2017 Volume 50 Issue 3 Pages 57-72
This paper examines the issue of information asymmetry that occurs due to the separation of the National Police Agency and the Prefectural Police in Japan from the perspective of incentives. The analysis indicates that when police bureaucrats were put in charge of the Prefectural Police, they assumed authority over personnel and the problem of asymmetry of personnel information became less evident. In contrast, when the National Police Agency appointed someone who had quickly advanced to the ranks of the Prefectural Police to be in charge of personnel, people were instead incentivized by the possibility of future promotion. Thereby, the National Police Agency indirectly created a system of management control in the Prefectural Police.