Where Do We Come From? What Are We? Where Are We Going? Recommendations from Policy History Research

SABURI Masataka
Research Coordinator (Policy History), RIETI

P. Gauguin (1897)

METI's 21st Century

"The mission of the newly created Ministry of Economy, Trade and Industry (METI) was to ‘become a navigator to support the activities of various entities toward the realization of an economic and social system in which diverse entities can maximize their capabilities,’ and to address policy issues that arise in the face of environmental changes in the 21st century, including the integration of the economy and society, declining birthrate, aging society, globalization, and environmental and energy issues. To this end, METI has decided to fulfill the following five new missions to ensure the development trajectory of Japan's economy and society, and to contribute to the further development of the world economy. Specifically,
(1) Take into account not only industry but also the entire economic and social system
(2) Promote innovation that opens the way to a new economy
(3) Reflect diverse values, including those of the elderly, NPOs, and local communities
(4) Conduct integrated domestic and international policy management in the context of domestic and international economic integration
(5) Solve global environmental problems and issues related to aging society with low birthrate"

The "Economic and Industrial Policy Sourcebook 2001-2020," which begins as above, was recently released on the RIETI website. This collection was compiled by Professor Emeritus Haruto Takeda of the University of Tokyo, who has long served as a Faculty Fellow in charge of policy history at RIETI and who was involved in writing the two previous editions of the History of Japan's Trade and Industry Policy (Phase I,1945-79) and History of Japan's Trade and Industry Policy (Phase II, 1980-2000). The source book is a compilation of the history of METI, which was created in 2001, and how it has progressed in response to the demands of the economic and social situations. The collection consists of Part I, a general overview written by Professor Takeda, and Part II, a chronological table of data (changes in priority policies, chronological table of laws and regulations, changes in senior officials, and chronological table of policy history).

Three perspectives required of policy makers

Three perspectives are always required of policy makers.

The first is the "bird's eye view,” which considers the big picture: how the issue at hand fits into the overall government agenda, whether it is important or not, whether supporting one group will upset the balance with other groups, and whether support will have a ripple effect on other groups.

The second is the "insect's eye view," which is an understanding of the actual micro-level situation in order to determine what is happening on the ground, whether policy intervention is necessary, whether the intervention has solved the problem or made it worse, and when such an intervention should be stopped.

The third is the "historian's eye view.” This is an eye that calmly and objectively assesses why an intervention was initiated, whether it was justified, whether previous interventions have been effective, how future generations will judge what is being done now, and whether the direction is correct. The eyes determine how the future will unfold.

Policy history is the ingredient for obtaining this third eye, the indispensable "nautical chart" or "compass" for policy makers. Where we came from, where we stand now, and where we are headed can be understood by studying policy history. As the expression "policy history is the work of building an observatory for the future" (Shuhei Inokai) suggests, if Evidence-Based Policy Making (EBPM), for which RIETI established a research center in April 2022, is about quantitatively understanding the effects of individual policies (= micro), policy history is about looking at policies as a whole and grasping entire policy flows (= general direction, or macro).

Policy history includes both anatomical and physiological studies. While the former analyzes (researches) policy documents, institutions, budgets, etc., the latter analyzes (investigates) who made what decisions and why, mainly through interviews. Although investigations have limited sources of information and testimonies include biases such as "the world from that person's point of view" and "excuses," there is no difference in the importance of both research and investigations.

Yukiko Okuma (2010), who covered long-term care insurance as the first female editorial writer for the Asahi Shimbun, states

“Laws and institutions are much like buildings.
When you step inside, the person who assembled the columns, pitched the roof, or installed the doors is no longer there. The blueprints and scaffolding that were drawn and erased have been put away without a trace.
The long-term care insurance system resembles a shoddily-built house, perilously balanced, on a cliff.
The idea for this system was conceived at a time when the ruling political parties and mass media were dominated by the common belief that spending money on welfare would "crush Japan's economy" and "destroy Japan's beautiful scenery.
The starting point was the cry and desire to do something about the "bedridden elderly" and "nursing care hell," which is not seen in any other developed country except Japan. This, combined with the various agendas of the industrial, medical, and political worlds, led to the formation of a system that, while not ideal, would serve as the foundation for the socialization of nursing care."

Long-term care insurance, which is now taken for granted, was the result of indescribable hardship at the time of its establishment. As the Chinese saying goes, "When drinking water, one should never forget those who dug the well.” Those who manage the building of "laws" and "systems" today have an obligation to know who built them and how they were built.

Utilizing the wisdom of history in discussing New Direction of Economic and Industrial Policies

While the collection of data commends METI's policies as having "played an important role in wiping out the negative legacy of the post-bubble period," it also points out that "the promotion of measures to raise the potential growth rate to put the Japanese economy on a growth trajectory did not easily gain traction. In order to get Japan out of the lost three decades and to put the economy back on a growth track, “New Direction Economic and Industrial Policies” are currently being discussed, and we hope that this collection of data will be useful in related discussions.

As the American philosopher George Santayana said, "Those who cannot remember the past are condemned to repeat it."

June 2, 2022
  • Shuhei Inokai (ed.) (2019), Rashinban toshiteno seisakushi rekishi kenkyu kara healthcare: fukushi seisaku notenbo wo hiraku (Policy History as a Compass: Opening up Perspectives on Health Care and Welfare Policy from Historical Research), (in Japanese) Keiso Shobo
  • Okuma, Yukiko (2010), Monogatari: Kaigo Hoken: Inochino Dignity no Yosei o Mita 70 no Drama (1), (2) (Stories: Long-term care insurance —70 dramas related to dignity of life), (in Japanese) Iwanami Shoten.
  • Odaka, Kounosuke (2013), History of Japan's Trade and Industry Policy (Phase I,1945-1979), Economic and Industrial Research Institute, Japan. Haruhito Takeda (ed.) (2022), "Economic and Industrial Policy Document Collection 2001-2020 – Two Decades of Economic and Industrial Policy," Research Institute of Economy, Trade and Industry (RIETI), (in Japanese) Japan.
  • Watanabe, Junko and Haruto Takeda (2021), “The Industrial Revitalization Policy in the 2000s," RIETI Discussion Paper Series 21-J-030.

June 20, 2022