Abstract: Optimizing Effort: Institutions, Incentives, and Technology in Japan's Silk and Cotton Mills before the First World War

Janet Hunter


This paper analyzes the relative importance of labor management institutions in generating improvements in productivity and enhancing worker incentives in Japan's textile factories before the First World War. Scholarship has shown that much of the output growth around the turn of the century was extensive rather than intensive in nature. Productivity gains were significant, but advances in labor productivity were largely contingent on the increasing productivity of either capital or raw material. The paper suggests that the institutional set-up was not calculated to optimize worker effort, and may even have offered disincentives to increasing labor productivity. However, it also argues that the system was integral to technological and organizational innovation, and also permitted employers to reap the benefits of increases in output and productivity.