ISSN 1936-5349 (print) ISSN 1936-5357 (online) HARVARD JOHN M. OLIN CENTER FOR LAW, ECONOMICS, AND BUSINESS OUTCASTE POLITICS AND ORGANIZED CRIME IN JAPAN: THE EFFECT OF TERMINATING ETHNIC SUBSIDIES J. Mark Ramseyer Eric B. Rasmusen Forthcoming in Journal of Empirical Legal Studies Discussion Paper No. 932 09/2017 Harvard Law School Cambridge, MA 02138 This paper can be downloaded without charge from: The Harvard John M. Olin Discussion Paper Series: http://www.law.harvard.edu/programs/olin_center The Social Science Research Network Electronic Paper Collection: http://ssrn.com/abstract=3033266 Forthcoming Journal of Empirical Legal Studies JEL Numbers: H30, I26, I38, J49, K14, K38, K42 July 5, 2017 Address correspondence to: J. Mark Ramseyer Harvard Law School
[email protected] Eric B. Rasmusen Indiana University Kelley School of Business
[email protected] Outcaste Politics and Organized Crime in Japan: The Effect of Terminating Ethnic Subsidies * By J. Mark Ramseyer and Eric B. Rasmusen** Abstract: In 1969, Japan launched a massive subsidy program for the "burakumin" outcastes. The subsidies attracted the mob, and the higher incomes now available through organized crime compensated those burakumin who abandoned the legal sector for criminal careers. In the process, the subsidies gave new support to the tendency many Japanese already had to equate the burakumin with the mob. The government ended the subsidies in 2002. We explore the effect of the termination by merging 30 years of municipality data with a long-suppressed 1936 census of burakumin neighborhoods. First, we find that outmigration from municipalities with more burakumin increased after the end of the program.