Establishing EBPM in Japan – The benefits of using nudges

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.

To read the full text
https://www.rieti.go.jp/en/special/policy-update/102.html

"Policy-Making for a Better Society"
by KONDO Keisuke (Senior Fellow, RIETI)
https://www.rieti.go.jp/en/columns/s20_0009.html

"Using Nudge as Entry Points for EBPM!"
by KOBAYASHI Yohei (Consulting Fellow, RIETI)
https://www.rieti.go.jp/en/columns/a01_0535.html

"Policy Evaluation Program: Evidence-Based Policy Making"
by KAWAGUCHI Daiji (Faculty Fellow, RIETI)
https://www.rieti.go.jp/en/special/policy-update/091.html

"Unemployment Gap between Long-term Immigrants and Natives in Japan: Considering Heterogeneity Among Immigrants from Asia, the U.S. and UK, and South America"
by LIU Yang (Fellow, RIETI)
https://www.rieti.go.jp/en/publications/summary/22030021.html

"Fixed Costs in Exporting and Investing"
by Youngmin BAEK (Fukuyama University) / HAYAKAWA Kazunobu (Institute of Developing Economies)
https://www.rieti.go.jp/en/publications/summary/22030020.html

"Spatial Gaps in Minimum Wages and Job Search of Young Workers"
by HAMAGUCHI Nobuaki (Faculty Fellow, RIETI) / KONDO Keisuke (Senior Fellow, RIETI)
https://www.rieti.go.jp/en/publications/summary/22030017.html

"Impacts of Firm GVC Participation on Productivity: A Case of Japanese Firms"
by URATA Shujiro (Faculty Fellow, RIETI) / Youngmin BAEK (Fukuyama University)
https://www.rieti.go.jp/en/publications/summary/22030015.html

"Exchange Rate Pass-through Under the Unconventional Monetary Policy Regime"
by YOSHIDA Yushi (Shiga University) / Weiyang ZHAI (Shiga University) / SASAKI Yuri (Meiji Gakuin University) / Siyu ZHANG (Meiji Gakuin University)
https://www.rieti.go.jp/en/publications/summary/22030014.html

"The Effects of Trump's Trade War with China on Japan's Trade"
by ITO Tadashi (Gakushuin University)
https://www.rieti.go.jp/en/publications/summary/22030011.html

[List of discussion papers]
https://www.rieti.go.jp/en/publications/act_dp.html

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