Module: Public Management and Organization Development … · Public Management and Organization Development Sub-Module2 Decision Making and Policy Formulation 2. Reforming the Policy

Module: Public Management and Organization Development

Sub-Module2 Decision Making and Policy Formulation

Contents

Introduction 1

1. Decision Making and Policy Formulation: The Individual versus the Group 1

2. Reforming the Policy Process and Political and Administrative Institutions 2

I. Theoretical Models of the Decision-making Process 3

1. The “Rational” Model: Decision Making as Intellectual Process 3

2. The “Social” Model: Decision Making as Collective Process 4

3. The “Mechanical” Model: Decision Making as Organizational Process 5

4. The Importance of a Composite View 6

II. Characteristics of Decision Making and Policy Formulation in Japan 6

1. The Ringi System of Decision Making: Building Consensus 6

2. The Four Types of Organizational Culture 8

3. Mutuality: The Cornerstone of Organizational Culture in Japan 9

III. How Policies Are Structured; the Policy Cycle 10

1. How Policies Are Structured 10

2. The Policy Cycle 12

IV. Policy Formulation and the Capacity It Requires 14

1. The Four Types of Policy Formulation 14

2. Strengthening Policy-formulation Capacity 17

3. Policy Formulation and Institutional Culture 18

Conclusion 20

Tables and Figures

Figure1. Four patterns of organizational cultures 8

Public Management and Organization Development Sub-Module2 Decision Making and Policy Formulation

Sub-Module2 Decision Making and Policy Formulation

Introduction

1. Decision Making and Policy Formulation: The Individual versus the Group

Decision making is often spoken of as an almost mysterious process that the likes of

presidents and prime ministers engage in, especially on the diplomatic stage. But for all

individuals, whether they are aware of it or not, life is one long series of decisions.

During your daily routine, whether in sports or shopping, minor decisions are constantly

being made. When you feel sick, even getting out of bed can require considerable

determination. Choosing a career or a marriage partner is, when you come to think of it,

a crucial decision in life. Even if you are so completely at a loss that you make no decision

in the end, that in itself is a choice that will shape your future. Groups and organizations

can likewise be seen as engaged in making an endless series of decisions. In the case of

local government, the region’s future is molded by the cumulative decisions it makes.

Policy formulation for its part tends to be regarded as the exclusive preserve of

central-government bureaucrats and the local-government elite. But consider the

question of, say, who builds a car in an automobile plant. The answer, you will realize, is

not that straightforward. Manufacturing a car is a collaborative enterprise that involves

designers, engineers, and factory workers as well as the company’s top brass. Likewise,

the public policies of central and regional governments are normally formulated through

a time-consuming process of cooperation and negotiation involving numerous actors.

Some government employees will no doubt protest that they have nothing whatsoever to

do with formulating policy; but their supervisor might point out that “if only you’d tried

harder to be innovative, we’d probably be tackling a more challenging project right now.”

Whether conscious of the fact or not, the members of an organization and the various

groups that make up the political scene contribute in many ways to molding public policy.

The term decision making is often used with reference to instantaneous choices on the

part of the individual, while policy formulation generally designates a collective,

institutional process that takes time. But the difference between the two is relative.

Policy formulation is a matter of aggregating the various decisions made by all the many

individuals concerned. Conversely, when leaders hand down decisions, they first sift

through the views of numerous groups and individuals and take into consideration a

variety of factors. Bismarck remarked that his head was like a republic, where many

points of view competed.

- 1 -


2. Reforming the Policy Process and Political and Administrative Institutions

Both decision making and policy formulation take place in a fixed institutional setting.

Each branch of government is delegated certain powers; the mayor and senior officials

possess responsibilities commensurate with their position; the assembly has set

procedures for reviewing and approving legislation, statutes, and budgets. Recently

procedures for obtaining the input of ordinary citizens have also become institutionalized.

Hence an accurate understanding of the decision-making and policy-formulation process

is impossible without an understanding of the system that underpins it.

Metaphorically speaking, the policy process can be thought of as a train route; political

and administrative institutions then become the tracks along which the train runs. Tracks

are not very exciting, but they constitute essential infrastructure nonetheless, without

which the train can go nowhere. Policy changes and innovation are like bringing in new

rolling stock; institutional reform is like changing the gauge of the railway or relaying the

tracks, so it happens a good deal less frequently. Altering the constitution and the basic

framework of the nation’s institutions used to be a rare undertaking in Japan; but lately

the country has been busy decentralizing authority, bolstering the powers of the cabinet,

establishing a freedom-of-information regime designed to guarantee the public’s right to

know, and overhauling the civil service. All of these are basic institutional changes that

affect the very foundations of government, and it is in the context of this dynamic

transformation that the policy process needs to be understood. The term policy

encompasses more than merely government action in specific fields like welfare, urban

development, and education; it also includes strategies for overhauling a country’s basic

institutions.

The institutions and practices that have over the years taken root in a country or

organization are often thought of as part and parcel of its culture. Institutional changes

such as Japan’s postwar reforms and rewriting of its constitution commonly bring cultural

changes in their wake, forcing people to modify their values and patterns of behavior.

Politics and public administration today are being buffeted by global changes, and not

just in Japan either. Governments are finding themselves with no choice but to overhaul

not only specific policies but also their basic institutions, and because that in turn entails

cultural changes, immense difficulties often present themselves in the process.

Institutions are living, breathing organisms within society; hence those involved in

overhauling them need to have a thorough understanding of and insight into their

ecology, mentality, and motives for resisting change.

This chapter opens by presenting a set of theoretical models of the decision-making

- 2 -


process; in light of these it then examines, from a cultural perspective, the characteristics

of decision making and policy formulation in Japan. Next, it analyzes how policies are

structured, describes the policy cycle, and considers the capacities required of those

engaged in the task of policy formulation. Finally, it discusses the question of

collaboration between government and citizens in the implementation of policy and the

evaluation of its outcomes.

