Working Paper: NBER ID: w21507
Authors: Jamal Ibrahim Haidar; Takeo Hoshi
Abstract: Improving the environment for business is an important part of the growth strategy of Abenomics. As the goal for this effort, the Abe Administration aims to improve Japan’s rank in the World Bank Doing Business Ranking to one of the top three among OECD. This paper clarifies what it takes for Japan to achieve the goal. 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 six groups depending on whether the reform requires legal changes and on political resistance that the reform is likely to face. 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 13th. To be in the top 3, Japan would need to implement all the reforms that are not likely to face strong political resistance. The conclusions, however, are based on the assumption that the conditions in the other countries do not change, which is unrealistic. Thus, Japan would need to carry out all the reforms including those with high political resistance to be among the top three.
Keywords: Abenomics; Doing Business; Japan; Regulatory Reforms; Economic Growth
JEL Codes: G38; H25; K22; L51; O43; O53; P16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Reforms that do not require legal changes and face low political resistance (O17) | Improvement in Japan's ranking from 19th to 13th among OECD countries (O57) |
| Implementation of all necessary reforms (including those with high political resistance) (D78) | Achieving a top-three ranking (A14) |
| Reforms (E69) | Reducing the time and cost of business registration (K20) |
| Reforms (E69) | Improving the ease of starting a business (M13) |
| Reforms (E69) | Enhancing investor protections (G38) |
| Reforms (E69) | Increased business creation (M13) |
| Reforms (E69) | Economic growth (O49) |