2012 EGPA Annual Conference

5-8 September, Bergen, Norway

Permanent Study Group I: Information and Communications Technologies in

Public Administration

e-Government in Aging Society : from a Japanese case study

Prof.Dr.Hiroko Kudo

Professor

Faculty of Law, Chuo University

742-1, Higashi-nakano, Hachioji, Tokyo, 192-0393, JAPAN

Tel: +81 426 74 3194, Fax: +81 426 74 3133

E-mail: hirokokd@tamacc.chuo-u.ac.jp

Abstract

The paper analyses the issues and possibilities of e-Government in aging society, which is one of the

serious issues in the coming decades, giving the rapid demographical changes, through a research on

the impact of aging society on the use of ICT in public sector in Japan. Japan is one of the most aged

societies in the world with advanced ICT technology. Since the boomers are currently in the phase of

retirement, there would be still a decade or so to accommodate non-digital-generation retirees;

however the current e-Government strategy has not yet considered seriously about the issue.

The research was conducted throughout Japanese local governments, involving senior citizens and

administrators. The results show that one third of elderly people lives alone and most uses mobile

phones, although 20% have never used e-Government services. The need to review the regulations

and laws on ICT and the importance to guarantee accessibility to elderly people were pointed out.

Introduction: Elements of Government Reform

Restructuring of government institutions and public organizations has become one of

the classical methods of reform and widely implemented in many countries. However,

recently, reorganization and/or restructuring does not only mean the merger of different

institutions or rationalization of organizations. It may also include outsourcing,

privatization of certain function of public institutions, creation of agencies, and

introduction of different forms of public-private partnership.

Modernization of the budgeting process is another important reform for government and

public institutions in general. This reform has been frequently attempted and partly

implemented in developing countries, where economic and financial transparency,

securing accountability through the decision-making process, and prevention of

corruption are key issues to be addressed and guaranteed by authorities in order to

receive financial support from international organizations and banks (Ateetanan, 2001).

Introduction of a more rational accounting system, including accruals accounting in the

public sector, has been combined with public management reform. Kudo (2003, 2004)

relates experiences in public finance reform in developing countries. Furthermore,

rationalization of financial policy and its implementation has been recognized as a

crucial factor for more pragmatic and practical public sector management. Financial

policy used to be influenced by the political background of the government and, thus,

by ideological stance. However, for more efficient and effective governance, which

requires innovation and creativity, pragmatic and strategic policy is needed instead of

ideological and political driven measures.

Renewal of public management and public service delivery has become an important

trend in recent public sector reform. NPM was introduced into the traditional form of

public administration and changed its managerial style through a series of techniques

imported from business management (Olson et.all., 1998). Customer-oriented and/or

outcome-oriented thinking has been introduced in policy making and implementation

processes (Hood, 1995). Reform in public service delivery, influenced by these

orientations, forced public sector organisations to outsource some functions, privatize

enterprises, and revise the role of government in accordance with the role of private

sector and civil society. Public-Private Partnership (“PPP”), the Private Finance

Initiative (“PFI”), and other forms of collaborations became alternatives to traditional

government restructuring. This trend is now evolving into the “governance model”, with

greater emphasis on integrating politics and management rather than relying merely on

the introduction of new management techniques.

Introduction and use of ICT to improve managerial processes and to enhance

communication to and with the citizens is a key factor for a successful e-Governance

policy. It first developed as a tool for better governance in terms of efficiency in office

work/administrative systems/tasks, data processing and dissemination. However, it is

now recognized as an important tool of communication between government and its

stakeholders, providing an interface between them. E-Governance has become one of

the most important elements in public sector reform, as it offers transparency,

accountability, interface with citizens, access to information, and good governance,

including prevention of corruption. When there is high demand for accountability and

transparency, introduction of e-Governance is a common strategy.

1. Japanese Public Sector and its Reform

The modern Japanese public administration system was established in the late 19th

century, after the Meiji Restoration of the nation. The modernization was identified as

“westernization” - the politicians of the day considered modernization to mean

becoming like “western”, mainly European, countries. Thus the Japanese political,

governmental and related public institutions were established after the models of their

European counterparts and the Japanese administrative system and procedures were

designed according to the “western” model. In particular, German, French, and British

systems were introduced and formed the basis of the Japanese public administrative

system.

However the daily practice in these organizations and the informal procedure which

remained parallel to the formal one preserved traditional values. During the Meiji,

Taisho, and the first years of Showa periods, Japanese public service enjoyed a good

reputation and indeed contributed enormously to the nation’s remarkable progress,

given its traditional organizational value and the introduction of modern theory and

techniques. They somehow adopted and harmonized the “western” way into the local

culture and values.

This situation changed drastically after the Second World War. Public organisations

started to fully adopt “western” values. Despite its strong reputation for efficiency and

effectiveness, productivity and prestige, the Japanese bureaucracy was forced to change.

Campaigns to reduce the size of government, in terms of both costs and staff, resulted in

the Japanese government becoming the smallest among the industrialised democracies

and having the fewest administrators relative to population size of any OECD country.

