TH3-25 Horie

Management and Reform of Regulatory Administration in JapanAbstractRegulation is a most basic function and tool of government and a large number of people are engaged in regulatory activities. For this reason, regulations and regulatory administration has been an important subject of administrative reform in Japan.

This paper reviews regulatory administration and reform efforts in Japan in the last three decades. After reviewing how public regulation is understood in Japan, objectives, targets and contents of regulatory reform, methods and process of regulatory reform and current systems of regulatory reform management are discussed. Then, the regulatory reform activities of the current government, which came into power for the first time in 2009, is also discussed.

Based on the review, decision making by consensus, gradualism and other features characteristic to reform in Japan are pointed out and the necessity of change of mind-set is emphasized.IntroductionRegulation is a most important function and tool of government. Regulatory activities of government have been regarded essential to maintain social order, to ensure safety and health of the people, to promote well-ordered social and economic activities for the development of the society and welfare of the people of the country and global community. A large number of people are engaged in regulatory activities of government both at the national and local levels. Many people in the private sector are also engaged in activities related to government regulations.

Effects of government regulations are so profound that effectiveness of regulations and efficiency of regulatory administration is continuously discussed and has always been an important subject of government and administrative reform in Japan.

This paper discusses the management and reform of regulatory administration in Japan. First, regulations and regulatory systems in Japan are discussed. Then, regulatory reform in Japan is discussed. Regulatory reform includes reforms of regulation, regulatory system and regulatory administration. Objectives, target areas, contents, and method and process of regulatory reform are discussed. Based on the analysis of history of regulatory reform, features characteristic to the regulatory reform in Japan is discussed. In the final part of the paper, regulatory reform activities of the new coalition government, which came into power for the first time in September 2009, are discussed.

1. Public Regulation in Japan(1) How is public regulation defined in Japan?The subject of this paper is regulation by the government. Since there are also regulations or rules made by private individuals and organizations, regulations by government or authorized public organizations are called here as public regulations.

There is no established definition of public regulation explicitly set forth in law in Japan. But there is the widely accepted common understanding of public regulation. In the government document, for example, it is said that regulation is an intervention of national or local government to the activities of private enterprises or individuals in order to realize specific policy objectives. Typical regulation is permission, authorization, licensing, and so on. In relation to such regulations, there are various kinds of requirements such as reporting to government office from an enterprise or an individual. They are also regarded as regulations. There is also a government activity which is referred to as "administrative guidance" of regulatory nature. Common to all these forms of regulation is to limit the right of an individuals or enterprise or to obligate an individual or enterprise to do certain things.

(2) Classification of public regulationRegulations can be classified in several ways. The following classifications are useful in considering regulatory system and regulatory reform. (1) Classification by the basis of regulatory authorityBoth the national and local government can make regulations. There are regulations introduced by laws, cabinet ordinances, ministerial rules and other actions of the national government. There are also regulations introduced by bye Taws and other rules or actions of the local government. This classification relates who is responsible for regulatory administration and regulatory reform.

(2)Classification by the way of regulationThere are direct regulations by law without an intermediary administrative disposition. There are also regulations through administrative dispositions such as permission, licensing and so on. Most of regulations belong to the latter category. The effectiveness of such regulations depends on how they are implemented.

(3)Classification by the strength of regulationRegulations can be classified by the strength of regulation such as strong regulation and weak regulation. Strong regulation includes permission, authorization, licensing, approval and so on. Monopoly by government enterprise is the strongest regulation of economic activities, since no private enterprise is allowed to come into the scene. Weak regulation includes reporting, submission of documents and so on. Regulatory effect of such regulations may be weak. But weak regulation may assign heavy burden on enterprises. There are regulations between the strong regulations and weak regulations. They are called intermediary regulations and include certification, examination and inspection of goods and services. In an effort of deregulation, abolition of strong regulation or transforming strong regulation to weaker regulation is emphasized. But the lessening the burden of regulation on enterprises and individuals is regarded also important.

(4) Classification by the nature of regulationRegulations are often classified into economic regulations and social regulations. This is the classification most common and referred to in regulatory reform. Typical economic regulations are regulations concerning the entry into certain industry or business, regulation concerning the price of goods and services, regulations concerning equipments and so on. Social regulations are regulations concerning public health, safety, welfare, well-being and so on. Although the distinction is artificial and often ambiguous, it is widely accepted in Japan as a meaningful classification in an effort for deregulation and regulatory reform.

