The government issued its annual economic white paper Friday, calling for greater deregulation and other market-driven reforms aimed at slimming down the bureaucracy.

The paper also advocates closer policy coordination with the Bank of Japan on the vexed subject of deflation.

The Annual Report on the Japanese Economy and Public Finance 2005 states that the government should spur administrative and fiscal reforms -- including social security-related reforms -- to shift more functions "from the public sector to the private sector" and to realize a "small government."