1.1. Rise and Fall of “Japan Inc.”

After the Second World War, Japanese institutions were drastically reformed. By the end

of the occupation in 1952, Japan had already started its dazzling climb to the “economic

miracle”. One of the most popular views to explain this development is that power in

Japan was centralized in the hands of “Japan Inc.”: a ruling triad, consisting of the elite

of bureaucracy, the main political party, the Liberal Democratic Party (“LDP”), and big

business (Hayao, 1993)1. According to this theory, bureaucracy is the key actor of the

three, helped by its long tradition and its prestige and expertise. This assumes that this

“iron triangle” of small administrative, political and economic elite, both explains the

“economic miracle” and the present difficulties to reform (Kerbo and McKinstry, 1995).

The empirical validity of the “Japan Inc” model has been increasingly questioned.

Although the idea of a small cohesive elite that decides everything might still have been

true in the 1960s, “Japan Inc.” has been significantly fragmented since then (Hayao,

1993). Curtis, who particularly focuses on the “1955 regime”2 or “1955 system”

(Stockwin, 1997a, 1997b), provides one of these accounts. The long dominance of the

LDP began in 1955, when a decade of fragmented party politics ended as the different

conservative parties were united in the LDP and two wings of the Socialist Party were

reunited. This system was maintained by four mutually supportive pillars: a broad

public consensus over the common goal to make Japan a leading economic force, the

presence of large interest groups with close links to political parties, one-party

dominance, and a prestigious and powerful bureaucracy (Curtis, 1999). These pillars

contributed to the impressive economic success-story which saw Japan transformed into

a leading economy in the 1980s. However, partly because of its success, the system

gradually showed its weaknesses. This process started in the 1970s, continued in the

“economic bubble” of the second half of the 1980s and accelerated after the bubble

burst in the early 1990s (Kato, 1994, Koh, 1989). The pillars were gradually weakening,

partly due to internal dynamics, and partly due to international pressures.

Once the goals of economic success were achieved, the consensus disappeared. Both

public opinion and the opinion of the leaders showed a very ambiguous attitude towards

reform (Curtis, 1999). The public were much more sceptical about drastic changes to

the system that had brought them wealth. At the same time, they realized that something

had to be done to deal with the country’s economic problems. Underlying these

1 “In this view, the ruling triad is united in promoting high economic growth above all else while at

the same time subordinating Japan’s defence and foreign policy more generally to that of the United

States”. 2 An alternative, but similar, description is the “1955 system”.

ambiguities was a lack of consensus about the direction of reforms.

The system where large interest groups, representing big business, labour and farmers,

had a significant impact on political parties and government also gradually unravelled in

the last quarter of the century. As the country moved from an industrial to a

post-industrial society, the interests of business, farmers and labour became more

diverse and the cohesion of their large interest groups weakened (Curtis, 1999)3. Special

interests are represented by political representatives called “zoku” (literally meaning

“tribe”) - members of the Japanese parliament, usually of the dominant LDP, who

specialise in a particular policy area and have close contacts with public servants in the

responsible ministry or bureau. This allows them to act as agents of specific interests,

mediating between bureaucrats and interest groups. The iron triangle in the “Japan Inc.”

model has been reinforced at the level of these “sub governments” (Hayao, 1993) or

policy communities. In particular the zoku politicians protect the vested interests of their

interest groups, rather than stimulate change.

The long-term dominance of the LDP allowed for long-term policies and reinforced the

“iron triangle” between the LDP, the bureaucracy and interest groups. However this

dominance also gradually weakened. Its majority gradually decreased, until it lost in the

House of Councillors (upper house) election in 1989 and subsequently in the House of

Representatives (lower house) in 1993, when the LDP was forced into opposition. The

party regained power soon afterwards, but this defeat marked the end of the era of LDP

dominance (Mishima, 1998).

The bureaucracy has long been perceived as a beacon of competency and integrity,

safeguarding the Japanese national public interest against the short-sighted behaviour of

politicians who are mainly focussed on collecting electoral support and money for the

expensive campaigns by taking care of special interests (Koh, 1989, Curtis, 1999)4. This

certitude disappeared, particularly in the 1990s, due to a number of widely criticised

policy failures, in particular the Ministry of Finance was held responsible for the

economic recession, and a number of high-profile scandals involving public servants.

One of these was the “jusen bailout” (Inoguchi, 1997), a combination of both a policy

failure and an instance of serious misconduct.

In 1995-96, the Ministry of Finance took the highly contentious decision to use

3 Curtis puts it as “a shift from interest group politics to the politics of special interests”. 4 Curtis summarizes the bureaucrats’ position as; “Recruited by competitive examination from

among the best and the brightest graduates of Japan’s most prestigious universities, especially from

the Faculty of Law of the University of Tokyo, Japan’s bureaucratic elite possessed high morale, a

sense of mission, and a reputation for competence and integrity. (…) the image of the Japanese

bureaucrat was one of a man of ability and dedication who had forgone opportunities for material

gain to serve the nation”.

taxpayers’ money to bail out bankrupt loan companies that had made ill-advised

decisions during the bubble years. Inoguchi (Inoguchi, 1997) suggests that this decision

can at least partly be explained by the fact that these jusen were popular destinations for

amakudari (literally meaning “descending from heaven”). This is a notorious Japanese

practice, which entails senior public servants leaving public service some years before

their official retirement age to transfer to the private sector or government-affiliated

organisations. These former top administrators often receive a wage that is significantly

higher, which somewhat compensates for their relatively lower wage as public servants

compared to top positions in the private sector. At the same time, this practice allows the

ministry to provide opportunities at the top for younger promising public servants.

