This project evaluates industrial policies by MITI and METI quantitatively, integrating economic analysis and historical study. First, we analyze policy-based finance for small sized firms. Specifically, we focus on the Program for Management Improvement of Small-Sized Firms (Marukei Yushi), which dates back to 1973. According to this program, Japan Finance People's Finance Corporation (present Japan Finance Corporation) provided low interest rate loans to the small-sized firms that were advised and recommended by regional chambers of commerce. As this program is for small-sized firms, which are supposed to be under strict credit constraints, it is possible that this program improves management and promotes growth of small firms by mitigating the constraints. We test this possibility using micro-data on this program. Second, we examine the regional development policy in the 1960s. The Comprehensive National Development Plan (Zenkoku Sogo Kaihatsu Keikaku) in 1962 and the two laws based on it, namely, the NEW Industrial Cities Development Promotion Law (Shin Sangyo Toshi Kensetsu Sokushin Ho, 1962) and the Special Industrial Areas Development Promotion Law (Kogyo Seibi Tokubetsu Chiiki Seibi Sokushin Ho, 1964), were a large-scale policy endeavor to change the spatial distribution of industries. As there were extensive inputs from local governments and politicians in policymaking, this series of policies are interesting not only in the context of the industrial policy research but also in the context of spatial economics, economic history, and political economy. In this project, we evaluate them using the relevant statistical data and historical information.
October 9, 2018 - September 30, 2020