The institutional aspects of the Dojima rice exchange market in Tokugawa era: The role of governance mechanism

This paper examines the institutional aspects of the Dojima rice exchange market. Especially, the role of governance mechanism was focused on. It is well known that the Dojima rice exchange market was established in 1730 in Osaka, and closed in 1869 due to the collapse of Tokugawa Shogunate. In addition, it had already been shown that there existed the institution of trades in Dojima. However, the most signifficant question: How did it evolve, and how did it assure the "safe" and "smooth" trades, remains to be unanswered. To answer the question, this paper focuses on three points; that is i) property right, ii) freedom of contracts, iii) liquidity of the market. Through the empirical analyses, it was shown that the futures trades in Dojima rice exchange maket had been evolved, exactly for the purpose of satisfying these three points.