1996 Reports

Deregulation and privatization of the fiscal investment and loan program

Tsuji, Masatsugu

After the oil crises when the Japanese economy underwent structural change from a high to a low growth rate, the flow of money and funds was also affected, and the Fiscal Investment and Loan Program also underwent a great change. But nowadays a real change might be necessary for the FILP; that is, as deregulation of the financial market proceeds and the market mechanism increasingly moves into motion, the role of the government is expected to decrease. This paper will analyze the role of financial activities of the government, and examine why the FILP faces reform, and how it should be deregulated by considering the economic foundation of the FILP as well as its relation with the transformation of the Japanese economy.