(3) Glimpse of the state of regulations of the national government in JapanThe Ministry of Internal Affairs and Communications conducts a periodic survey of the number of regulations by the national government. The ministry checks the texts of all effective laws, cabinet ordinances, ministerial rules and others and counts the number of all the regulations by the national government ministries and agencies. Not only strong regulations such as licensing but also intermediary regulations such as certification and weak regulations such as reporting are counted.

According to the result of survey of the year of 2009, the group of weak regulations is the largest in number (about half of all), followed by the group of strong regulations which is about one third of all in number. The general trend is that the ratio of the group of strong regulations is decreasing and the ratio of the group of weak regulations is increasing. About 70 per cent of all regulations are introduced by laws and a little bit more than 20 per cent are introduced by ministerial rules and orders. Ministries and agencies with especially large number of regulations are the Ministry of Land, Infrastructure and Transport, the Ministry of Economy, Trade and Industry, the Ministry of Health, Labour and Welfare and the Financial Services Agency. Except for the Financial Services Agency, they are giant ministries with wide range of responsibilities for economies and specific industries and for social and welfare services. As far as the number of regulations is concerned, there are many economic and social regulations in Japan

2. Management of Regulatory Administration in Japan(l) National government establishes regulatory systems in most fieldsBoth the national and local governments share the responsibility for regulatory administration in Japan. The local governments in Japan are composed of two levels! 47 prefectural governments and about 1730 municipal governments (cities, towns and villages). By the constitution these local public entities have the right to manage their property, affairs and administration and to enact their own regulations within law. However, since the national government has wide-ranging responsibilities in almost all fields of public administration and establishes detailed regulatory systems by laws, what local governments can decide by their own bye-laws is limited.

(2)Implementation is mostly delegated or commissioned to local governmentsExcept for the cases where the national government ministry has its own local offices to implement or enforce its regulations, the implementation of most of regulatory systems introduced by the national government are delegated or commissioned to local governments. Workload of regulatory administration at local government is very much but the latitude or discretion is very limited because local governments are under the rules and supervision or direction of the national government and are expected to follow its guidance as well. Regulatory affairs which affect the wider area than local government jurisdiction are usually dealt with by the national government local office or its central office in Tokyo.

(3)Implementation is often commissioned to third-party organizationsAuthorized by a specific legislation, the national government often commissions its regulatory functions to third-party government-affiliated organizations or non-profit organizations. The utilization of third party organizations has been justified to keep government organization and work force small and to use abilities outside of government. As to the third party government, the management, accountability and legitimacy challenges are discussed in the USA. But in Japan, third party organizations are more often criticized because many of them have former government officials as their senior executives. The new DPJ (Democratic Party of Japan) Government doubts the efficiency of the third-party government organizations because it says that they have former government officials and are doing unnecessary or wasteful works.

(4)Reform of management of regulatory administrationRegulatory administration in Japan has been managed under the system with the national government having wide-ranging responsibilities in almost all fields of public administration. It has been the target of administrative reform for many decades. In recent decades, the reform has been promoted by the slogan "to transfer (roles and responsibilities) from the government to the private sector and from the national to local government". Reform of regulatory administration will be discussed later in this paper.

3. Regulatory Reform in JapanChange of Emphasis of Objectives of Reform Regulatory reform means any reform related to regulation, regulatory system and regulatory administration and includes deregulating or strengthening existing regulation, introduction of new regulation and improving the systems and practices of regulations and regulatory administration.

Regulatory reform is necessary for efficient public administration and in response to social, economic, technological and other domestic, international and global needs and changes. Regulation which was introduced as necessary and effective means to address certain problem may become unnecessary or ineffective. Burden of regulatory requirements on enterprise or individual may be too much in comparison with the objective of the regulation. Regulatory administration may be inefficient and ineffective. For these reasons, there have been continuous efforts for regulatory reform. Over time, however, primary objectives or the emphasis of regulatory reform in Japan has changed in the last three or four decades.

