foreclosure by the shogunate

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  • Mandai, Yu
  • Nakabayashi, Masaki

Abstract

Regulation of foreclosure in a financial crisis has been a centuries-long conundrum to authorities. Japan in the fifteenth and sixteenth centuries had free financial, land and coercive labor markets. It raised the growth but resulted in recurrent financial crises. Therefore, the Edo shogunate, 1600–1868, banned coercive labor, protected peasants’ property right and regulated the farmland-collateral loans. Seeking an appropriate degree of regulation, the shogunate first banned foreclosure and invited a credit shrink. Then 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.

Suggested Citation

  • Mandai, Yu & Nakabayashi, Masaki, 2018. "Stabilize the peasant economy: Governance of foreclosure by the shogunate," Journal of Policy Modeling, Elsevier, vol. 40(2), pages 305-327.
  • Handle: RePEc:eee:jpolmo:v:40:y:2018:i:2:p:305-327
    DOI: 10.1016/j.jpolmod.2018.01.007
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    More about this item

    Keywords

    Farmland-collateral loans; Farmland foreclosure; Free labor; Peasant ownership; Early modern Japan;

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • 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
    • 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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