The Organization for Economic Cooperation and Development has drafted a report recommending eight policy principles for regulatory reform in member countries to help spur their economic growth and promote international trade and investment.
The draft report, a copy of which was obtained Friday by The Japan Times, will be submitted to an annual ministerial meeting of the OECD in Paris May 26-27 for endorsement after some modifications are made in response to opinions from its 29 member economies.
The report will serve as a common guideline for the OECD economies to promote deregulation and other regulatory reforms. The OECD has worked on the guideline over the past two years after Prime Minister Ryutaro Hashimoto, then Japanese minister of international trade and industry, proposed the drawing up of such a reform guideline.
Earlier this year, the OECD secretariat also drafted proposals for regulatory reform in specific sectors. These will be presented to the ministerial talks as an annex to the report.
The draft report notes that growing recognition of the adverse impacts of ill-adapted and unnecessary regulation on economic performance, trade and investment and social well-being has pushed regulatory reform high up on political agendas.
Experiences of reforming countries demonstrate that regulatory reform can yield substantial benefits, it says, citing an estimate by the OECD secretariat that far-reaching reform in five key sectors — electricity, telecommunications, air transport, road haulage and retail distribution — could raise the level of gross domestic product in some heavily regulated member countries, including Japan, by a maximum of 6 percent in the long run.
According to the draft report, the reform-policy principles include adoption and maintenance of regulations only if they are justified by benefits and only if they also achieve objectives at a lower cost than nonregulatory approaches do.
The principles also include promotion of competition and efficiency throughout the economy and elimination of regulatory barriers to trade and investment.