(1)Streamlining of government organizations and operationsRegulatory activities have been the core of the government function and activities. There have been many organizations and government employees engaged in regulatory activities. Assuming that regulatory reform would make it possible to reduce government organizations, employees and administrative cost, in any wide-ranging administrative reform effort, regulations and regulatory activities of the government have been reviewed to promote rationalization and streamlining of government. In fact, regulatory reform in early days, 30 years or more years ago, in Japan was usually referred to and understood as the same as the simplification and rationalization of administrative works related to permission, licensing and other regulatory activities of the government.

(2)Lessening the burden and cost of regulation on enterprises and individualsPublic regulation is burdensome and costly to private enterprises and individuals as well. Public regulations not only restrict activities of enterprises and individuals but also require burdens to comply with regulations and requirements such as reporting. As is the fist objective mentioned above, to lessen or reduce the burden and cost has been an important objective of deregulation and other regulatory reform since long time ago.

(3)Boosting and vitalizing economyStrong regulation suffocates the private initiatives and development of new industries and businesses, new products and services, and expansion of economies. Strong economic regulations, especially entry regulations, turn out to be the protective system for those already in the industry. To the contrary, the abolition of the monopoly system of telecommunication services stimulated the development and innovation of telecommunication services and ICT industries.

As the Japanese economy fell into the low growth period and later when the bubble economy burst, deregulation of economic regulations were expected to boost and revitalize economy. Whenever the government was put into the situation to make the plan to boost or stimulate economy, deregulation and other regulatory reform was considered as a part of the economic stimulus package without spending public money.

(4)Improving the quality of the life of the peopleDeregulation of economic regulations encourages the new entry into the business and the competition promotes the business initiative to provide better goods and services with lower prices. Deregulation of social regulations, for example, as a result of technological innovation, can also make it possible to provide new goods and services, and improve the quality of life of the people. Ironically, since around the time the Japanese economy entered into the low growth period, the quality of life became emphasized more than ever before. The government began to emphasize the importance of deregulation for this objective.

(5)International harmonization of regulations and related systems and practicesThe globalization of economic and social activities has necessitated and accelerated the international harmonization of regulations and related systems and practices. Discussion in the international arena such as OECD and bi-lateral or multi-lateral negotiation accelerated the international harmonization.

(6)Promotion of fairness and transparency of regulatory administrationSystems and measures, such as the administrative procedure law, to ensure the fairness and transparency of regulatory administration had been discussed since long ago, 50 years ago, in the arena of administrative reform. The globalization and the wave of international harmonization had much effect to promote measures to improve fairness and transparency of regulatory administration. To ensure fair and transparent process and procedure of regulatory administration has become an important objective of administrative reform

(7)Promoting structural reform of social and economic systems of the countryIn his first policy speech made in the Parliament in 2001, Prime Minister Koizumi emphasized the structural reform of social, economic, political systems of the country. Obsolete, inefficient and uncompetitive industries, business and other sectors became the target of structural reform. Deregulation or other regulatory reform was regarded as an effective way of promoting structural reform. Since the aim of structural reform is the revitalization of the Japanese society and economy, there was no untouchable area as a target of structural reform.

4. Targets and Contents of Regulatory Reform(1)Targets of regulatory reformTarget areas of regulatory reform have changed over time.

In early days when the streamlining of administration was most emphasized, all the fields of regulatory administration were targeted for government wide reform efforts. Abolishing obsolete, out-moded regulation is one example. Streamlining redundant or similar regulations by different government agencies over the same target enterprises was an example of this kind.

In general, economic regulations were targeted more than social regulations. Around the year of 1990, the slogan for the reform of economic regulation was set as Liberalization in principle and regulation only as an exception. This principle was not to be applied to social regulations relevant to public health, safety, welfare, environment and so on. Regulations concerning education, medical services, agricultures and so on were also dealt with differently.

From around the turn of century, and more clearly during the Koizumi government from 2001 to 2006, social regulations and other regulations which were less targeted than purely economic regulations became the main target of regulatory reform. The deregulation of the provision of services provided by the so-called government-made market has been promoted. Government-made market refers to the provision of services such as medical services, welfare services, education and employment arrangement where government and government-affiliated organizations provide services and the entry of other service providers have been strictly regulated.

(2)Contents of regulatory reformThere are different contents and aspects of regulatory reform observed in the experiences in Japan.