Through personal ties, this practice also allows for a smooth and better relationship

between bureaucracy and business. This practice has been subject to heavy criticism,

partly because of its integrity violations (Black, 2004) It is questionable whether the top

officials would have been equally supportive of these loan companies if they did not

have the prospect of well-paid top positions in those companies after their career as

public servants (Curtis, 1999)5. As a result of these and other policy failures and

scandals, “bureaucrat-bashing” became popular among politicians, including those of

the governing LDP. It was in fact a convenient way to avoid taking responsibility for the

poor performance of the government. Not only did the prestige and reputation of the

bureaucracy diminish, but there are also indications that their actual power decreased.

1.2. Political and Administrative Reform in the 1990s

The economic problems and the concomitant unravelling of the 1955 system lead to a

strong/vibrant discourse among the elite in favour of reform. The discourse about

political reform became very strong with the formation of the eight-party Hosokawa

government in 1993, the first that did not include the LDP since the establishment of the

1955 system. He had an ambitious reform plan that included restrictions on donations to

political parties, increased public subsidies for parties, increased penalties for corruption

and proposals for electoral reform6. However, the government fell in April 1994 having

only achieved part of its agenda, most importantly electoral reform. Under the new

5 An explanation of the political support for this is the fact that farmer cooperatives had invested

heavily in these jusen. With the farmers being the governing party LDP’s most important

constituency, this provided a strong incentive for the governing politicians to support the bailout. 6 A law was introduced only in November 2000, which prescribes penal sanctions for Diet members

and members of local assemblies, if they receive financial gain in return for efforts to influence the

awarding of contracts or administrative positions.

system, 200 members of the lower house would be elected in 11 regional proportional

representation districts and 300 in single-member districts, in place of traditional

multi-member districts that had been blamed for pork-barrel politics and checks and

balances among interests (Stockwin, 1997b)

The history of post-war administrative reform in Japan can be read as succession of

campaigns to reduce the size of government, in terms of both costs and staff, leading to

a Japanese government that is the smallest among the industrialised democracies and

has the fewest administrators relative to population size of any OECD country. For

example, the proposals of both the first “Professional Commission for Administrative

Reform” (PCAR) of the beginning of the 1960s and the second PCAR of the beginning

of 1980s lead to significant cutbacks; decentralization to local governments, delegation

to public corporations in the 1960s and privatization in the 1980s (Furukawa, 1999,

Masujima and O’uchi, 1995)7.

The main administrative reform of the 1990s was initiated by Prime Minister

Hashimoto, who chose this as his government’s top priority. As a result, administrative

reform was linked to two developments mentioned above: increasing scepticism

towards the bureaucracy for both its policy failures and misconduct and widespread

calls for drastic economic reform that would also involve administrative reform. In line

with Japanese tradition, he also promised to reduce the number of government

personnel by at least 10% over 10 years.

The reform package initiated by the Hashimoto government and implemented under

Prime Minister Obuchi after 1998 went further than simple cutbacks. First, in line with

the New Public Management movement, the Diet approved the “Policy Evaluation Act”

in 2001, which introduced a performance management system (Kudo, 2002). The Act is

inspired by the Government Performance and Results Act of the US federal government

of 1993, but is more decentralised than the US example, giving more freedom to

ministries and agencies to organise their own system (Yamamoto, 2003). Second, they

reorganised the national bureaucracy from one office (Office of the Prime Minister) and

22 ministries and agencies into one office (the Cabinet Office) and 12 ministries and

agencies. This reorganisation was enacted in 1998 and came into effect in 2001. These

changes forced wide institutional and managerial transitions in bureaucracy.

7 The first significant administrative reform initiated by Prime Minister Nakasone in mid 80s was

characterized by Thatcherism and Reaganomics and the Japanese reform was not an exception to this

trends. The main strategy was privatization and deregulation. In fact, he successfully privatized

national railway, public telecommunication company, and various public monopolies. This reform

was remarkable not only for its success, but also for the fact that it fully introduced the global trend

and strategy of public sector reform into Japanese traditional public administration.

The overview above shows how Japan’s stable and economically successful post-war

political system began unravelling in the last quarter of the 20th

century. The key points

are: the reduction of power and prestige of the bureaucracy, an increasingly

unpredictable and concerned electorate that become less tolerant of corruption, and a

strong desire for far-reaching reform that was not matched by actual reforms (Campbell,

1999). All these had helped shape the policy agenda to propose reforms introducing

“global standards”. However, it was eventually a number of scandals that acted as

catalysts for moving reform proposals up the government’s policy agenda.

