The economic costs of sleaze or how replacing samurai with bureaucrats boosted regional growth in Meiji Japan Articles uri icon

publication date

  • May 2014

start page

  • 201

end page

  • 239


  • 2


  • 8

International Standard Serial Number (ISSN)

  • 1863-2505

Electronic International Standard Serial Number (EISSN)

  • 1863-2513


  • The notion that professional, efficient and non-corrupt bureaucracies
    foster economic growth is virtually uncontested. In spite of this wide consensus,
    central questions remain unanswered. Thus, while the harmful effects of dysfunctional administrations are extensively covered in the theoretical literature, little is
    known about the empirical relevance and the expected costs of insufficient
    administrative rationalization. And while efficient bureaucracies are considered a
    key ingredient to institutional performance, the existing research rarely investigates
    how desirable administrative structures have been implemented in history or which
    concrete policy measures constitute feasible reform strategies for present-day
    development countries. The present paper therefore aims at providing empirical
    evidence to dose this lacuna; to do so, it relies on the case of administrative reforms
    in the last three decades of the nineteenth century in Meiji Japan. Building on an
    exceptionally detailed set of official statistics and documentary sources, it constructs
    a panel of 45 Japanese prefectures and assesses the impact of heterogeneous reform
    implementation on canonical indicators of economic performance including measures of regional GDP, business activity and financial market development. The
    central results of the econometric analysis are that delayed administrative rationalization came along with a statistically significant and robust penalty on all
    development indicators. Moreover, this effect was remarkably persistent over time,
    as the data show that late-reforming prefectures performed systematically worse
    than the administrative forerunners until well into the twentieth century.


  • Economics


  • meiji japan; administrative reform; economic development