Building on the concept of framing, this study analyzes the use of budgets by the Extraordinary Defense Corps, a unit of the Japanese Imperial Navy deployed to govern Micronesia during and immediately after World War I. A comparison of the use of budgets by the Defense Corps and the South Seas Agency, the civil authority that succeeded the Defense Corps as the territory’s governing body in 1922 pursuant to the granting of the South Pacific Mandate to Japan, reveals that the idiosyncratic budgetary practices of the Defense Corps were profoundly influenced by the institutional context in which the organization operated. In contrast to the practice of the South Seas Agency, budgeting under the Defense Corps was highly flexible, with little concern for spending limits. The primacy of promoting infrastructure formation and industrial development within the territory, as represented by sugar production, is apparent. As this study confirms, the flexible budgeting practiced by the Defense Corps provided an essential socio-economic institutional foundation for the subsequent governance of the South Seas Agency.