1.3. Scandals of “traditional practices” to introduction of “global standards”

Scandals and concerns about political corruption are certainly not new to Japan; since

the Second World War there have been many instances of corruption and scandals of

various sizes (Curtis, 1999) The difference between the scandals in the 1990s and those

in previous decades was the almost constant emergence of new scandals during this

time (Stockwin, 1997a, 1997b) and the very visible involvement of bureaucrats.

One of the most prominent scandals in post-war Japan was the “Recruit Scandal”,

involving insider stock deals, that broke out in June 1988. The scandal claimed many

top politicians as its victims, including Prime Minister Takeshita, Minister of Finance

Miyazawa and the LDP Secretary-General Abe. What was even more shocking to the

public was the revelation that senior public servants were also implicated in the scandal.

In 1996, a former Vice-minister (the administrative head of a ministry) of Health and

Welfare was arrested for accepting bribes from the head of a welfare business group, in

return for favours regarding the construction of specially subsidised nursing homes.

Most affected by the scandals of the 1990s was the Ministry of Finance. In 1995 a

high-ranking official of the Ministry was found to have failed to report money he

received from donors to the tax authorities (Hartcher, 1998). In January 1998, a former

director-general of the Ministry was arrested for leaking information in return for bribes.

One week later, two bank inspectors of the Ministry of Finance were arrested for

revealing information to several banks regarding the timing of upcoming inspections in

return for accepting expensive hospitality at restaurants, night clubs and golf clubs.

Both the Minister and the Vice-minister of Finance resigned in response to these

scandals. Prime Minister Hashimoto’s decision to set up a committee that would prepare

the eventual Ethics Law was a direct consequence of these scandals. The publicised

scandals proved to be only the tip of the iceberg, as it emerged that many more Ministry

of Finance officials had accepted allegedly illicit “entertainment” by private financial

institutions (Brown, 1999, Kaneko, 1999).

Another practice that regularly caused public outrage was that of “kankan settai”: the

wining and dining of officials of central bureaucracy by their counterparts in local

governments. The latter claims that if they do not follow this practice of entertaining

central bureaucrats, they will not receive necessary information and appropriate funding

from central government (Inoguhi, 1997).

All these scandals have their roots in the traditional values and practices of public

service. Japanese public service has continued to conserve its prestige as well as

competence, even “high morality” in certain senses. However some of their practices

were no longer acceptable in the light of modern, global standards, like wining and

dining. This had long also been accepted by their private sector counterparts and by the

public in general, as many considered that eating together outside the working

environment helped to create better relationships, thus increasing efficiency at work. In

fact, the private sector has also been forced to change radically in recent years with the

increased number of foreign investors changing certain behaviours of Japanese

companies8. Gift-giving is part of the traditional culture to show respect and gratitude,

not necessarily connected to a specific interest. Many still have difficulty in

understanding that gift-giving can cause problems not only for themselves but also for

the recipients. Many are not aware that buying dinner can be seen as a bribe. They

suffer from the new standards prohibiting many of these traditional practices and are

afraid that not doing these things might be considered by their counterparts as lack of

politeness and respect. Interestingly, many private sector figures claim that it is now

difficult to maintain contact with those in public services following implementation of

these reforms9.

The issue of modern ethics management in the bureaucracy eventually centred on three

notable events, in addition to a number of smaller and less visible measures. First, after

the Recruit Scandal surfaced, the Cabinet took a decision “Regarding the Enforcement

of Official Discipline” (December 1988), stating that government officials should

refrain from acts that could invite public suspicion. Second, following the wave of

scandals in the mid-nineties, the Council of Vice-Ministers reached an agreement in

1996, requiring each ministry and agency to establish its own code of conduct

concerning contact with persons or entities, from the private sector or from other public

organisations, whose interests are affected by the public servants’ decisions. Public

8 For example, it is observed an obvious shift from “business dinner” to “business lunch”, or even

“business breakfast”, mainly due to the pressure from the foreign business partners. 9 Surveys conducted by National Personal Agency shows clearly this tendency.

servants who violate the code could be reprimanded under the National Public Service

Law (Kaneko, 1999). The Council provided a model code and the ministries and

agencies developed their own code on the basis of this. However, the scandals continued

and a public perception developed that self-disciplinary measures by the government

were not sufficient. In February 1998, Prime Minister Hashimoto established a

committee to prepare ethics measures. This committee approved the 1996 measure and

the Law was finally promulgated on August 13, 1999. The Law prescribed that an

Ethics Code had to be established, which would replace the codes of the ministries

(Goda, 2001).

1.4. Introduction of NPM: focus on management and economic stimulus

Under the Koizumi administration, overcoming the economic crisis became the most

important issue for the Japanese government. His administration announced a structural

reform, following the reform strategy set by Hashimoto administration and continued by

his successors. He started with economic and financial reform in order to revitalize the

stagnated economy. However the reform had been stacked, basically because of its long

and complicated administrative procedure and numerous regulations, despite the drastic

institutional restructure implemented at ministerial level in 200110

. Thus the government

decided to proceed with regulatory reform as a major priority.

