Poaching, Courts, and Settlements:Complementarity of Governance in Labor Markets

Transition between private governance mechanism and the state court is not necessarily unidirectional. This research assumes that non-monotonic changes in governance mechanism comes from complementarity between the private and public mechanisms when neither of both is sufficiently efficient. Then it studies transition of governance in the labor market of Japanese silk-reeling industry from the 1890s to the 1920s, which rapidly grew then and often showed poaching, and ascertains that employers first had recourse to the court for enforcement of employment contract, they second built private mechanisms for settlement backed by the court, and third abandoned the private mechanism.