Until early 1960's, the Japanese government controlled import by means of foreign exchange allocation system. Rents generated and allocated by the foreign exchange allocation system provided the government with a powerful tool for industrial policy, although there also existed a possibility that...

In this paper we will make clear the institutional framework and function of the foreign exchange allocation system in 1950's Japan. Until trade liberalization progressed in the first half of 1960's, MITI executed de facto import quota by means of this system, which generated substantial amount...