Now That the Fog Has Lifted: The Impact of Japan's Administrative Procedures Law on the Regulation of Industry and Market Governance

This Comment argues that the APL will help transform Japan’s informal regulatory style into a market-based regulatory structure that will foster improved efficiency and other benefits associated with market-based regulations. Part I discusses the development of informal administrative decision-making methods within Japan, analyzes the lack of judicial review of administrative guidance, and examines the process of administrative guidance. Part I also examines the factors that contributed to the enactment of the APL, to both limit and refine the administrative guidance process. Part II discusses the APL in light of the previous procedural inadequacies of the administrative guidance process, highlights new procedural guidelines promulgated by the Ministry of International Trade and Industry (“MITI”) and the Ministry of Finance (“MOF”), and analyzes these ministries’ compliance with the APL. Part III argues that the APL is a positive first step towards the establishment of fair and transparent administrative processes in Japan. This Comment concludes that, despite the APL’s weaknesses, growing business conviction and the declining influence of Japan’s regulatory agencies will supplement the impact of the APL in pushing Japan towards a market-driven regulatory system.