The government identified that the regulatory reform would be crucial to promote

economic and social structural reform, and aimed to achieve both the “establishment of

a consumer and citizen-oriented economic and social system” and “revitalization of the

economy” at the same time (Imamura, 2002, Yamamoto, 2002).

In order to promote the reform, the Council for Regulatory Reform was established in

the Cabinet Office under the provisions of Clause 2, Article 37 of Cabinet Office

Establishment Law on April 1, 2001. The Council is responsible for comprehensive

investigation and deliberation of basic issues regarding the modalities of necessary

regulations, in order to promote economic and social structural reform, as well as for

monitoring the progress of implementation of the Three-Year Programme for Promoting

10 Ministry of Public Management, Home Affairs, and Post and Telecommunications was created

through merger of Management and Coordination Agency, Ministry of Home Affairs, and Ministry

of Post and Telecommunications; Ministry of Land, Infrastructure and Transport from Ministry of

Public Works, Ministry of Transportation, Land Agency, and Hokkaido Development Agency;

Ministry of Welfare and Labour from Ministry of Health and Welfare, and Ministry of Labour,

Ministry of Education and Science from Ministry of Education and Science and Technology Agency;

Cabinet Office was instituted through a reorganization of Office of the Prime Minister; IAAs

(Independent Administrative Agencies) were created in order to reorganize public institutions.

Regulatory Reform11

, from the perspective of promoting fundamental and important

economic policy measures.

In the same period, e-Government policy had been developed rapidly. Since the

establishment of the Kasumigaseki-WAN in 1997, central government has promoted the

introduction of integrated e-Government policy and system.

Although the Japanese government stressed the issues of efficiency and effectiveness in

the public sector in promoting public management reform, the main concerns remained

on guaranteeing transparency in order to clean up the image of corrupted system, on

self-regulation of the organizations in order to survive bureaucracy bushing, and on

encouraging and empowering private sector in order to stimulate economy.

2. E-Government Policy in Japan

In some Asian countries, reforms in public administration are implemented with similar

methodologies to those in EU member countries but with different targets. Their major

concern is how to tackle corruption and clean up certain political relationships within

public administration. Improving and rationalizing managerial aspects of public

administration is a secondary consideration (Kudo, 2003, 2004). In Japan,

e-Governance policy was rather independent of other public sector reform. The strategy

was business-lead and many legal aspects were left aside.

Use of ICT is highly desirable in these plans, because of the need for transparency.

E-procurement, e-bidding, and other uses of ICT for administrative procedure

improvement increase transparency and leave little room for corruption. In Thailand, for

example, the Anti-Money Laundering Organization (AMLO) is becoming a symbol of

the new public management, using ICT and adopting new methodologies, enabling the

top priority of tackling corruption (Ateetanan, 2001). In other countries, different

techniques have been introduced to administrative procedure to fight against corruption,

to improve transparency in the government and thus, to enable public management

reform. Transparency and accountability, which are promised by e-Governance, are

changing the public sector. The focus is on institutional change that was brought on by

ICT policy.

2.1. E-Government Strategy between Business and Legitimacy Issue

11 Its revised and actual version was decided by the Cabinet on March 29, 2002. The first decision

was made on March 30, 2001.

In Japan, e-Governance policy is a rather recent issue. The Kasumigaseki-WAN (Wide

Area Network), which is the central government network system, came into operation

only in 1997, the residential register network system started to operate only partially

after a long and suffering debate in August 2002, and the local government information

network system is still to be fully established.

The government invested effort in building the “Basic Residential Registers Network

System”. The system links all municipalities and prefectures so that the central and local

governments can share resident register information (e.g., name, address, sex, and date

of birth) based on residential register codes. According to the government, “it is

expected to help create an information infrastructure that is essential for efficient

responses to the improvement of local administration such as decentralization and the IT

(the Japanese government uses “IT”, instead of “ICT”) Revolution”. However, such was

the strength of public fears in relation to data protection and privacy, that the

establishment of a network system just to exchange these four basic items of data was

impossible for a long time. There are still some municipalities, with populist mayors,

opposing connection to the network and thus causing serious inefficiency in the network

operation.

The government is aiming “to respond to the growing expectations for administrative

operations that match the IT Revolution” and to implement e-Governance so that

“administrative works for applications, notifications, etc. will be handled through the

networks”. In order to introduce ICT for administrative works in general, it is necessary

to “informatize” local governments, as most of the important and essential functions and

tasks are carried out by municipalities in Japan. The Local Administration Bureau of the

Ministry of Internal Affairs and Communications (MIC, previously known as Ministry

of Public Management, Home Affairs, and Post and Telecommunications, MPMHAPT)

is promoting the establishment of e-local government in coordination with national

policies and measures. At the same time, the government supports local governments to

improve local information and communications infrastructure (e.g., wider use of optical

fibre cables), as well as transmission of local information. However e-Governance

policy in Japan remains fragmented and business-lead, thus priorities are given to

infrastructure building and equipment supply, without any strategy addressing how to

design and make use of the e-Governance system. There are two further elements that

have decisive impact on e-Governance policy in Japan: the lack of basic legislation on

ICT, and public concerns regarding privacy and data protection.

