Reducing Administrative Costs from the Standpoint of Businesses

Author Name ISHIZAKI Takashi (Senior Fellow, RIETI)
Creation Date/NO. December 2019 19-P-033
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The Council for Promotion of Regulatory Reform decided, in March 2017, that the numerical goal for the reduction rate of administrative costs would be at least 20% for three years until fiscal year 2019." This kind of numerical reduction, which started in Europe in the 2000's, is the first such effort in Japan.

Once measured, the Japanese administrative cost amounted to 330 million hours (820 billion yen). The effort during this period is expected to reduce the cost by 70 million hours (180 billion yen). Similar efforts by all prefectural governments, some of which have already started, will reduce the cost by an additional 170 million hours (450 billion yen).

To realize a reduction in administrative costs, measures for enhancing the utilization rate of online systems (including the introduction of corporative ID/login procedures, the standardization and unification of applications between local governments, etc.) are necessary in addition to the simple digitalization of procedures. Despite the arrival of new IT companies that provide administrative services, legal or systemic problems could become obstacles to implementation. A measure such as the "1-in 2-out" rule introduced in the US and European countries should be considered as a successful approach to the reduction of the administrative costs in Japan.