RIETI Report December 2019

Evidence-based Regulatory Reform

Despite recent successes in improving economic trends for Japan, there is much work to be done to improve its vitality. RIETI Vice President Morikawa looks at Japan's policy of regulatory reform in terms of effectiveness, based on wide-ranging surveys of industries and business communities in an attempt to provide some guidance in terms of future directions that policy should take to lift Japan out of its long-standing economic rut, with symptoms of low productivity and wage stagnation leading to declining local economies and lagging international competitiveness. The impacts of social regulations, local and national government licensing and permit programs, international political and economic unrest need to be addressed with real-world solutions backed by profound comprehension of policy effects, which only serious analysis will provide.

This month's featured article

Evidence-based Regulatory Reform

MORIKAWA MasayukiVice President, RIETI

The year 2020 will be the eighth year since Abenomics started. Although quantitative policy impacts are difficult to identify, many economic indicators have improved over these few years. Corporate operating profits have increased by 70% from FY2012 to FY2018, and non-manufacturing profit margins have hit a record high. The unemployment rate has declined to the low 2% range, a level before the "lost two decades." Against the background of labor shortages, labor participation rates of women and elderly people have risen.

Life satisfaction score has improved in Japan, hitting a post-war record in 2018. This is probably because of the improved employment environment and low rates of price increases. The 2% inflation target set by the Japanese government and the Bank of Japan has not yet been met, but low inflation rates positively affect people's life satisfaction. The life satisfaction score has especially increased among young males, although this may be partly attributable to their lowered aspirations. However, high life satisfaction itself is good news.

To read the full text
https://www.rieti.go.jp/en/columns/s20_0001.html

Recent articles on RIETI's website

"The impact of the US-China trade war on Japanese multinational corporations"
by SUN Chang (Assistant Professor, Faculty of Business and Economics, University of Hong Kong) / TAO Zhigang (HSBC Professor in Global Economy and Business Strategy, Director of the Institute for China and Global Development, University of Hong Kong) / YUAN Hongjie (PhD candidate, Faculty of Business and Economics, University of Hong Kong) / ZHANG Hongyong (Fellow, RIETI)
https://www.rieti.go.jp/en/columns/v01_0132.html

"Free Preschool Education: Tackling the Problem of Waitlisted Children Should Be Top Priority"
by HATTA Tatsuo (Faculty Fellow, RIETI)
https://www.rieti.go.jp/en/papers/contribution/hatta/06.html

"Getting economic and national security policy right"
by Shiro ARMSTRONG (Visiting Scholar)
https://www.rieti.go.jp/users/shiro-armstrong/serial/002.html

"Post-disaster subsidies for small and medium firms: Empirical insights for effective targeting"
by KASHIWAGI Yuzuka (Japan Society for the Promotion of Science (JSPS) Research Fellow and PhD student, Waseda University)
https://www.rieti.go.jp/en/columns/v01_0131.html

"Highly-skilled Personnel Utilization for Increasing IT Use and Productivity"
by INUI Tomohiko (Faculty Fellow, RIETI)
https://www.rieti.go.jp/en/columns/a01_0534.html

"Uphill Battle for WTO Reform Toward MC12"
by KAWASE Tsuyoshi (Faculty Fellow, RIETI)
https://www.rieti.go.jp/en/papers/contribution/kawase/06.html

"On the Decline of R&D Efficiency"
by MIYAGAWA Tsutomu (Faculty Fellow, RIETI) / ISHIKAWA Takayuki (Doctoral Program, Graduate School of Economics, Hitotsubashi University)
https://www.rieti.go.jp/en/columns/v01_0130.html

"An Urgent Need to Establish Systems for Hastening the Fourth Industrial Revolution"
by KWON Hyeog Ug (Faculty Fellow, RIETI)
https://www.rieti.go.jp/en/columns/a01_0533.html

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