(1) Deregulation of economic regulationsAmong other things, abolition of regulations, changes from stronger regulations to weaker regulations, lessening the burden of regulations on enterprises and individuals have been implemented concerning economic regulations. Especially important was the deregulation of entry regulation. The demand and supply adjustment clause which had been applied as the basic principle of entry regulation concerning major service industries such as transportation services and bank and other financial services was abolished. Lengthening the term of validity of license, reduction of requirements of periodic reporting and so on are examples of reducing the burden of regulations on enterprises and individuals.

(2)Deregulation, re-regulation of social regulationsAs to social regulations, too, deregulation was implemented when it was reasonable and justifiable. Deregulation concerning building standards and housing materials are examples of this kind. Lessening the burden of regulation by lengthening the term of validity was implemented concerning driver's license, passport, motor-vehicle inspection, to cite just some examples. Reduction of requirements of periodic reporting has been implemented with various regulations. Deregulation and re-regulation, or change in the content or method of regulation, was implemented with many social regulations

(3)Opening "government-made markets"As mentioned above, so-called "government-made markets" became the target of deregulation and other regulatory reform. Deregulation of entry regulation, privatization, contracting out and market test have been implemented with services provided by "government-made markets" such as welfare services, medical services and education. One of the most controversial issues in this context has been whether a private profit making organization is to be allowed to enter into such service areas as medical services and education. But the management of prison facilities can also be contacted out now to a private company.

(4) Fairness and transparency of the regulatory administrationEfforts have been made to increase fairness and transparency of the process and procedure of the regulatory administration. Most important is the enactment of the Administrative Procedure Law in 1993. This law provides for the procedure to be applied to the processing of application of licensing, permission and so on, and the procedure to be applied to an unbeneficial administrative disposition such as the suspension of license. By this law, it is required to clarify and make open to the public the criterion of examining the application of licensing and the average processing time of application. In addition to it, to ensure the fairness and transparency of administrative guidance, the legal definition of administrative guidance is made for the first time and the basic rule of how administrative guidance is to made is set forth. Later, so-called public comment system was also introduced as a statutory system.

5. Methods and Process of Regulatory Reform(1)Deliberation by the Prime Ministers Advisory BodyDuring the days of LDP (Liberal Democratic Party) Government, an advisory council was created to deliberate on specific deregulation and regulatory reform measures and to make proposals to the Prime Minister. In early days, Prime Ministers advisory body which was responsible for wide-ranging administrative reform dealt with deregulation and regulatory reform as a part of its term of reference. Later, independent advisory bodies solely responsible for deregulation and regulatory reform were organized. They were the Comprehensive Regulatory Reform Council and the Regulatory Reform and Market Opening Promotion Council which succeeded the Comprehensive Regulatory Reform Council.. They were usually composed of scholars, business leaders, trade union leaders, consumer organizations leaders and mass media commentators. These advisory bodies were the places not only for deliberation but also for making a consensus.

The new DPJ government currently in power did not activate the Regulatory Reform and Market Opening Promotion Council but created a subcommittee in the Administrative Revitalization Council which the DPJ government created by the cabinet decision. Different from the previous advisory bodies, the Subcommittee on Regulatory Reform is chaired by the Senior Vice Minister who is a politician.

In any case, an advisory body calls for opinions from those concerned and also holds a meeting to hear opinions from regulating government offices, the regulated organizations and others.

(2)Involving all ministries concerned by the cabinet decisionTo promote the government-wide regulatory reform, involving all the ministries and agencies, the national government has made a series of cabinet decisions on deregulation and regulatory reform. They were first included in the wide-ranging administrative reform plans and then decided as a separate package of regulatory reform measures such as Three Year Deregulation Plan. The LDP government made it a rule to make a reform plan including several hundred specific measures. The three year reform plan was revised every year by reviewing the progress and adding new measures.

(3)Decentralization of regulatory activities to local governmentIn line with the efforts for the decentralization, more regulatory functions and activities have been transferred to local government. To make this change more meaningful, the authority of local government has been strengthened gradually by widening the room for latitude, discretion and bye-law making of local government which can implement regulatory administration in the way most suitable to the specific condition and context there.