2.2. New Stage of e-Governance: Ubiquitous Network Society

With the aim of invigorating local communities and economies through creation of local

ubiquitous network societies, MIC held the first meeting of the “Panel on Revitalization

of Local Community and Ubiquitous Network Society” in November 2006. The primary

purpose of the Panel is to conduct analysis of and to study local communities and to

create local ubiquitous network societies, with the aim of helping to contribute to

deliberate specific issues on local ubiquitous network societies and specific measures,

required to realize local ubiquitous network societies. The Panel will compile its

findings in a report in June 2007.

The Panel will analyze and study the following items: i) problems faced by local

communities, ii) creation of local ubiquitous network societies and effects thereof, iii)

ICT policies for creating local ubiquitous network societies, a) comprehensive program,

b) support measures.

Japanese e-Governance is based on a series of strategies. Recent evolution shows that

the “Basic Policy for the Promotion of Advanced Information and Communication

Society” (issued 1995, revised 1998) was developed into “Basic Law to build an

Advanced Information and Communication Network Society” (Law No.144 of 2000,

effective since January 2001), which, in turn, became “e-Japan Priority Policy Program

2004”, after three previous programmes issued each year after 2001 and two major

strategies regarding Japanese ICT (“e-Japan Strategy” and “e-Japan Strategy II”). These

priority policies recently developed into “ICT Policy Package 2005”, which was

decided by the ICT Strategy Headquarters in February 2005.

Meanwhile, the reform of public administration through ICT has been promoted in a

parallel way: “Master Plan for Promoting Government-wide use of IT” was issued

between 1994 and 1999, and revised between 1998 and 2002. The “Program for

Building e-Government” was decided by the CIO Council in July 2003, a result the

master plan and the “e-Japan Priority Policy Program 2003”. The programme was

converted into “Future Initiatives for Administrative Reform” in December 2004 by the

Cabinet Decision.

The “Program for Building e-Government” had its programme period from FY2003 to

FY2005 (subject to annual review) and had two major goals. One was to provide

“User-oriented Administrative Services” and the other was to realize “Streamlined

Public Administration with High Budget Efficiency”. The two basic principles

underlying these goals are: “Provide Convenient and High quality Services to the Public”

and “Renovate Administrative Systems and Operations”. The latter involved a

“zero-base review” of administrative systems and operations to make them rational and

efficient by introducing unified systems for back-office operations and by outsourcing

various operations of routine nature (E-Government Committee, 2006)

In order to develop infrastructure for building e-Government, it analyzed that

strengthened infrastructure for e-Government was needed, for example, making the

most of “Assistant CIOs” (technical advisors appointed from outside) and fortifying

measures of security and legal system of Protecting Personal Information.

In order to reform administrative systems and their operations though ICT, the Japanese

government developed its ICT infrastructure as follows: provision of one PC to each

official, completion of in-house LANs and Kasumigaseki-WAN (Wide Area Network

for Ministries), and connection of Kasumigaseki-WAN, LGWAN (Local Government

Wide Network Area), and Judicial ICT System (Network for Court).

In terms of administrative reform through ICT, assistant CIOs (ICT external experts

from ICT industry, consultant firm, and system design firm) were appointed as technical

advisors in all Ministries in December 2003. Assistant CIO Council was established in

December 2003, and administrative systems and operations were systematically

classified. 79 areas were designated for which Optimization Plans are to be formulated

(23 common areas, 56 particular areas) (Sawamoto et al, 2007). Assistant CIOs are

nominated from ICT companies and consulting firms. Most of them are system

engineers and ICT experts. They are dispatched from their companies to the

Government institutions for a couple of years as assistant CIOs. Even with their

competitive expertise and high motivation, this system itself is quite fragile and has

many issues, including the problem of vendor orientation.

Since the beginning of “informatization”, Ministries and Agencies introduced their ICT

system with a specific ICT company, mostly computer company and system designing

firm. They have continued to develop their own system with related system engineering

firms, software houses, and management consulting firms. Thus, once they started to

introduce Assistant CIOs, they have to be from the related companies, or at least, who

experts of those specific systems. Thus the different vendors of Ministries and Agencies

have created system boundaries among them, which made it difficult to integrate into

one system, when Kasumigaseki-WAN started, and which still exist. These system

boundaries isolate various domains in the government. Even the hard work with good

will, the nature of Assistant CIOs cannot overcome certain issues.

Optimization Plans were already adopted in nine areas applicable to all ministries:

personnel & payroll, accepting e-applications, e-provision of administrative information,

government employees mutual aid association, procurement, inventory management,

benefits & allowances, subsidies, and travel expenses. Optimization Plans for particular

areas were adopted in 12 areas: registration, patent, radio wave control, state pension,

national forestry, food administration, and meteorological services, among others.

One of the new challenges for the reform of administrative systems and their operations

is the formulation of an Optimization Plan for each of the 79 designated areas of

administrative systems and operations, that is to say, implementation of optimization.

