Monday, May 27, 2013

20130527 Links: Japan, Greece

1. Japan: Is Abe neglecting structural reform in Japan? In particular, what's the role of female labor participation

In this video William Pesek argues that policymakers could try to boost female labor. The female labor force participation in Japan is just 50%, below that of most advanced countries. But there are other structural reforms that Japan needs as much, if not more, than monetary and fiscal stimulus. One not-well-known imbalance of the Japanese economy is excess corporate savings, as argued by Martin Wolf. That is, corporations have been retaining an excessive large share of their earnings, at the expense of lower dividend distribution and lower employee compensation. Because the corporate sector does not need to invest more, and it retains a large share of domestic income, private sector spending is depressed. The government has made up for it by running large deficits, but Martin Wolf believes it should encourage a redistribution of income from the corporate to the household sector. In that direction, Abe's administration has also offered corporate tax reductions of up to 10% of wage increases of companies that raise their average salaries. 
Japan could also try to mitigate the disparity between the compensation of ‘regular’ (indefinite-term) and ‘non-regular’ (fixed-term) workers, and forcing unions to loosen up their grip on employer-worker relations. Admittedly, this may increase job turnover and the volatility of unemployment, but it may also give workers more bargaining power.

In this age of satellite imagery, digital records and the instantaneous exchange of information, most of Greece’s land transaction records are still handwritten in ledgers, logged in by last names. No lot numbers. No clarity on boundaries or zoning. No obvious way to tell whether two people, or 10, have registered ownership of the same property.
As Greece tries to claw its way out of an economic crisis of historic proportions, one that has left 60 percent of young people without jobs, many experts cite the lack of a proper land registry as one of the biggest impediments to progress. It scares off foreign investors; makes it hard for the state to privatize its assets, as it has promised to do in exchange for bailout money; and makes it virtually impossible to collect property taxes.
This state of affairs is particularly galling because Greece has thrown hundreds of millions of dollars at the problem over the past two decades, but has little to show for it. At one point, in the early 1990s, Greece took more than $100 million from the European Union to build a registry. But after seeing what was accomplished, the European Union demanded its money back.

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