(4)Use of the special regulatory reform zone systemNational government regulations are regulations to be applied uniformly throughout the country. Therefore, even when there is a specific need to change or deregulate existing regulation in some local area, it is not necessarily easy to change it as a national uniform regulation. The special regulatory reform zone system allows certain local government to propose an exceptional deregulatory measure applicable to that specific local government area. If this exceptional measure results in success, it should be discussed whether this exception measure can be a general rule to be applied throughout the country. This is something like a special zone system in China.

6. Sustainable System and Practice of Regulatory Reform ManagementWith experiences of deregulation and regulatory reform efforts in the last three decades, several systems and practices have been introduced to contribute sustainable regulatory reform. Important ones are as follows.

(1) Building up data base of existing regulations by periodical surveyWith the cooperation of all ministries and agencies of the national government, the Administrative Evaluation Bureau of the Ministry of Internal Affairs and Communications ((formerly the Administrative Inspection Bureau of the Management and Coordination Agency of the Prime Ministers Office) makes a survey of regulations. The Administrative Evaluation Bureau periodically checks the texts of all effective laws, cabinet ordinances, ministerial rules and others. Data base of existing national government regulations as defined by the Bureau has been built up. Based on this data base, various analyses became possible. The number of regulations of each ministry is counted and changes of regulations and reasons for such changes are analyzed.

(2)Examination of proposals of new regulation and changes of existing regulationsWhen any ministry plans to introduce new regulation or amend existing regulation, the plan must be examined by the central management offices; the Administrative Management Bureau, the Budget Bureau and the Cabinet Legislation Bureau. The Administrative Management Bureau of the Ministry of Internal Affairs and Communications is responsible for management (examination and coordination) of national government administrative organizations (ministries, agencies and others), government affiliated organizations, man power of administrative organizations, and basic administrative systems. The Budget Bureau of the Ministry of Finance is responsible for making the Government Budget to be submitted to the Diet. The Cabinet Legislation Bureau is responsible for examining legislative bills and drafts of cabinet ordinances drafted by ministries and agencies. In relation to their responsibilities, these offices are required to examine the proposals and drafts of new regulations and the amendment of existing regulations of all ministries and agencies. When these offices admit the new regulation, the review clause is required to be included, in principle, in the draft of new regulation so that the new regulation in question should be reviewed at certain point after its introduction.

(3)Regulatory impact analysis and analysis of the impact of regulation on theconditions for competitionAfter three years of experimental practices, ante facto regulatory impact analysis system was officially introduced in Japan in 2007. Every ministry is required to make a regulatory impact analysis before the introduction of new regulation is decided. Regulatory impact analysis includes objectives and necessity of new regulation, cost and benefit analysis, and comparison of alternatives.

In addition, an analysis of regulation on the conditions of competition is experimentally conducted. The Fair Trade Commission prepared the checklist to make such analysis.

(4)Public comment systemPublic comment system was introduced first by the cabinet decision in 1999 and then included in the Administrative Procedure Law in 2005. Any organization or individual, Japanese or foreign, can submit comments on the draft of regulation proposed by a ministry or agency. Any ministry or agency is required to make open the draft of regulation, and call for any comment for thirty days or longer period. Content of such comments and how they are dealt with must be known to the general public.

(5)Policy evaluationThe Policy Evaluation Law was enacted in Japan in 2002. Ministries and agencies are required to make evaluation of their policies, programs and projects. As a part of evaluation activities, performance and results of regulatory administration are evaluated.

(6)Administrative Procedure LawMaking a regulation is one thing. Implementation is another. Process and procedure of implementation and operation is important. Administrative guidance has been a very effective and important way of doing things in implementing government activities including regulations. The Administrative Procedure Law was enacted in 1993 to ensure the fair and transparent operation of public administration. Including provisions on administrative guidance is unique to the Administrative Procedure Law of Japan.

7. Regulatory Reform by the new DPJ Government(1)Slow startThe Democratic Party of Japan (DPJ) came into power for the first time in September 2009. Partly because it was preoccupied with budget making it had never experienced and partly because regulatory reform was of lower priority in its policy agenda and DPJ did not want to use reform organizations inherited from the previous government, regulatory reform activities of the new DPJ coalition government started very slowly. DPJ has been critical about the deregulation by the preceding government, the Liberal Democratic Party government. And the DPJs coalition partners, the Social Democratic Party and the Peoples New Party, are not enthusiastic about deregulation. It is in March 2010 that DPJ made a real start of reform activities by its new organization.

