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The Privatization of Japan Railways and Japan Post: Why, How, and Now

Publication | November 2019
The Privatization of Japan Railways and Japan Post: Why, How, and Now

Privatization, deregulation, and decentralization could create a powerful platform not only for the company but for the society as a whole.

The privatizations of Japanese National Railways (JNR) and Japan Post (JP) have been one of the biggest reforms for state-owned enterprises (SOEs). Since the beginning of the privatization processes in 1987 for JNR and 2007 for JP, respectively, the outcomes of these reforms have been reflected in productivity, quality of service, as well as in diversification. We illustrate the process and consequences for these two cases, representative of the history of SOE reforms. These two reforms have different backgrounds but the structural reform and deregulation along with the application of advanced technology in service diversification have been the key to success. Lessons learned from this process and the innovative measures taken could shed light on the reform of SOEs in the transportation and financial sectors to improve efficiency and create more diversified service platforms for society in many developing countries.

WORKING PAPER NO: 1039