I. Theoretical Models of the Decision-making Process

Many theoretical models of the political and administrative decision-making process

exist; particularly famous among them is the set of models presented in G. Allison’s study

Essence of Decision, which analyzes how decisions were taken during the Cuban missile

crisis. The introduction to this work quotes J.F. Kennedy’s remark, “The essence of

ultimate decision remains impenetrable to the observer…often, indeed, to the decider

himself.” These words capture in a nutshell the mysterious, multifaceted nature of the

decision-making process. Allison presents three models of that process, which we here

describe with slight revisions.

1. The “Rational” Model: Decision Making as Intellectual Process

The most basic, and the least sophisticated, model of decision making sees it as a

rational process undertaken by an individual, typically a political leader, who intellectually

analyzes the options available. According to this view, decision making is about selecting

the most effective, efficient course and means for accomplishing a particular objective or

solving a particular problem. A case in point would be a decision by a political leader to

boost the police presence on the streets by increasing patrols as a way of keeping the

community safe and stemming the rising tide of crime. Various other approaches to

ensuring public safely and fighting crime spring to mind — publicity campaigns,

public-awareness programs, imposing harsher penalties, building stronger communities;

but in our example, increasing the number of police is chosen as the best way to get

results in short order, even if it does entail considerable costs.

Here the question arises of how thoroughly the various options available, along with their

respective benefits, were rationally analyzed and compared. Decisions are not reached

automatically through a purely scientific process. Publicity campaigns and

public-awareness programs come a good deal cheaper than more police; nonetheless,

these options were rejected in favor of the latter because the calculation was made that,

in the political arena, safety trumps cost considerations. The decision-maker thus

becomes accountable on two scores: first, he must be able to explain, citing objective

- 3 -


data and information, how he assessed each of the several options available; second, he

must be able to justify his subjective judgment of which values to give priority to.

This view of decision making can be labeled the “rational” model.

2. The “Social” Model: Decision Making as Collective Process

But government leaders do not always make decisions on the basis of such purely

intellectual considerations. Because they constantly encounter resistance from within

their own organization and pressure from society at large, they are forced to compromise

and make decisions in a less than rational fashion; at least, that is how many

stakeholders perceive things. Because decision-making involves a host of actors

negotiating and influencing one another, it may be seen as more a collective process

than a rational one, more a social process than an intellectual one.

Here is a case in point. In 1978 the Japanese government was considering adding the

F15 fighter to the country’s arsenal under a new defense policy. That plan provoked a

vociferous backlash from the opposition in connection with Article 9 of the constitution,

whereby Japan had renounced war, and it only won parliamentary approval on condition

that the aircraft would not come fitted with in-flight refueling systems and other such

vital equipment. Experts scoffed that the government was spending an awful lot just to

let pilots go on a joyride. From a rational standpoint, if the government was going to

purchase the fighters, it should have fitted them with all the equipment they needed to

perform the job they were designed for; if it was going to pass on that equipment, it

should simply not have bought the aircraft in the first place.

In the case of local-government policy, what actors take part in the decision-making

process? The head of the local government and its senior officials are almost always

involved; the local assembly also plays a part in that it gets to deliberate on the budget

and statutes. The assembly is typically divided into political groupings and parties, which

if opposed to the current mayor or governor tend to adopt a critical stance to virtually

every proposal put before them. Government employees and unions are also key players,

and even a mayor or governor will think twice before proposing a policy that will meet

with strong opposition from them or infringe on their vested interests. That is why staff

cuts and civil-service reforms invariably run into major obstacles. In that sense hiring

more police offices is much easier than paring down their numbers.

To turn now to society at large, the community too has a multitude of actors. For

example, citizens and citizens’ groups concerned about children’s education, such as

PTAs and youth action councils, often spearhead demands that the local government

- 4 -


take measures to make the community safer. Liberal citizens’ groups, on the other hand,

wary that increased patrols could usher in a Big Brother society, are likely to call for a

different approach to preventing crime. Citizen ombudsmen, whose job is to look out for

government waste, tend to be critical of any increase in the number of government

employees. The collective or “social” model of decision making and policy formulation

sees them as the process of reconciling the interests of this medley of actors by

computing their “vector sum,” as it were.

3. The “Mechanical” Model: Decision Making as Organizational Process

Another view holds that in most cases decision making occurs almost automatically

within a set framework of institutions and rules. According to this view, while it may

appear that a wide range of actors provide input, with the leader making the final

decision, their actual impact on the process is negligible; the real decision is made

virtually automatically within the framework of the established order: budgetary ceilings,

number of personnel available and their abilities, set procedures, the need to conform to

precedent. For a specific example, consider the question of why Japan cannot break the

habit of building completely useless highways. The underlying problem is that the

government has only a limited repertoire of policies available to it. No matter how much

sense a new policy makes, and how many groups support it, it cannot easily be

implemented if it threatens to alter the established order or affect vested interests.

One of the pillars that make up the established order is the bureaucracy. The

bureaucracy is nothing more than a collection of individuals and the rules they operate by,

but it exerts an influence on the political process as if it were a living, breathing organism

endowed with a mind of its own. It utterly rejects any diminution of its own powers,

funding, and organization, and exhibits a marked antipathy to reform. The decision to

increase the number of police officers cited above can be interpreted as a mere case of

rubberstamping the police force’s own inexorable expansion. Another pillar of the

established order is the so-called policy community, consisting of administrative organs

and interest groups active in a specific field, plus politicians; these three are often

referred to sarcastically as the “iron triangle.” At the national level, the strength of the

bonds between officialdom, industry, and the politicians in such areas as public works,

healthcare services, and financial regulation elicits frequent comment; the same pattern

of ties is to be observed at the local-government level as well, where it hampers

innovation and policy changes.

