‘Voice’ and ‘exit’ in Japanese firms during the Second World War: Sanpo revisited*

During the Second World War, the Japanese government and private sector searched for and implemented new mechanisms for coordination and motivation. One of these was sangyo hokokukai (sanpo). The Sanpo unit was basically an organization of the employer and employees of each firm, which held meetings to moderate labour relations. As a result of government policy to promote sanpo units, around 70 per cent of the total workers in Japan were organized into sanpo units in the early 1940s. As the members of trades unions and the workers of the companies that had factory committees were only 7 per cent and 5 per cent of the total workers in 1936 respectively, sanpo was the first large-scale mechanism for Japanese employees to have a voice. This article examines the role of sanpo, using prefecture-level and firm-level data, based on a framework integrating the ‘voice view’ of unionism and transaction cost economics. It was found that sanpo reduced the participation rate in labour disputes, and enhanced labour productivity at least for some of the time.