Introduction

Policy analysis is a tool for public policy evaluation, with the aim of improving decision-making and implementation. Therefore, policy analysis is useful when policymakers eek to improve efficiency and equity in allocating public goods. Despite these potential benefits, policy analysis generally exerts only a marginal influence on policy formation and decision-making across all government levels. This chapter discusses the fundamental reasons why policy analysis performs only a peripheral role in policy formation.

Japan offers a particularly narrow role for policy analysis compared with other developed countries for two reasons: first, Japan emphasises coordination and compromise between social organisations regarding rationalised policy formation and decision-making; and, second, Japan's immense public debt clearly attests to the nation's inadequate formal approach to rational policy analysis, which should be performed after explicit or implicit political interventions.

To an outsider, Japan appears to be a centralised bureaucratic country based on democracy. Indeed, while Japan does not advocate a planned economy, a ‘somewhat restricted’ atmosphere nevertheless pervades Japanese society, wherein individuals must be sensitive to the bureaucratic stiffness without any reason. Japanese society thus appears to prefer a ‘tepid or lukewarm society’ filled with vested interests served by the government.

However, the cumulative government debt needed to maintain this paternalistic society at a high level of welfare is obviously not a rational long-term policy. Moreover, no sober policy analysis has been conducted to provide a solution to this situation. Instead, the greater part of governmental problems has been addressed on a case-bycase basis, without a clear, systematic national policy vision and design.

In 2012, the Japanese public elected a Liberal Democratic Party-led coalition government, which appeared to be relatively better at political governance than other parties. This victory was a consequence of disappointment with the Democratic Party governance, which had attempted but failed to completely change the budget under the slogan ‘From concrete to people’. The prime minister must understand the utility of policy analysis and apply it when he/she becomes a policy leader. If policy analysis were given a more prominent role in the policymaking process, Japan could recover from its critical fiscal condition.