This model of decision making can be referred to as the organizational or “mechanical”

model, a term highlighting the fact that free, open thinking and negotiation are

- 5 -


discouraged. The preceding account paints a largely negative picture; still, making

decisions mechanically is an efficient way for local governments to plow through the vast

amount of work they must deal with every day. Too much time and energy would go to

waste if every decision had to be thought through and haggled over. Mechanically

performing routine administrative tasks is a valid method as long as careful thought and

broad-based input have gone into framing the relevant policies and designing the overall

system.

4. The Importance of a Composite View

The above three theoretical models are intended merely to provide several standpoints

from which to conduct analysis; they are, in the terminology of Max Weber, “ideal types.”

To understand how decision making and policy formulation are conducted in the real

world, it is necessary to consider all three models in combination. Examine a specific

instance of a decision being made, and you will discover that the process is like a thread

in which all three strands are intertwined: rational thought, collective negotiation,

mechanistic outcomes resulting from the sheer inertia of the established order. And a

glance at the interest groups at the bargaining table will reveal that while their leadership

may think matters through rationally, the mechanical model sometimes also applies. It

should not be forgotten that a theoretical model is simply a tool for observing reality

more accurately.

Another important point to note is that these models are to a greater or lesser extent

each linked to a specific set of values. The rational model of decision making is

predicated on the normative assumption that rational thought is the key to reaching the

right decision, and every decision should be capable of logical explanation. The social

model, rooted in the ideals of American liberal democracy, reflects a belief in the

desirability of a plurality of players freely participating in the decision-making process.

The mechanical model is rooted in the bureaucratic mindset, which puts efficiency first.

So which is most important — intellectual insight, broad-based participation, or

efficiency? For public administrators, that is a universal question that goes to the very

heart of what they do. The choice of which approach to emphasize and espouse is in

itself a political value judgment.

II. Characteristics of Decision Making and Policy Formulation in Japan

1. The Ringi System of Decision Making: Building Consensus

A method of decision making characteristic of Japanese bureaucratic institutions at both

the national and local levels is what is called the ringi system. This is a system for

- 6 -


achieving consensus under which a junior member of staff in charge of a certain file (say

rebuilding an elementary school) draws up a written proposal on how to proceed with

the matter; that proposal is then passed up the hierarchy, and once it has obtained

approval from all concerned, it gets the final authorization from the mayor or a senior

official such as the director of the division. All who approve of the proposal apply their

seal in the prescribed column; in the case of a matter that straddles a number of

departments, several dozen seals of approval may be required. In some instances a

supervisor may instruct that modifications be made, in which case the proposal is

redrafted and recirculated. The ringi system is widely used in all fields of public

administration, including public corporations, except the military and foreign policy; it

was also once used in the private sector.

In the literature on public administration, the ringi system tends to come in for criticism.

Kiyoaki Tsuji, for example, identifies several problems with it. To begin with, it is a

time-consuming, inefficient way to reach decisions. That makes it completely unsuitable

for the military, foreign policy, or business, where on-the-spot decisions are essential.

Staff opposed to a certain proposal will often sabotage it letting it linger on their desk for

a while. Second, responsibility is diffused. The person at the top of the hierarchy, who is

supposed to assume ultimate responsibility, is often so busy that he or she will simply

check that all the seals are there and then mechanically give the go-ahead. If a proposal

requires seals of approval from twenty officials, then each of them will feel only

one-twentieth of the responsibility. Third, the ringi system hinders effective leadership.

Innovation in the policy arena is a matter of changing the ingrained ways of an

organization and overcoming the vested interests within it, and it is not likely to win

approval if required to obtain unanimous consent. In today’s age of reform, the person at

the top needs to be able to send innovative ideas down the hierarchy for consideration.

As long as the ringi system is retained, reform can make little headway.

But these scholarly criticisms of the ringi system are countered by those who have

experience of it in the real world. They point out that widely varying procedures are

followed depending on the importance of the matter at hand; in the case of particularly

critical decisions, unfettered debate takes place within the organization, even if the ringi system is formally adhered to. Though the name on the actual proposal may be that of

someone from the lowest echelons of the organization, the idea often originates with a

senior official or middle management, and it is put into written form only after it has

been freely discussed face to face by all concerned. Major decisions that straddle several

departments are thrashed out and revised at repeated meetings, and only once a

general consensus has been reached among all concerned is a proposal circulated as a

- 7 -


formality in conformity with the ringi system.

The ringi system, then, cannot really be described as the quintessentially Japanese

method of decision making, and Tsuji’s criticisms are not always on the mark.

Nonetheless, whether the ringi procedure plays a substantial role in reaching a decision

or is just a formality, no one would deny the Japanese tendency to value consensus

within the organization. To the casual observer, bureaucratic organizations in Japan

present the appearance of a hierarchical pyramid, but in actual fact any member can

participate in their institutional life, offer input, and even in effect exercise a veto over

their decisions. Young people on staff are often encouraged to submit policy proposals,

and they enjoy the right to express their views freely as members of the organization. In

essence, a kind of egalitarianism prevails. The collective, social model of decision making

outlined in the previous section is thus in operation. To underline this point, it will be

useful to examine the typology of organizational cultures.

2. The Four Types of Organizational Culture

According to Christopher Hood, who does comparative research on public

administration in different countries, organizational cultures can basically be classified

into four patterns, which are determined by two axes: the intensity of pressure from the

“group,” and the rigidity of the “grid” (i.e., societal norms and rules) within which the

culture operates. Those four patterns are: (1) the hierarchist style, which is high on both

axes; (2) the egalitarian style, which is high on the group axis but low on the grid axis;

(3) the individualist style, which is low on both axes; and (4) the fatalist style, which is

high on the grid axis but low on the group axis. The chief approaches to managing these

four types of cultures are, respectively, (1) oversight, (2) mutuality, (3) competition, and

(4) contrived randomness.

