Priorities for the Japanese Economy in 2020 (January 2020)

Justice and transparency are prerequisites for rational decision-making in governance, but these prerequisites are fading and must be restored

Visiting Fellow, RIETI

Goals of Evidence-Based Policy-Making (EBPM)

Three years ago I started an EBPM study group at the Research Institute of Economy, Trade and Industry (RIETI). Fortunately, outstanding and enthusiastic scholars, administrators, researchers, and practitioners agreed to participate in it. The actual use of EBPM in governance is slowly increasing and recognition of the usefulness of EBPM itself is spreading among government agencies. EBPM aims to promote rational decision-making in the legislative and executive branches, with policies involving goals and means. EBPM establishes a concrete outcome (a meaningful result) in terms of goals and assesses whether or not the means of achieving said outcome, i.e. specific policies, are working effectively. Practically, there are numerous policies for which such an assessment is possible.

Furthermore, policy-making based on subjective assumptions not only lacks effectiveness, but sometimes even brings about significant harm to society, as I previously argued regarding the unintended consequences of Japan's educational policies. One of the goals of EBPM is to reduce the number of post-fact excuses for misgovernment, often labeled as "unforeseen results."

What Comes to Mind When I Think of "2020"

The year 2020 is particularly significant in terms of governance outcomes. I am not talking about the Olympics. In 2003 the Cabinet Office established the "202030" objective. Its goal was for women to occupy at least around 30% of leadership positions in all sectors of society by 2020. Now that 2020 is here, the rate of women in managerial positions in Japan is still barely above 10%. The rate of female elected representatives likewise is 22% in the House of Councilors and only about 10% in the House of Representatives, far below the "202030" goal. Japan is ranked 165 out of 193 countries regarding the participation of women in politics in the World Economic Forum's gender gap index. The "Act on Promotion of Gender Equality in the Political Field," which aims to bring the rate of female candidates for office closer to 50%, was passed in 2018, but in a subsequent election for the House of Councilors, the proportion of female candidates among the governing parties was a mere 15% among the LDP and 8% among the Komeito. Although there is empirical evidence from other countries that the observance of parity laws promotes the representation of women among members of parliament, at the current rate there is no indication that the law's objectives will ever be achieved.

The year 2018 has also demonstrated that discrimination against women has deep roots in our country; by which I mean the discrimination against female applicants to medical universities and departments of medicine. A subsequent investigation by an independent commission showed that until recently, Tokyo Medical University lowered female applicants' test scores to 80% of the actual numbers, Juntendo University established different minimum admission scores for men and women to benefit men, and Showa University generally limited waitlist admissions to male applicants, admitting only a tiny fraction of female applicants from the waitlist. While the objective in each case was the same (i.e. to limit the proportion of successful female applicants), the methods that were used differed from one another. I think that there actually are diverse, cunning methods involved in realizing this objective that violates Article 14 of the Japanese constitution, which guarantees equality of opportunity in society regardless of gender. There are other medical universities and departments of medicine besides the above-mentioned three universities at which the proportion of women among admitted applicants is significantly below the percentage of female applicants. With regards to this problem as well, the passive stance of the government and the Ministry of Education, Culture, Sports, Science and Technology – which concluded that it should be resolved through internal, university-led investigations – appears to be intended to obstruct any sincere attempt to resolve the problem of gender discrimination.

In the year 2019, it was also revealed that government agencies had manipulated numbers to make it look as if the targeted employment rate for people with disabilities had been met, although this was not actually the case. In all of these cases, women and people with disabilities were discriminated against and the authorities, instead of taking steps to eliminate the discrimination, took steps in effect to aid the perpetrators. The fact that discrimination carried out in secret undermines the dignity of the victims and generates even greater feelings of powerlessness than open discrimination is a fact that should be inscribed in the heart of everyone at medical universities, departments of medicine and government agencies.

What It Will Take to Achieve Justice and Transparency in Governance

In light of these facts, it is necessary for EBPM to consider that the very premise upon which policy systems must be based, namely that they are based on justice, does not always hold currently in Japan. Even when excluding cases such as the ones described above, in recent years there have been many policies for which it is questionable whether they were decided in a fair and rational manner. Take for example the privatization of water supply operations. It is likely that public expenses will indeed be reduced through privatization, but given that there have been many unsuccessful cases abroad in which water fees skyrocketed or water quality dropped due to privatization, it is difficult to stop feeling that policy-making in this case has been slipshod. Furthermore, in the case of the data falsification connected to the Ministry of Health, Labour and Welfare's monthly employment statistics, it is yet unclear how a government agency came to make such a significant falsification. It distorted wage statistics by making changes that were unjustifiable from the perspective of statistical methodology, such as changing the census of large-scale business offices in the Tokyo metropolitan area to a sampling of just one-third the size without making statistical adjustments for the change in sampling weights. Moreover, even after the mistake was noticed and the relevant statistics were since changed, this fact was not made public, and the previous, biased statistics were left uncorrected. Instead, the agency behaved as if there had been no improprieties or mistakes, which is behavior entirely inappropriate for a government agency.

