Japan's new special zones for regulatory reform

Japan's Special Zones for regulatory reform were established in 2003 as an endeavor to enhance nationwide regulatory reforms based on local government initiatives. These Special Zones are not like the free trade zones inviting foreign capital that have been taken on as national projects in Ireland or China. In fact, this scheme acts to stimulate regulatory competition between municipalities to attract new business activities by both foreign and domestic firms in the local areas. This approach is a significant step towards mobilizing local government initiatives under a highly centralized administrative system in Japan, and marks a shift toward a more market-based economy.