Figure 1: Four patterns of organizational cultures

↑high on the grid

(4) Fatalist

<contrived randomness>

(1) Hierarchist

<oversight>

(3) Individualist

<competition>

(2) Egalitalian

<mutuality> ← low on the group ↓low on the grid → high on the group

- 8 -


We shall not delve further into Hood’s theory. Suffice it to say that while a country or

organization may exhibit a dominant pattern, the other patterns will exist alongside it: a

composite is the norm. Also note that, although culture tends to be thought of as

something immutable, bureaucratic organizations in fact receive a constant infusion of

fresh elements; hence these patterns are dynamic rather than fixed. Institutional

reforms will thus be more effective if their aim is to create a hybrid organization where

the dominant pattern is supplemented by extraneous elements than if they attempt to

transplant a completely new pattern in place of the old one.

The NPM reform model that has spread across the globe from Britain and the U.S., for

example, is individualist in that it pushes for more competition, but it is hierarchist in that

it emphasizes third-party evaluation and calls for the setup of a bevy of administrative

watchdogs; it may thus be considered a hybrid of the two styles.

3. Mutuality: The Cornerstone of Organizational Culture in Japan

When this framework is applied to Japan, all four patterns can be found to a greater or

lesser extent. First, Japanese political culture historically exhibits a definite hierarchical

streak: the government has traditionally been viewed as standing far above the humble

masses, and people have tended to look up to it with respect. Secondly, Japanese culture

also has a deep vein of egalitarianism and mutuality exemplified by the collectivism of

Japan’s organizations whether in the public or private sector; ideally, those organizations

function like one big happy family. Third, the Japanese are keenly competitive owing to

the high value placed on education since the Meiji period, and after the War Western

ideas about individualism flowed into the country. Fourth, as Inazo Nitobe observed, the

Japanese possess a philosophical, fatalistic outlook on life that results from the blending

of the bushido mentality with Buddhist ideas.

But when Japan is viewed in an international context, its most characteristic cultural

pattern is seen to be that of mutuality, which reveals itself at every turn. Mutuality

demands that people identify closely with, and make a strong commitment to, the group

to which they belong; on the other hand, it is much less concerned with differences of

age, sex, and position, and it is lax about ethical standards and rules. As hardly needs

pointing out, the ringi system described earlier testifies to the importance attached in

Japan to mutual compromise and consensus building within the organization.

The practice of “administrative guidance” peculiar to Japan is predicated on close mutual

ties between the government authorities and the industries they oversee. Administrative

guidance refers to the practice whereby government agencies, though not officially

- 9 -


empowered to do so, informally regulate companies and give them a guiding hand in the

full expectation that they will comply; this would not be possible without routine mutual

contact between the two sides. The iron triangle linking the bureaucracy, business, and

politicians and the practice of “descent from Heaven,” whereby retired government

officials take new, high positions in the very companies and organizations that they were

previously responsible for regulating, are two further manifestations of Japan’s

mutualistic culture. And a strong sense of identity with one’s ministry or department is

the reason for the compartmentalism characteristic of Japanese bureaucratic institutions.

But these examples are all on the negative side. The strength of mutuality lies in the

teamwork that it fosters. Employees all work together in the same huge office, so they

can easily share information, see what work the others are engaged in, and get a sense

of how busy they are. When an important project is being planned or a major event held,

everyone works together, helping each other out and dividing up duties flexibly among

themselves. It is not at all uncommon for people to work overtime in large numbers until

late into the night. Tasks that would be daunting to attempt on your own become

manageable when tackled in a group. The whole staff of a department will often go out

for dinner and drinks together; on such occasions people will sometimes completely let

down their guard and say what is really on their mind (honne). Such socializing

reinforces bonding in the workplace and enables teamwork to proceed more smoothly.

Mutuality fires up individual staff members with a sense of mission and strengthens

solidarity among them.

Of course, Japanese local-government organizations take many shapes and sizes, but

this cultural pattern constitutes one set of values they all share. It forms the institutional

rails along which a host of policies have passed on their journey to implementation. In

the 1950s and 1960s, it was this mutualistic approach to organizational management in

both the public and private sectors that underpinned the country’s rapid growth. Today,

however, the Japanese may have become more individualistic.

III. How Policies Are Structured; the Policy Cycle

1. How Policies Are Structured

A policy can be defined in brief as a set of guidelines for action followed by an individual,

group, or organization in order to achieve a certain goal or solve a certain problem. Here

we focus on government policy, particularly public policy as formulated and implemented

by local governments. Mayoral pronouncements such as a commitment to “building a

community in partnership with citizens” or instructions to “keep meetings to within one

- 10 -


hour” can also be considered forms of policy; but public policy as normally understood

includes the following elements.

To begin with, a policy must have a specific objec ive, often several of them. Laws and

ordinances in many cases explicitly state what their objective is, but some objectives are

not set down there. For example, in 1974 the city of Mitaka adopted Japan’s first statute

on community facilities, the Mitaka Community Center Ordinance, which in its preamble

mentions the goal of “building a more pleasant, livable community” and talks of “citizens

nurturing their own community.” Public facilities like these are easy for the government

to justify when explaining its plans: they can also serve as a place to implement, say,

recycling awareness programs, and if an earthquake or other disaster strikes they can

provide a place of refuge. Some facilities have a hidden objective, being a way to create

jobs though public-works projects so that the mayor can get reelected. In any case,

policies have objectives, the chief of which need to be stated explicitly in writing.

t

Next, a policy needs to have an implementer and a target. Who is the department or

agency that executes the program, and what individual, group, natural entity, or

whatever is it targeted at? Both are key elements of any policy. The policy objective will

be couched in abstract terms — “to improve the well-being of local residents,” “to

ensure the safety of the community,” “to create an attractive cityscape.” But specific

steps by which to achieve that objective cannot be taken unless the policy’s implementer

and target are clearly specified. Take cityscape development, for example, a fairly new

policy field. The specific form that the policy assumes can vary tremendously. The

authorities may simply conduct an awareness campaign and upgrade roads and public

facilities; they may tell building owners to remove unsightly billboards; or they may

impose restrictions on everyone from developers to ordinary citizens.