These Optimization Plans have four aspects: quantify estimated “Effects of Reducing

Processing Time and Costs”; build government-wide integrated systems for “Common

Operations”, that is, eliminate overlapping investments in building systems and promote

efficient budget spending; drastically cut costs and streamline operations of “Legacy

(old) Systems” by, (1) clarifying “Investment-Effectiveness” by complete renewal of

systems, (2) transforming to “Open Systems”, (3) re-examining Contracts; shifting from

“Contracts ad labium” to “Open tendering procedures”, etc.; and implement and

evaluate the optimization, that is, Administrative Management Bureau (MIC) formulates

guidelines for both “Implementing the optimization” and “Evaluating the

implementation of optimization”. The Bureau evaluates and monitors consistency

between these guidelines and the optimization implemented by respective Ministries

(Sudoh, 2007).

These promote simplification, rationalization, and efficient operation of administration

strategically and across the board to ensure overall optimization of the government.

In 2005, the Ministry of Economics, Trade and Industry issued a report from its

“Commission on The Best Practices of Functions and Practices of CIOs” and proposed

Japanese version of CIO competencies. There are fundamental institutional differences

between US and Japan; presidential system and parliamental system, political

appointments and carrier bureaucrats system, etc.

Although Japanese central and local governments introduced CIOs, these new figures

have not functioned in most of the entities. There are small numbers of exceptions

mainly thanks to the personal capability of the CIOs or the nominated CIO assistants.

As the number two of each organization became automatically CIOs, most of them

lacked the desired capacity, and as the number of CIO assistants were limited, the new

system had fundamental problem from the very beginning.

Successful CIOs and CIO assistants have pointed out difficulties to carry out their tasks.

A series of semi structured interviews to CIOs and CIO assistants in central and local

governments shows that many governmental institutions have legacy problems and thus

need feasibility study for renewal, however many organizations lack enterprise

architecture and process/system optimization plans (although formally they have one).

As project management methods should help reorganize the whole ICT structure, a new

logical process is needed not only for the ICT system, but also for the budget and fiscal

process of these organizations, which requires new policy process.

Although it is necessary to renew the domains, there are system boundaries related to

the existing vendors, which have rather fixed relationship with organizations. Many

CIOs also claim the difficulties to develop human resources, especially they point out

the lack of leadership, culture, political will, and commitments.

There are issues including financial resource and funding, infrastructure and law,

coordination among institutions, and standardization. These are not only problems for

CIOs but also for the whole e-Governance policy. ABC (Activity Based Costing) and

EVR (Earned Value Management) are useful for the quality and cost management and

improve procurement, however it is not easy to develop in public institutions. There are

now needs of ICT system for more transparency, better public service, and citizen

orientation.

In practice, there are various systems to be implemented to get the benefits; 1) for the

front office; realistic solution is needed for G2B and G2C, especially for public service,

e-application, e-bidding, taxation, pension, custom and so on, 2) for the middle office;

innovation is needed for knowledge management, 3) for the back office, good and

balanced management with practicality is needed to organize Back Office Systems and

HRM. To implement these, the governments need financial resources and thus policy

and strategy. In order to have good policy and strategy, they also need capable

personnel.

3. Japanese Changing Demography and System Fatigue

Japanese rapidly changing demography has been an important drive force for its

administrative institutions and policy strategies, especially at the local level, where most

of the public services to the citizens is provided. Thus the local governments have been

coping with the changes in various ways; one of the instruments has been municipality

merger.

The history of municipality in Japan is a history of scale expansion by municipality

merger since the era of aspiring to be a modern state in the late 19th

century. In the era of

rural society before that, more than 70,000 local communities existed all over the

country. These communities were integrated into about 10,000 municipalities to share

the national administrative functions. This integration was carried out for implementing

administrative services in the modern state. In the 1950s, the era of reform after the

WWII, most municipalities of the population fewer than 8,000 were integrated into

approximately 3,500 municipalities, to enable them to have administrative and financial

capabilities to establish and manage junior high schools, which became a function for

the municipality (Tamura, 2006, Kanai, 2007).

In the era of the economic growth after that, municipality merger was not so active

because financial adjustment system worked well, and emphasis as a nation was placed

on expansion of administrative services to become welfare state. In the 1990s, though,

situations drastically changed, and merger was actively promoted again.

The reason for promotion is that the nation’s decreasing population, especially

accelerating aging and low birth-rate in rural areas in the first place. It is imperative to

form an effective and financially and administratively enable local administration to

maintain both the local community and high standard social welfare services. Secondly,

it seems more realistic to form a municipality that fits people’s living area. This will

eventually improve efficiency of administrations both of the national and local

governments, because even in urban areas, living and trade areas are expanding beyond

the borders of municipalities due to development of motorization. People commuting to

the urban areas neither do not share the burden of services in the areas they receive, nor

have their say in urban policy making process. This problem can be solved by forming a

municipality integrating surrounding urban areas (Kudo, 1999). Lastly, as

decentralisation proceeded, local governments have come to decide and implement

policies on their own, which naturally requires sufficient administrative and financial

capabilities. This prompts the governments to hire many staff with excellent

professional skills to administrate governmental activities that ask for higher expertise,

such as welfare services and environmental issues. It is imperative that any municipality

must be a certain scale for doing so (Morita, 2008). These factors all contributed to a

large scale of municipality merger all over Japan in the late 1990s.

