of market forces, at the stages of policy application they have allowed many trials and errors. Many Japanese tend to perceive that in the US and the U.K. liberalization policies have been conducted in a straightforward manner and that the processes are mostly completed. The fact is, respective deregulation policies have often faced difficulty, and pragmatic approaches were taken to settle or get around the problems in case-by-case basis. Even now, many problems remain and trials and errors are going on.

In the U.K., Prof. Yarrow showed that after the start of Thatcher Administration, the privatization process has progressed through the three stages. In the case of airlines and long-distance telecommunications in the 1980s after their privatization, the Government tried to promote competition in a duopoly regime. That strategy was proved unsuccessful as seen in the failure of British Caledonian Airways, so in the 1990s the policy changed into encouraging more entry. At the time of the electricity privatization, considering the gas case that a powerful monopoly emerged, the vertically integrated national company was divided to weaken market power.

In the US, Dr. Perl pointed out that, in industries regulated by State governments, or in markets in which competition and regulation must coexist, deregulation processes have been slow and controversial. In telecommunications, arguments are under way on mutual entry of long-distance and short-distance or local networks or on mutual entry of telecoms and entertainment services. In electricity, the opening of electricity wholesale market was initiated in the 1970s, but its bidding process proved to have a defect which could cause some bias of pricing by inviting political intervention. Modification of the process is being argued. Even in airlines in which the Federal Government smoothly conducted elimination of regulatory in the late 1970s, rapid marketing innovations causes concern for the emergence of new market power.

In Japan, the ultimate goals of regulation and deregulation policies are often unclear. Furthermore, regulators are inclined to avoid trials and errors in the application of the policies. So, the likely results are just the status quo. The problem is, such network-type industries as were covered in this co-study can develop very rapidly and toward an unexpected direction as information technology develops. Thus in regulatory policies, trials and errors are unavoidable. To try to avoid them can hinder the industrial development itself, and can sacrifice future jobs and living standard.

### B. RELATIONS BETWEEN REGULATORS AND BUSINESS

The market pressure toward deregulation and competition that Dr. Perl pointed out about the US case also apply to the U.K. and Japan. The international price differential, characteristic of Japan, is a major force for deregulation in the country, but in the US, requests for price reduction in electricity and telecommunications promoted deregulation. That is, economic backgrounds of pressure toward deregulation should be common to the three countries. Difference between Japan and the other countries lies in the relations between regulators and business.