The implementer of the policy — the department that will spearhead it — needs to be

identified right from the planning stage; otherwise you could well end up with a

nobody-in-charge situation where it is unclear who exactly is supposed to be carrying out

the policy, however excellent it may be. If the policy relates to cityscape development,

for instance, it will be necessary to determine whether the urban planning department is

enthusiastic about the idea, and whether its staff possess the requisite time, knowledge,

and experience. If two or more departments are involved, care must be exercised to

prevent them from duplicating functions or becoming embroiled in a turf war.

Third, executing a policy requires resources and methods. Funding is invariably a key

factor that can help make or break a policy. Securing new funding in the budget requires

- 11 -


the backing of the mayor or governor and the assembly; thus a web of cooperative ties

within the organization is in itself an intangible resource. The subject of organization and

staff has already been addressed, but if extra manpower or the cooperation of experts is

needed, funding is the sine qua non. Information and knowledge can also determine a

policy’s success or failure. Routine information gathering — monitoring action taken in

other jurisdictions, listening to accounts of their experiences, collecting data, soliciting

expert opinion — makes a big difference.

Many methods of policy implementation are available. It needs to be decided, on the

basis of the organization’s ability and experience, whether to impose formal restrictions,

provide informal guidance, take a subsidy-based approach, or whatever. If conserving

green space is the task at hand, for example, there are several conceivable approaches:

restricting unfettered development, providing guidance to farmers and requesting the

cooperation of factory owners, giving subsidies to protect trees on private land — all

measures that fall within the bailiwick of either the urban planning or industry

department. Planting trees on public-school grounds would also be an effective method,

though in that case the local board of education, which is independent of the mayor’s

office, would need to move into action.

Thus transforming a policy from a mere pious wish to a concrete plan of action requires

that it incorporate many elements, including an objective, an implementer, a target,

resources, and methods. These elements, moreover, need to be planned for together as

forming an integrated, interrelated whole, rather than considered in sequence each on

its own.

2. The Policy Cycle

Viewed chronologically, a policy passes through a cycle of three stages: planning,

implementation, and evaluation. Let us examine this cycle in greater detail. At the policy

planning stage, the governor, the mayor, or a senior official identifies a challenge or

problem that needs to be addressed. This process, which might be called defining the situation, is of absolutely crucial importance, even if the language used is straightforward

enough. Policy planning invariably begins with sizing up the situation and putting it into

words — for example, “community safety is now under threat” or “the drop in birthrate

has reached the critical stage.” Indeed, in one way this is the phase of the policy process

where political leadership is most essential. At the same time, it involves gauging the

progress of previously implemented policies and programs and thus forms the tail end of

an earlier iteration of the cycle: implementation → evaluation → planning.

- 12 -


Policy planning begins once the local government has more or less determined the

problem to be addressed and defined an objective. As will be noted in the next section,

however, development of a completely new policy is a rarity; in most instances existing

policies are modified or existing programs altered and expanded. What normally

happens, then, is that a particular department that is already conducting a policy

focusing on a specific target will overhaul that policy in light of experience. At any rate,

the policy-planning team will include the policy implementer itself, which after all can be

expected to have an intimate knowledge of the field in question.

Take again the issue of green space. In this case the established policy implementers will

be the urban planning department, which is responsible for roads, rivers, and parks, and

the agriculture department, which is responsible for farmland. The most effective way to

formulate a new policy to increase green space will be to form a project team consisting

of these two departments, plus staff from the community department and the cultural

affairs office — both of which are in frequent contact with the board of education, school

officials, and residents’ organizations; the role of coordinating the team members is best

played by the planning office, which has extensive experience in reconciling different

views and is used to thinking strategically.

Obtaining citizens’ input is also a vital step in the policy-planning process; this issue will

be examined in greater detail in the next chapter, on planning. To ensure consensus, a

rough draft of the policy should be released for public comment. This procedure enables

planners to predict what obstacles and difficulties lie in the path of implementation and

flexibly make adjustments. Once the project team has drafted the policy, it must be

authorized for implementation. This procedure constitutes adoption of policy based on

the policy planning or formulation process; it involves circulating the draft policy for final

approval under the ringi system and earmarking funds in the budget for it.

If enough care is taken at the planning stage, policy implementation should be a mere

matter of daily routine, being conducted by the responsible department in line with the

policy manual. Nonetheless, in the case of new programs, governments often run into

unexpected obstacles and opposition, the exact nature of which varies greatly depending

on the policy field. If, say, a municipality decides to place restrictions on where people

can park their bicycles, it can be difficult to make the public aware of the new rules, and

officials must exercise discretion in where to draw the line when it comes to removing

illegally parked bikes. In the case of subsidies to NPOs, it is no easy task to draw up and

implement guidelines, and if large numbers of applications are filed the program could

be accused of being unfair. In the case of a tree-planting campaign, you are dealing with

- 13 -


nature, and the saplings may fail to take root if an unwise choice of species is made; in

addition, people may complain about the fallen leaves. Constant modification may thus

be required at the implementation stage, a job that can be almost as intensive as policy

planning itself.

The last stage of the policy cycle is evaluation. Policy evaluation has become something

of a trend among local governments of late, and many different evaluation techniques

have been developed. But all are inspired by the same basic aim: to remedy the

long-ingrained bureaucratic habit of being indifferent to policy results and outcomes, and

especially — with finances being so tight — to overhaul nonessential programs; that

includes the possibility of scrapping them altogether. Evaluation programs must not be

allowed to become an end in their own right; they must be vested with clear goals —

deciding which programs to scrap, cutting next year’s overall operating budget by 10

percent, reforming the way staff think.

