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Abstract:
How are broad coalitions in favor of beneficial reforms and policies built across groups with different, often conflicting, initial interests? We examine how innovations in finance provide a means to accomplish sustainable reform and help solve this political economy problem. We examine this in the context of Japan’s Meiji Restoration, which ended feudal rule and led to widespread adoption of a reformist agenda of Emperor Meiji, including the “importation” of foreign ideas & sustained growth. We show how samurai violence ended with the implementation of these technocratic solutions and that local communities, which might have otherwise withered, experienced growth as a result of these financial innovations.
