Regulatory reform is at the heart of Japan’s strategy for economic recovery and long-term growth. Identified as a priority by the Japanese Government as early as 1994, considerable progress in regulatory reform has already been made. But today it is essential that regulatory reform be deepened and accelerated. This report calls for a "sharp break" with the regulatory practices and doctrines of the past. Energetic measures, including both sectoral reform and reform of framework conditions, need to be adopted quickly to complete the transition from a state-led growth model, now largely ineffective, to a market-driven growth model, the only model capable of laying the foundation for sustainable competitiveness and prosperity in Japan. Japan was one of the first OECD countries to request a broad review by the OECD of its national regulatory practices and domestic regulatory reforms. This report -- the result of intensive assessment by the OECD and review by its Member countries -- is unique in that it presents an integrated assessment of regulatory reform in framework areas such as the macroeconomic context, the quality of the public sector, competition policy and enforcement, and integration of market openness principles in regulatory processes, and in sectors such as electricity and telecommunications. The policy recommendations present a balanced plan of action for both short and longer-term based on best international regulatory practices. Further Reading In the same series: Regulatory Reform in the United States, Regulatory Reform in Mexico and Regulatory Reform in the Netherlands. The general policy analysis that is the basis for these country reviews is presented in the OECD Report on Regulatory Reform: Synthesis, and the supporting two-volume OECD Report on Regulatory Reform: Sectoral and Thematic Studies, published in 1997.