Citizens for their part have the right to conduct their own evaluation of government

performance. But no amount of detailed evaluation data is going to make what is in the

eyes of the ordinary citizen a superfluous facility or unessential program seem otherwise.

The results of program evaluations should therefore be released for public consumption

in a format that is easy to follow. Evaluations focus not so much on policy outputs as on

policy outcomes and the impact of policies on society. In the education field, for example,

there is greater interest in how well students score on scholastic aptitude tests than in

the level of increase in funding or number of teachers. On the other hand, some hold

that unnecessarily fueling a sense of rivalry among students is pedagogically unwise;

hence it is important to remember that any evaluation criteria used are purely

provisional.

IV. Policy Formulation and the Capacity It Requires

1. The Four Types of Policy Formulation

Amidst today’s wrenching changes, policy formulation has assumed greater importance

for governments than ever. Electing an eloquent, statesmanlike figure to head the local

government is of course important, but if the jurisdiction lacks adequate

policy-formulation capacity, local living standards are unlikely to rise. Narrow roads, a

shortage of daycare spaces, inconvenient public facilities, inadequate services for seniors

— all can stem from a lack of policy-formulation capacity in the local government in

question. That capacity depends to a considerable extent on the quality of the local

government’s workforce and its ability to function as a team. This section examines the

- 14 -


different types of policy formulation, and then considers strategies for strengthening the

policy-formulation capacity of civil servants.

According to Hood, policy formulation, or the way of responding to the changing

environments, can be classified into four types depending on level of policy-planning

costs and level of costs associated with the resulting policy transition. The first type is

piecemeal adjustment or upgrading, which is cheap in terms of both policy planning and

transition. The second type is imitation, which entails low planning costs but high

transition costs. The third type is recombination or conversion, which entails high

planning costs but low transition costs. The fourth type is prototyping, which is expensive

in terms of both policy planning and transition.

The first type, piecemeal adjustment, ensures the smooth running of public

administration through the constant overhaul of programs and systems. It constitutes

more a form of upgrade than of innovation. As Hood points out, installing electronic

detectors as a way to prevent theft from public libraries is an expensive innovation; on

the other hand, conducting spot checks at the exit would still be fairly effective, yet cost

little. The advantage of piecemeal adjustment is that it is cheap, simple, and can be done

as an extension of the daily routine. In fact, it is precisely such a culture of kaizen

(improvement) that eventually enabled Japanese companies to burst onto the world

stage.

The second type, imitation, involves the wholesale adoption of policies already

successfully implemented in other countries or jurisdictions. For better or for worse, no

patent system exists for local-government policies. That is the reason that unique policy

ideas spread throughout the country with such rapidity, but it is also the reason that

jurisdictions do not spend large amounts on policy development in competition with one

another. Imitation does not require much spending on policy development, since a

concrete program is simply taken over as is; but it may entail considerable transition

costs if the new policy conflicts with existing programs.

The city of Musashino in Tokyo Prefecture launched a microbus service called “Move-Us”

in areas not served by the regular bus system. Because of the many narrow streets in the

town, seniors living there were often unable to access public transit from near home. The

inauguration of Move-Us service changed all that, making it easy for old people to get to

places like the culture center and the shopping district around the local train station; and

with their innovative design, the buses soon became well known throughout Japan.

Today fancy-looking minibuses ply the streets not just of neighboring communities but of

- 15 -


the whole country.

The third type, recombination or conversion, involves adapting the components of an

existing policy to a different goal or regulatory target, without altering them that much.

Procedures used to regulate factories — frequency of inspections, whether they are

performed without notice, what sanctions are applied, and so forth — can be retailored

to offices and other buildings. Because the regulations are applied to a different type of

entity, however, development costs can often be considerable.

To use the example of community bus service again, while microbus service was

originally launched by Musashino as a means of transit for local seniors and other

residents, the neighboring city of Mitaka harnessed the idea to a different goal:

transporting visitors (mainly from out of town) to its brand-new Ghibli Museum of

Animation. This example may be considered a blend of imitation and conversion.

The fourth type, prototyping, involves launching a completely new long-term program

that requires spending huge amounts on research, as with the space shuttle. This

category does not generally apply to local-government policy. Japan’s first

Freedom-of-Information Ordinance, enacted by the town of Kaneyama in Yamagata

Prefecture in 1982, and the first Basic Ordinance of Community Development, enacted

by the town of Niseko in Hokkaido, both entailed performing extensive survey work in

advance; nonetheless, they were ultimately modeled on American and other overseas

prototypes, which to a large degree they simply imitated and adapted.

But there was one flurry of policy prototyping by local governments in Japan that

deserves a place in history: the series of policies formulated to combat the pollution

threats that arose with such frequency in the 1960s. Kumamoto Prefecture’s survey work

on Minamata disease and its relief programs for victims and Yokohama’s signing of

pollution prevention agreements with factories that set up shop within the city limits are

just two examples of policies without precedent anywhere in the world; moreover, they

were implemented while the Japanese government was still sitting on its hands. Both are

cases where local governments seized the initiative from the central authorities and

played the role of pioneers.

These four types of policy formulation are not clearly delineated from one another. Actual

policies in the real world usually represent a combination of several types. Nor should

one balk at the very mention of policy formulation on the unconscious assumption that it

invariably means developing a policy from scratch — prototyping. It is well to keep in

- 16 -


mind that impressive results can be obtained through upgrading, imitation, and

reconbination as well.

2. Strengthening Policy-formulation Capacity

Strengthening policy-formulation capacity has for the last twenty years or so been near

the top of the training curriculum for Japanese local-government bureaucrats. That is

because in Japan’s highly centralized political system those bureaucrats tended to leave

the job of policy formulation largely to central government ministries, so that senior local

government officials felt the need to shake them out of their passivity and get them to be

more proactive and independent-minded. In that sense, strengthening

policy-formulation capacity is, at the same time as being a challenge for individual

bureaucrats, also a challenge for the institutional culture of local governments as a

whole.

