Historical features of Japan's public utility laws and the limits of 'deregulation

Since the pre-war era, and especially since the financial crisis of the early 1930s, a conspicuous feature of Japanese legal institutions surrounding public utilities has been their regulation through bargaining with utility operators' cartels. This feature was reinforced by wartime economic policies that promoted an artificial concentration of economic power, and then by the seriously limited nature of post-war reforms undertaken during the occupation. In the resulting environment of weakened regulation, the practice of applying public utility law by making use of bankruptcy-resistant cartels took root. It was not until the early 1990s, with the government's decision to abolish, in principle, 'supply-demand balancing' requirements, that the regulatory mechanisms dating from pre-war days were subjected to comprehensive and serious reform for the first time. The reforms under way, however, are open to question on a number of counts, including the implementation of the Antimonopoly Act and competition policies, the reform of regulatory agencies and regulatory procedures, and the redesign of the new regulatory mechanisms needed to accomplish meaningful change. In light of these questions, the possibility still exists that the regulatory measures deemed necessary for promoting competition among public utilities and securing universal services will be distorted by various forms of bargaining. The success or failure of the ongoing reforms of public utilities needs to be judged on whether or not the new form of legal regulation can base itself on new foundations and, by overcoming these problems, stake a claim to legitimacy.

Deregulation · Economics · Market economy · Political science · Judicial and Constitutional Studies · Law · Political Influence and Corporate Strategies

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