Abstract
Starting with the assumption that institutions play an important role in economic development, this paper aims to analyze the institutional structures in the Yokohama foreign settlement. The true economic meaning of the 'Rengou-Kiito-Niazukarisho' incident, an important topic in economic history, is clarified through this analysis. As exports increased, the quality of raw silk exports from Japan declined. The cause of this was unfair and dishonest transactions. To deal with the problem, foreign mercantile houses established a 'private chop' and an inspection system known as 'haiken'. However, the foreign mercantile houses often carried out their inspection in an arbitrary manner. As a judiciary system had not yet been established, the Japanese raw silk merchants dealt with the situation by forming a trade organization. In addition, 'Kiito-aratamekaisha' and 'Rengou-kiito-Niazukarisho' were established aiming to replace foreign mercantile houses as the primary institutions controlling the inspection and selection of raw silk. The 'Rengou-Kiito-Niazukarisho' incident was essentially a dispute over the premiums earned from the inspection and selection of raw silk.