The first component of policy-formulation capacity is the ability to identify challenges —

in other words, you need a critical mind. Identifying challenges requires that, rather than

take existing institutions and policies for granted, you view them with a skeptical eye

(becoming a walking question mark, as it were) and notice any defects that lurk within

them; it also entails being able to recognize new needs that arise within society.

The second component is the creative capacity to translate problems into policy. In other

words, it is the ability to formulate an integrated policy that incorporates all the elements

enumerated above: what the policy aims to accomplish; what entity it is targeted at;

which department will implement it, using what means, and to solve what problem. That

in turn requires an understanding of how existing policies are structured and a constant

willingness to learn from pioneering programs in other local governments. But putting a

policy on paper is not enough to bring it to fruition; you also need to obtain the support

of the people around you and, ultimately, get the final go-ahead from the mayor or

governor. That requires communication and negotiating skills, and in that regard being

someone people can trust is even more vital than possessing intellectual ability. When

obstacles present themselves, dedication, determination, and sincerity are often the

qualities that ultimately win the day.

There is no royal road to strengthening policy-formulation capacity; at least the training

programs offer just a little. Most instructional manuals stress the importance of

conscientiously completing your assigned tasks, building up experience on the job,

humbly learning from more experienced peers and from colleagues working in other

local governments, reading books and magazines with a critical eye, and seeking out

- 17 -


opportunities to attend seminars and study sessions. Quite a few instructors recommend

also taking an interest in art, watching plays, participating in sports with local residents,

and being an avid traveler. Policy formulation is not a skill that you can acquire just by

applying yourself diligently to your job; it takes a streak of imagination.

A certain prefectural employee who was a member of a theater club, convinced that he

could put his hobby to good use in his job as tax collector, scripted a manual for a

campaign to collect taxes from a class of residents who had proven recalcitrant taxpayers

in the past: local yakuza or gangsters. This campaign, for which the whole tax collection

department was mobilized, raised several hundreds of millions of yen in revenue at one

fell swoop. That testifies to how a hobby outside the realm of the everyday, one that

seemingly has no connection with the regular job routine, can in fact help in developing

new policies.

3. Policy Formulation and Institutional Culture

Policy formulation is not some cerebral enterprise that takes place in a vacuum; it is

conducted among flesh-and-blood people in the corridors of local government. Without

the approval of colleagues, superiors, and citizens at large and official authorization, a

policy can never see the light of day. In the case of an ordinance or anything

budget-related, the sanction of the assembly is also required. Especially in Japanese

bureaucratic institutions, where mutuality reigns and teamwork is valued above all else,

new policies and systemic reforms that could threaten the prevailing order and upset the

harmony of the group run a high risk of being rejected. Next, therefore, we turn briefly to

the subject of the relationship between policy formulation and institutional culture.

Certain local jurisdictions in Japan have a reputation for being asleep at the wheel.

Totally passive, they have never entertained policies that might upset the daily routine;

even changing the way they run meetings would be no easy task. Proposing truly

innovative programs, then, would be out of the question, for that would create risks,

increase the workload on colleagues, and lead to all kinds of problems with reconciling

different points of view; hence an institutional culture of doing absolutely nothing has

taken firm root. Even suggesting the idea of creating a new park for children is regarded

as tantamount to a sin, as portrayed in Akira Kurosawa’s film Ikiru (To Live). The majority

of local governments in Japan, it may be, are thus asleep at the wheel. If this straitjacket

of passivity is to be broken such that dynamic innovations can be made in policy, then

mayors and governors will need to provide strong leadership in battling the

bureaucratized institutional culture that has established itself within government, and

the senior officials who are their right-hand men (or women) will need to back them up

- 18 -


to the hilt in this endeavor.

Consider now the composition of the local-government workforce. While most staff over

fifty only have high-school diplomas, the majority of their younger colleagues are

university graduates; hence the push to reform often originates in the lower echelons of

the organization. It is younger staff members with a strong sense of commitment who

will take the initiative in organizing regular study meetings and seminars after work and

getting together with counterparts from other governments or corporations to discuss

policy. According to such individuals, if you can change the mindset of just a few percent

of the people on the inside, the whole organization will start to change, just as when a

massive rock begins to roll slowly down a slope. One approach that has often been used

is the staff suggestion system, under which any employee can submit an idea for

improving the way things are done — treat people better at the counter, bring in an

ombudsman system, use elementary schools with lots of empty classrooms as a place for

seniors to socialize; those ideas are screened on a regular basis by a team of senior

officials, and the most outstanding among them are put into practice.

Alongside this conformist, mutualistic mentality, however, there coexists a competitive

culture inside Japan’s local governments that generates intense rivalry both within and

across jurisdictions. Once a reform campaign of whatever nature really starts to catch on,

it will spread like wildfire to every corner of the organization or the country. This

phenomenon was aptly described by Takeshi Ishida in Japanese Political Culture as

“rivalry in the midst of harmony.” Skillfully harnessing this culture of wanting to win

makes it possible to implement with relative ease what at first sight may appear to be

innovations of questionable feasibility.

A further point should be noted. Scrapping programs has today joined policy

development as one of the biggest challenges facing local governments in Japan. As long

as tax revenues continued to climb steadily — until 1990 or thereabouts — new

programs were proposed every year and services constantly expanded; and

implementing them was a fairly smooth process, for opposition from citizens and the

local assembly was virtually nonexistent. But since the early 1990s, when Japan’s

economic bubble collapsed, plunging the country into recession and leaving the national

and local governments alike in dire financial straits, it has become much more difficult to

propose and execute new programs; indeed, the focus now is on scrapping unnecessary

programs, outsourcing anything that can be left to the private sector or citizen

volunteers, and merging or restructuring any functions that overlap — which takes a

different kind of savvy. This is precisely the area where heads of local governments most

- 19 -


need to display leadership. They need to channel the creative energies of their staff more

into slashing programs than increasing them, more into cutting costs by doubling up

functions than into launching new services.

