Economic development is a major concern to the majority of countries in the world today as they strive to catch up to the industrial West. Japan has been the most successful non-Western country in building an economy which qualifies it as developed. Most studies of economic development in Japan focus on macro-level issues, particularly on analysis of the role government played in the development process. It is generally recognized that Japan's central government played a major role in fostering industrial development. It is unfortunate that this fairly centralized political structure has somewhat obscured the role that local government may have had in helping local economies grow. In a sense, these local development efforts were at least as important as what was going on at the national level, because if peripheral areas had not developed at all, they would have become a liability for the central government and the core areas. This study examines one particular aspect of the development process in Japan; specifically, local government's role in fostering economic development throughout the Meiji (1868-1912) and Taisho (1912-1926) eras. The silk industry in Shimane prefecture provides the context of the case study approach used. The analysis focuses on two key issues: the mechanisms used by local government and the impact of growth on the local silk industry and on the standard of living.