2. An overview of subsidies and contracting out in Japanese
publicly-owned bus sector
2.1. Local buses in Japan
In the institutional context, the deregulation of the Japanese local
bus market occurred in the year 2002. This allowed operators to
enter or exit from the market relatively easily. In the era of regulation,
entry of operators required a license, and exit too required
permission. However, in the present system, permission is required
only for an operator to enter the market, and a submission is
required for exiting the market. The fare of the bus transport system
was strictly regulated (approval) earlier; however, this system was
replaced by a ceiling price regulation. Although the institutional set
up of the Japanese local bus marketwas altered, the market structure
thus far does not seem to have changed considerably.