Thus multiplication rather than addition is the name of the game, as exemplified by the

idea, already described above, of converting the ever-growing number of classrooms left

empty by plummeting birthrates for the use of seniors; similar measures include

amalgamating kindergartens and daycare centers, and recruiting people attending

gardening classes as volunteers to maintain local parks. When obstacles crop up within

the organization, an effective technique is to get the citizens on your side and mobilize

them as a team of backers to help you win over colleagues and the municipal leadership.

Mayors are especially sensitive to wants and criticisms expressed directly by citizens,

since they have elections to win. Citizens for their part can offer a wide range of input as

ordinary members of the community, and collaboration between government staff and

citizens provides an important conduit for absorbing those ideas.

Conclusion

This chapter has focused on decision making and policy formulation at the local

government level in Japan. The implementation and evaluation stages of the policy

process also offer much to discuss. In closing this chapter, therefore, we will touch on the

subject of collaboration between government and citizens within the context of the

overall policy process as it embraces also implementation and evaluation.

The term collaboration can be defined as referring to a situation in which several players

work together as equals, on an ongoing basis, to achieve a certain objective, each

performing a different role and making its own distinctive capabilities available to the rest.

The Japanese word used in this sense, kyodo, has only gained general currency quite

recently; it was originally confined to the field of business administration, where it was

used to translate C. Barnard’s term “cooperative system.” Since the latter half of the

1990s, however, the term has come to be used with increasingly frequency in the field of

local government and community development, and today it has become something of a

buzzword among local government administrators. The concept was even enshrined as a

pillar of local government in Article 91 of a draft text for a new constitution compiled by

the Liberal Democratic Party in the summer of 2005.

From the Meiji period, through the war years and the era of postwar reform, right down

to the present day, public administration in Japan has, both in conception and execution,

- 20 -


pursued the path of harmony and cooperation between government and the private

sector. That fact further testifies to how deep-rooted Japan’s culture of mutuality is. Thus

collaboration itself is nothing new. Still, with the recent crisis in local government

finances and the rise of the citizens’ sector, the new term does serve to highlight the

issue of cooperation between governments and citizens at the policy implementation

stage in particular. This subject will also be mentioned in the next chapter, on planning.

But it is the institutionalized lack of accountability to which this very culture of mutuality

has given rise in the first place that is the ultimate source of so many problems: the

failure of inefficient public-private partnerships, the practice of bid rigging for

public-works projects, all the tax money wasted on them, and so forth. The failure to

define unequivocally where responsibility lies for the Pacific War, which brought such

suffering to the countries of Asia, is likewise rooted in Japan’s peculiar approach to

politics and public administration and its distinctive institutional culture.

Overcoming the problem of obfuscation of responsibility engendered by the collective

decision-making process will require a sustained effort to define where exactly

responsibility for policies lies. That can be achieved through a constant effort on the part

of citizens to monitor and evaluate the functioning of government, and a corresponding

commitment on the part of government to disclosing information and being accountable

for its individual decisions. To that end, the principle must be asserted that local

government and the local citizenry are distinct entities, not fused into one. In conceptual

terms, local government derives its legitimacy from a covenant with the citizenry, which

covenant it must renew each election. This modern notion of a covenant with the

electorate, and of the rights and responsibilities attendant thereon, has in some ways yet

to take adequate root in Japan.

Many lessons are to be learned from Japan’s culture of mutuality and teamwork and its

tradition of cooperation between the public and private sectors; indeed, these have been

among the driving forces behind the country’s modernization and economic growth. But

at the same time the shortcomings must not be overlooked. In designing institutions and

planning policies tailored to a specific country, it is important to take into account its

culture, while being willing to learn and improvise on a wide range of fronts.

Bibliography

G. T. Allison, Essence of Decision: explaining the Cuban missile crisis, Harper Collins,

1971.

- 21 -


(A very well-known book that analyzed the decision making in the Cuban missile crisis of

1962 through three different lenses; rational actor paradigm, organizational behavior

paradigm and governmental politics paradigm. Among many theoretical models

concerning decision making process, Allison’s model is one of the most influential.)

C. E. Lindblom & E. J. Woodhouse, The policy-making process, 3rd ed., Prentice Hall,

1993.

(Compact but comprehensive, theoretical book on policy making process. While it

Originally was written by Lindblom and its focus was on the “incremental” aspect of

policy making, the third edition with Woodhouse takes greater accounts of the influential

role of business. It helps readers to understand pluralistic nature of policy making in

the U.S.

C. Hood, The Art of State: culture rhetoric, and public management, Clarendon Press,

1998.

,

t

t

(A unique book on the categorization of public management based on “cultural theory,”

which was first developed by anthropologist Mary Douglas. According to the author,

there are four types of management style, which are hierarchical way, egalitarian way,

individualist way and fatalist way.)

C. Hood et. al. ed., Con rolling modern government: variety, commonality and change,

Edward Elgar Pub., 2004.

(Applying the theory of the above book by Hood of 1998 to actual public management

fields of prison management, education, and higher civil service in eight countries

including Japan)

H. Abe, M. Shindo, S. Kawato, The government and poli ics of Japan, translated by

James W. White. University of Tokyo Press, 1994.

Takeshi Ishida, Japanese Political Culture: Change and Continuity, Transaction, 1989

(Takashi Nishio)

- 22 -

Documents

Module: Public Management and Organization Development … · Public Management and Organization Development Sub-Module2 Decision Making and Policy Formulation 2. Reforming the Policy