There are many of us regulatory experts who do not fully support deregulation. In that context, the example of Korea, which has been pursuing a deregulation campaigns since 1998, is quite enlightening. An interesting summary is provided by a recently published editorial in the Korean Herald. The article concludes that deregulation has proved efficient to speed up recovery from the Asian financial crisis by improving the business environment. But these efforts apparently need to be intensified with across-the-board elimination of regulations that unnecessarily require licenses or permits. A new technique has been devised for the latest deregulation initiative: transforming the current positive-list system for issuing licenses and permits to a negative-list one. A positive system prohibits all activities except those that are explicitly approved, while a negative approach allows all activities except those that are specifically prohibited. Under a negative system, a person can start a business without a license or permit unless it is banned by law.
For more on this interesting new (?) approach, see the editorial.
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