In general, it is more difficult to evaluate justice than rationality. One criterion for justice is whether something violates the spirit of the constitution, but in our country there is virtually no discussion of whether policies adhere to the spirit of the constitution outside of Article 9, and there is much room for improvement in this regard. As with the cases of water supply privatization and falsifying statistics discussed above, there are many other cases for which it is questionable whether decisions were made in a rational manner, undermining fairness and accountability in this regard as well. What is important in such cases is the transparency of decision-making. Transparency means that there is sufficient debate and evaluation at the policy-making stage and that the people – the actual, intended sovereign power in a democracy – can be informed of the content of what is being decided.

Actually, there is something relevant to this point that I have been extremely worried about for a long time, which is the Japanese government's practice of redacting even the simplest documents before release. It is a fact that when opposition MPs or lawyers representing private organizations and the like request official, non-confidential documents relating to governmental institutions, they receive documents with many parts redacted, making the particulars incomprehensible. I have never seen such extensive redacting of official documents in the United States. In the U.S., official documents are classified by level of secrecy. Only documents relating to national security are categorized as "top secret," "secret," or "confidential" and exempted from general publication. For example, military secrets or national security-related documents fall into these categories. There are also documents that are classified as "restricted" or "official use only." The former category consists of documents whose accessibility is restricted because releasing them to the general public could cause harm, for example because they contain private or personal information that must be protected, while the latter category refers to documents which pertain exclusively to internal government affairs, such as deliberations on internal personnel decisions, and for which there is hence no need for public release. Apart from these exceptions, the majority of official documents can in principle be made public in their entirety, and even when there are restrictions on their publication, the reasons should be clearly specified. On the other hand, redacted documents in our country are affected by the vagueness of Japan's Law on Public Information Disclosure, in particular regarding the applicability of reasons for not disclosing information. One specific problem is that Article 5, Paragraph 1, Item 5 of the Law on Public Information, establishes as one reason for withholding information related to internal government deliberations and evaluations, that it is acceptable not to disclose "materials whose publication may improperly jeopardize frank exchanges of opinion or the neutrality of decision-making, improperly create confusion among the public, or improperly bestow advantages or inflict harm on specific persons." These restrictions violate the spirit of the constitution. The sovereign, the people, have the right to know about administrative decision-making regarding domestic policy and it is outrageous to shift blame onto the population and justify withholding information by claiming that it "may improperly create confusion among the public." Moreover, the reasoning that something "may improperly jeopardize the neutrality of decision-making" lacks clarity. Even if a policy created for the benefit of the public, which is supposed to also be fair, were to hypothetically benefit one part of the population and incur costs for another, as in the case of redistributive policies, government agencies have the responsibility to account for the fairness of such a policy to the public, and to withhold information from the public based on reasoning that it, for example, "would jeopardize neutrality" or "might cause confusion among the public," but actually out of fear of public criticism, likewise violates the sovereignty of the people.

Speaking of neutrality, whether it is discrimination against women in university entrance exams or falsified government statistics, the principle of excluding parties with conflicts of interest, that is considered absolute in the United States and many other countries when selecting members of independent commissions investigating suspected wrongdoing, is not observed in our country. Is this not a clear violation of the principle of neutrality? As in the cases of discrimination against women and people with disabilities, using experts solely for the appearance of "taking the electorate's opinions into account to govern fairly" is not only irrational, but an offense to professional expertise. I therefore believe that we should revise the Law on Public Information Disclosure to make it obligatory to disclose information to the general public, while maintaining similar exemptions in the case of information of a private or personal nature that is unrelated to official government work and information related to national security, as is done in the United States and many other countries; to preserve information in the form of government documents relating to proposals, records of proceedings, approval notices, etc., regarding governmental deliberations and evaluations pertaining to domestic policy, in particular when connected to the use of tax revenue, for long periods; and to make it mandatory to unconditionally disclose such documents to the public when requested. The exclusion of parties with conflicts of interest from investigative commissions examining government affairs should likewise be codified into law.

Towards Governance that does not Jeopardize Rationality, but Benefits Society

Regarding both the general use of human resources in society and the use of expert opinions in governance, if only people that align with pre-determined goals are selected without sincere examination of their justice and rationality, this country can no longer hope for a rational future, either in terms of society or in policy and administration. The number of administrative career track college graduates applying to regular civil servant positions (the former type I) has supposedly decreased lately. Young people's mistrust in governance is a healthy response to a recent chain of events in which the lack of justice and transparency of governance has been called into question. If this state of affairs continues, the quality of civil servant personnel will deteriorate as well. But it is not too late to make improvements. We must achieve justice and transparency in governance and return to a healthy state of rational debate based on these factors. Though there is little hope for achieving the "202030" target, I sincerely hope that 2020 will mark the first confident step towards fair, accountable, and transparent governance. This means achieving a society in which we will no longer encounter redacted official documents and the like. Otherwise EBPM, which pursues rationality in governance, will be little more than window dressing and the talents of outstanding scholars and administrators with a strong interest in EBPM will likely be wasted. I also strongly fear that in a broader sense Japan is in the process of becoming a society with excellent human resources that are not likely to be utilized and urgent actions like those mentioned in this column are necessary to prevent this from occurring.

December 20, 2019

April 17, 2020