(2)Administrative Revitalization Council and its sub-committeeDPJ does not use the Regulatory Reform and Market Opening Promotion Council, a statutory body to advise the Prime Minister, inherited from the previous LDP government. Instead, DPJ organized the Subcommittee for Reform of Regulation and System in the Administrative Revitalization Council which is non-statutory organ created by the DPJ government by the cabinet decision. The Administrative Revitalization Council is composed of about ten members; the Prime Minister, the Minister for Administrative Revitalization and a few other Ministers, and a few members invited from out side of the government.

Within the Subcommittee for Reform of Regulation and System, three working groups were organized in March 2010. They are Green Innovation Working Group, Life Innovation Working Group, and Agriculture and Forest Vitalization and Regional Revitalization Working Group. These working groups made reports to the Subcommittee for Reform of Regulation and System. The subcommittee discussed reports and proposals of three working groups and, adding its own proposals on the issues which were not dealt with by working groups, made the report to the Administrative Revitalization Council.

(3)Scrutiny by the Administrative Revitalization CouncilIn March 2011, the Administrative Revitalization Council held an open debate with ministry officials in charge of specific regulations to scrutinize few selected regulatory reform issues. The Council had this kind of scrutiny by open debate on expenditure programs during the budgeting season in 2009, on criticized government affiliated organizations in 2010, and on other subjects. On the side of the Council, teams of scrutiny were organized including politicians and well-informed people invited from out side of the government. It is a symbolic event to appeal to the general public that DPJ is enthusiastic about regulatory reform. It is also to show that there exist regulations which are not necessarily reasonable and justifiable and even officials in charge of them cannot explain persuasively. Politicians played important roles in the scrutiny activities.

However, different from scrutiny by open debate in early days on other subjects such as public expenditure programs, the general public did not appear very much interested in this event on regulatory reform. It is probably because that the method of the scrutiny by open debate lost its freshness and could not attract the attention as much as before. It is also likely that the general public do not have much enthusiasm for deregulation, witnessing some ill-effects of deregulation by the LDP government.(4)Political leadershipDPJ advocates the strong political leadership in the running of the government. DPJ has been quite suspicious about the loyalty of bureaucrats as it has never worked with bureaucrats in the government before. This policy of strong political leadership is applied also in discussing and promoting regulatory reform by the DPJ government. The Administrative Revitalization Council is headed by the Prime Minister and dominated by politicians. Senior Vice Minister (politician) became the chair of the Subcommittee for Reform of Regulation and System. Parliamentary Secretary (politician) who is junior to the Senior Vice Minister became the chair of three working groups. In the case of LDP government such positions were usually held by influential business leaders or university professors. In scrutiny event of regulations by teams organized by the Administrative Revitahzation Council, politicians played important roles.

(5)New regulatory reform planThe DPJ government considered to make its own regulatory reform plan. Before making its wide-ranging reform plan based on the work of working groups, it was forced to make an economic policy plan to realize new growth strategies and an urgent economic policy package to address the problems of appreciated yen and deflation in fall of 2010. As to the far more comprehensive regulatory reform plan based on the report of the Administrative Revitahzation Council, the DPJ government planned to make its regulatory reform package by the end of March 2011. However, it was postponed to April because of the big earthquake on March 11. The number of items included in the plan was more than 100 but less than working group reports had suggested. Those items which could not get consensus were not included in the package.

(6)Possible changes after the big earthquakeThe big earthquake on March 11 and what happened after the earthquake has disclosed many problems, shortfalls and difficulties in the government systems, organizations, regulations and others. In addressing enormous tasks to reconstruct earthquake-hit areas and to give rebirth to Japanese society as well, the DPJ government needs to come up with drastic reform programs including regulatory administration.

(7)Successful or notIt is yet to be seen whether the regulatory reform by the new DPJ government becomes successful or not. But the popularity of the current DPJ government is very low. Unless the Prime Minister and other political leaders show strong will and determination and exercise actually the strong leadership, drastic changes are not likely to happen.

8. Features Characteristic to Regulatory Reform in JapanBy reviewing the experiences in Japan in the last three decades, several features can be pointed out which appear characteristic to Japanese regulatory reform or administrative reform in general.

