Advances in Regulatory Economics series
Edited by Michael A. Crew, Paul R. Kleindofer and James I. Campbell Jr
Chapter 21: How Much Postal Reform in Japanese Postal Privatization?
* James I. Campbell Jr.† and Amelia Porges‡ 1. INTRODUCTION On 1 October 2007, the curtain came down on over 130 years of postal banking and insurance in Japan, as Japan Post Public Corporation was dissolved and its functions devolved to successor postal and ﬁnancial corporations at the outset of a 10-year privatization process. Former Prime Minister Junichiro Koizumi, the strong-minded reform politician who had pushed through the decision to privatize, was there with corporate chiefs and other political leaders to cut the ribbon at the launch ceremony for the new Japan Post Group. The privatization process thus launched was not, and is not, focused on revitalizing postal delivery services, for the overall stakes have always been much larger. Koizumi’s key objective as prime minister was to achieve ﬁscal and political reform by unlocking the billions of dollars in banking and insurance assets held by the postal system and cutting oﬀ the ﬂow of these assets into government spending. Postal reform as such was an afterthought. Enactment of the postal privatization package took many years of political struggle, a legislative stalemate, a snap election campaign focused on postal privatization, and a landslide victory for Koizumi after he campaigned against the recalcitrant within his own party. The political compromises he made along the way have inﬂuenced the design of privatization and will aﬀect all of the Japan Post Group entities on a continuing basis. Japan Post Bank, Japan’s largest bank, and Japan Post Insurance, its largest insurance company, will continue...
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