Transformation of the Institutional Political Economy of Japan: From Rice Field Property Reform to the Zaibatsu

Abstract

This article examines the evolution of the institutional political economy of Japan from feudal to modern times and conceptualizes the origins of the Zaibatsu (financial clique of Japan) heritage, which has been around for centuries. The historical events were considered based on their impact on economic transformation while the methodology is based on the theoretical framework of institutional economics. In this way, the Japanese economy has been examined from a variety of angles within the contexts of the Edo Period, Meiji Reforms, and World Wars. We assert that there is a historical continuity between the rice field property reforms of the Edo Period and the success of the zaibatsu. The linkages between the state, business, and labor illuminate the economic evolution of Japan, which is clearly stated throughout the research with regard to the material and nonmaterial components. As a result, while distinguishing itself from the enormous and present literature on the Japanese economy, this study stresses rice field reforms and their continued repercussions on the main institutions of Japan’s economic miracle.