Implementing Structural Reforms in Abenomics: How to Reduce the Cost of Doing Business in Japan

27 Pages Posted: 6 Jul 2014

See all articles by Jamal Ibrahim Haidar

Jamal Ibrahim Haidar

Harvard University

Takeo Hoshi

University of California at San Diego; National Bureau of Economic Research (NBER)

Date Written: June 25, 2014

Abstract

Improving the environment for business is an important part of the growth strategy of Abenomics. As the KPI (Key Performance Indicator) for this effort, the Abe Administration aims to improve Japan’s rank in the World Bank Doing Business Ranking from the current #15 among high-income OECD countries to one of the top three. This paper clarifies what it takes for Japan to be among top three countries in terms of ease of doing business. By looking at details of the World Bank Doing Business ranking, we identify various reforms that Japan could implement to improve the ranking. Then, we classify the reforms into four groups depending on whether the reform requires legal changes and whether the reform is likely to face strong political resistance. By just doing the reforms that do not require legal changes and are not likely to face strong political opposition, Japan can improve the ranking to 9th. To be in the top 3, Japan would need to implement all the reforms except for those that require changing the laws and are likely to face strong political resistance, even under the unrealistic assumption that the other countries do not reduce the cost of doing business. Thus, in order to be one of the top three countries among OECD countries in terms of ease of doing business, Japan would most likely need to carry out all the reforms identified in this paper.

Suggested Citation

Haidar, Jamal Ibrahim and Hoshi, Takeo, Implementing Structural Reforms in Abenomics: How to Reduce the Cost of Doing Business in Japan (June 25, 2014). Available at SSRN: https://ssrn.com/abstract=2462735 or http://dx.doi.org/10.2139/ssrn.2462735

Jamal Ibrahim Haidar (Contact Author)

Harvard University ( email )

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HOME PAGE: http://scholar.harvard.edu/haidar

Takeo Hoshi

University of California at San Diego ( email )

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National Bureau of Economic Research (NBER)

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