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Stabilize the peasant economy: Governance of foreclosure by the shogunate

Yu Mandai and Masaki Nakabayashi ()

Journal of Policy Modeling, 2018, vol. 40, issue 2, 305-327

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.

Keywords: Farmland-collateral loans; Farmland foreclosure; Free labor; Peasant ownership; Early modern Japan (search for similar items in EconPapers)
JEL-codes: O12 G18 K11 K12 Q15 (search for similar items in EconPapers)
Date: 2018
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