(1)Decision making by consensusImportant decisions for reform are usually made by consensus among those concerned. Usage of advisory bodies, the composition of advisory bodies, process and procedures of discussion and negotiation, and decision making has been designed in view of the importance of consensus.

(2)Gradual and piecemeal adjustment to changesBecause of the consensus building approach to decision making, gradual, and piecemeal or incremental adjustment to the needs of reform is usually adopted. When a drastic reform is necessary, it is often accompanied by supplementary or compensatory measures to persuade those who are likely to be severely affected by reform measures.

(3)Time consuming decision making processIt is often time consuming to come to consensus in decision making. Once the decision is made, it is smoothly implemented without consuming much time in Japan. There are countries where it does not take much time for the national leader to make a decision, but it may take much time to implement because of the objection or unfavorable attitudes of those concerned. If the time consumed from the initiation of decision making process to the end of implementation process is added up altogether, we cannot say which way of doing things is efficient. However, the decision making by consensus approach in Japan has produced an unfavorable image that it is too much time consuming, often referred to as "too little, too late."

(4)Smooth implementationOne of the important merits of consensus building approach is that a decision is usually smoothly implemented once the decision is made.

(5)Effects of gradualisminsufficient change of mind-set of those concernedWhen the reform is gradual, piecemeal or incremental, it is relatively easy for those concerned to adjust to changes. It is possible to adjust changes without changing their mind-set very much. If reform measures are drastic and the conventional mind-set is to be changed drastically, the situation will be quite different. Without changing mind-set, new reform measures are likely to be regarded as assigned or forced from out side. Additional or succeeding reform measures or innovation may not come from within their mind-set. The attitude of those with vested interests in existing regulatory systems is usually passive and less proactive to reform.

(6) Adjusting to changes rather than leading changesEven though continuous deregulation and other regulatory reform efforts have been made and various systems have been introduced for the continuous improvement of regulatory administration in Japan, the attitude of the government and behaviors of those concerned outside of government is more or less passive to outside changes. It seems that their basic stance has been to adjust to changes outside of the government and outside of the country rather than leading changes ahead of other actors. When they begin the implementation of reform measures after the time consuming decision making process, conditions which necessitated such measures may be changing already. Reform leaders and advanced countries have finished their play in the first round and may be going to the next stage when Japan begins to play in the first round. It soon becomes necessary for Japan to change its policy and catch up with other countries to play on the next stage. This necessitates another round of reform efforts in Japan. This may be one of the reasons underlying the continuous reform activities in Japan. Thus, the reform efforts continue with gradualism, and there appear those who complain about reform fatigue.

ConclusionNo one can deny that the Japanese government has made considerable and continuous efforts for deregulation and other regulatory reform. Most of the specific contents of deregulations or other reform of specific industries and businesses and other sectors included in the reform plans and programs have been implemented. Yet, it is difficult to say whether those reform measures have produced expected results or effects. It may be because the reform has been gradual and people could not consciously feel the big change. It may be because the gradual reform did not necessarily accompany the change of mind-set of those concerned. Because the change was incremental and piecemeal, continuous changes were necessary to adjust rapid and wide-ranging changes in recent decades of increasing globalization.

As to the basic reform such as the enactment of the Administrative Procedure Law, too, it is difficult to say that the basic objectives of the laws have deeply rooted in the daily activities of the government organizations. Even though there were not many cases of inappropriate regulatory administration, it is yet unclear whether it is because of the existence of the Administrative Procedure Law. It is unclear whether the mind-set of officials engaged in regulatory administration has changed very much because of the enactment of the Administrative Procedure Law.

Looking back the history and experiences of regulatory reform in Japan, it is clear that Japan should have more proactive attitudes and approaches to changes. These changes must and will accompany the change of mind-set of people. To make it possible, people in every sector need to be aware of what is going on out side of the country. Contrary to the increasing globalization, it is said that Japanese people have become inward looking.

The earthquake of March 11 of 2011 may become the turning point for Japanese people. Japanese people came to realize how they are closely connected to the outside world and people in other countries. In the process of overcoming the difficulties after the earthquake, Japanese government and people have responsibilities to produce precious achievements and lessons.