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19/07/2004 - Regulatory reform is already well underway in Japan but should be continued and strengthened if Japan is to reap all the opportunities of its current recovery, according to a new OECD report.
Japan: Progress in Implementing Regulatory Reform, reviewing changes that have taken place since 1999 when the OECD published its first review of regulatory reform in Japan, says strong political leadership and a pragmatic step-by-step approach have laid a solid foundation for further necessary changes. Barriers to market entry have been eased for both domestic and foreign companies, and both the Fair Trade Commission (FTC) responsible for competition policy and the private-sector advisory Council for Promotion of Regulatory Reform have been strengthened.
But further measures are needed to encourage inward investment and further strengthen competition. Carrying out such initiatives now will make it easier for Japan to tackle problems linked to the high level of public debts and a rapidly ageing population.
The OECD report cites Japan’s Special Zones programme launched in 2002 as a positive initiative that has helped to stimulate growth in local economies by allowing local governments to ease regulations. Among other examples, it cites projects in which municipalities have been able to hire foreign English-language teachers for local schools and put private companies in charge of health-care institutions.
Looking ahead, the OECD advises Japan to:
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Speed up the national roll-out of deregulatory measures that are successfully introduced on a local level via the Special Zones programme.
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Strengthen the laws and institutions protecting consumers.
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Fully eliminate unnecessary controls on market entry for companies.
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Cut red tape and compliance burdens affecting businesses.
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Ensure a coherent and systematic assessment of new regulatory proposal through Regulatory Impact Analysis (RIA).
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Make competition-law enforcement more effective, with tougher penalties for abusers.
Deregulate energy, telecoms, transportation and the postal services in order to bring down prices.
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Open up government procurement contracts to foreign companies through simpler and more transparent application processes.
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Promote public understanding of the benefits of regulatory reform and enhance commitment to reform at all levels of government.
Japan is one of a number of OECD countries to have requested a broad review by the OECD of its regulatory practices and reforms. The report presents an overall picture, within a macroeconomic context, of regulatory achievements and challenges including the quality of regulation, competition policy and market openness.
Japan: Progress in Implementing Regulatory Reform is available to journalists on the password protected web site. For further information, journalists are invited to contact Spencer Wilson, OECD's Media Relations Division (tel. [33] 1 45 24 81 18), Rolf Alter, OECD Regulatory Reform Programme (tel. [33] 1 45 24 14 10) or Josef Konvitz , OECD's Regulatory Management and Reform Division (tel. [33] 1 45 24 97 47).
Subscribers and readers at subscribing institutions can access the study via SourceOECD our online library. Non-subscribers will be able to purchase the study via our Online Bookshop.
For further information on Regulatory Reform in Japan
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