RIETI Report March 25 2022

Establishing EBPM in Japan – The benefits of using nudges

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Welcome to RIETI Report.
This bi-weekly newsletter will keep you updated with the recent columns, event information and research results by RIETI fellows and other leading economists in Japan and around the world.

In this edition, we present topics related to evidence-based policy making (EBPM). We interviewed Fumio Ohtake, who has played a leading role in RIETI’s EBPM research from the start. He has answered various questions, including how EBPM should be used to respond to life-threatening crisis situations such as COVID-19.
We hope you will enjoy it. If you have any feedback, we would love to hear from you.
Editors of RIETI Report (Facebook: @en.RIETI / Twitter: @RIETIenglish / URL: https://www.rieti.go.jp/en/)

This month's featured article

Establishing EBPM in Japan – The benefits of using nudges

OHTAKE FumioFaculty Fellow, RIETI

Making policy proposals based on objective data is a crucial mission for RIETI. Four years ago, we launched an evidence-based policy making (EBPM) research project. Has the EBPM approach become established in Japan during the past four years? How should EBPM be used to respond to life-threatening crisis situations such as torrential rain disasters and COVID-19? We asked Fumio Ohtake, Specially Appointed Professor at Osaka University and member of the Japanese government's Advisory Council on Countermeasures against Novel Influenza and Other Diseases, who has played a leading role in RIETI's EBPM research from the start.
Interviewed by SABURI Masataka (Director, International Coordination and PR Strategy, RIETI)

Please tell us about the EBPM research you have undertaken at RIETI so far.

At RIETI, we have held research meetings on evidence-based policy making (EBPM) for the past four years. We also hold annual symposiums. The primary purpose of the research meetings has been to establish the EBPM approach to policy in Japan. Before that, however, we had to begin by defining what EBPM means. The Japanese government had previously carried out policy assessments, but these were focused on assessing whether budgets were allocated and used in accordance with the original plans. Yet the essential purpose of policy assessment should be to ascertain whether or not the established policy goals have been achieved. In other words, policy assessment should include outcomes, which measure the results of policy goals, and outputs, which measure the effectiveness of the projects themselves. However, we found that in many cases it was not outcomes or outputs that were being assessed, but rather inputs; that is, whether the project had been implemented according to plan. We therefore started by establishing a common understanding of goal setting for outcomes and outputs. To begin with, in many cases we found insufficient explanation, based on scientific knowledge and evidence, of the logical mechanisms that would cause a policy input, say Project A, to lead to the desired outputs and outcomes. This was the first step toward establishing EBPM as a general approach.

Next, we were faced with the problem of how to measure the effectiveness of a policy. This was often measured by comparing the situation before and after the policy was implemented, but this does not constitute an accurate policy assessment in terms of the causal inference approach used in fields such as statistics and economics. When testing the effectiveness of a particular policy, it is crucial to compare the results after policy implementation with counterfactual assumptions regarding what the situation would have been like if the policy had not been implemented. During the initial research meetings and symposiums, we therefore aimed to define the goals of EBPM, and to establish general methods for evaluating policy effectiveness. I feel that this approach is now beginning to sink in.

We also considered that it would be beneficial for those entrusted with policy implementation if we provided specific, practical examples in addition to evaluation methods. Through RIETI research meetings, symposiums and other forums, we have provided EBPM case studies across a range of fields such as education and disaster prevention, as well as COVID-19 countermeasures, which we presented at the symposium in December 2021.

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