This merger was promoted by special act that set a five-year limit. The purpose of the

law and the scale of its targeted municipalities were vague, compared to mergers in

1950s. Initially, the purpose of this merger was to improve capabilities of smaller

municipalities in rural areas where falling and aging population was conspicuous, and

several measures for promoting it were considered. However, political circles strongly

demanded promotion of merger of all local governments in Japan and the target of

merger expanded accordingly (Tamura, 2006).

From a viewpoint of the national government, the goal of merger should be to form

cities with a certain size in rural areas as the hubs of regional development by

integrating smaller municipalities in order to maintain the standard of administrative

services at local governments, which had to deal with falling population and aging

society. At the same time, though, municipality merger could rob municipalities of local

communities as their identities. This would surely instigate strong resistance from

residents in the local communities. Thus, in promoting merger, careful and powerful

measures were prepared.

First, considering it was the era of decentralisation, merger was based solely on the will

of the municipalities concerned. In other words, it was basically each of concerned

municipalities that decided to merge with a partner after consideration of their

problems; the central government did not force them into merger in the name of law.

Many municipalities with a strong sense of autonomy fought back against a request of

merger. Not a few mergers were thwarted as negotiations of the other party deadlocked

due to various reasons, including the name of a new municipality, political pluses and

minuses, resistance from surrounding areas fearing they might be devastated because of

the neighbourhood merger.

Second, since the merger was to be based on voluntary decision by the municipalities

concerned, they tried to find better partners on better conditions. Many municipalities

would not possibly be able to find their match even if they eagerly wanted to. Even after

merging with their match, some of the merged municipalities would not be able to

strengthen their administrative and financial capabilities. To avoid it, prefectures

prepared for a preferred match for each municipality within their areas, and directed it

to the advisable pattern they prepared. Their prepared matchmaking pattern had no

binding force, though. So the merger did not worked out well as prefectures expected.

Lastly, when promoting merger, the measure of combination of reward and punishment

were offered to municipalities, since a strong opposition from their governments and

residents were naturally anticipated. The reward measures included keeping seats of the

assembly members that were to be lost after merger, continuing financial assistances

such as the tax grant for a certain period of time, and creating grant systems and the

special merger bond. But these measures did not achieve much result, even though they

did not set time limits. Then the punishment measures were introduced at the very last

minute. The central government did not declare clearly to do so, but it cut local

allocation tax grants to smaller municipalities for which the mergers were most needed.

This action was a final blow to them when their financial situations were really bad.

Many of municipalities inclined to merger (Morita, 2007, 2008).

4. E-Government in Aging Society

Japan is one of the most aged societies in the world and one of the countries with

highest ICT technology. Its e-Government implementation has many issues due to its

demographic problems and its administrative procedures, not necessary due to its

technological capacity.

Digital divides has been visible between generations and among geographical areas, the

first due to the ICT literacy and the latter due to the ICT infrastructure. While he ICT

infrastructure has been widely and quickly developed during the last two decades, less

attentions and thus less measures have been paid for ICT literacy. Since the boomers are

currently in the phase of retirement, there would be still a decade or so to accommodate

non-digital-generation retirees. Many predict that until 2050, there would be numerous

greying citizens active in the society, while the current e-Government strategy has not

yet considered seriously about the issue.

As written above in Chapter 2, Japanese government considered about the aging society

and digital divide issue through “Panel on Revitalization of Local Community and

Ubiquitous Network Society”, but its result was limited, since most of the projects

developed under the panel remained on the paper.

Issues related to declining population and aging society were recognized and started to

be considered seriously in 2006, when the Japanese population hit its historical

maximum. As described in Chapter 3, local government system underwent radical

surgery prior to this year, in order to tackle the future issues. Regarding the

e-Government and e-Governance policy, however, not so many measures were taken.

4.1. Research and Recommendation on “Toward the Construction of e-Government

kind to Ultra-Aging-Society”

The research in question was conducted by LASDEC (Local Authorities Systems

Development Center) and e-Government Research Institute of Waseda University,

between 2010 and 2011 throughout Japanese local governments, involving mostly

senior citizens and administrators. The author was involved in this project as one of the

committee members nominated by the LASDEC and as one of the researchers

commissioned by the e-Government Research Institute of Waseda University.

We organized 6 meetings and discussions among related operators and citizens,

questioners, semi-structured interviews to best practices, study-tour to Belgium, France

and Italy, and publication of report, which includes policy recommendations.

One of the essential parts of the research was the questioner. Since the government and

thus LASDEC, did not have any concrete data regarding the ICT use of elderly citizens,

we decided to conduct questioner to understand the reality.

The questioner was realized between 2010 and 2011 through LASDEC website and was

reinforced with several face-to-face meeting in several municipalities to understand

better the situation and to interpret the answers given through web questioner. In some

cases, we found the answers given through web questioner contradictory, considering

the answers given in face-to-face meetings.

The total number of the respondents was 306; 182 men (60.1%) and 124 women

(39.9%). Respondents between 50 and 54 years old were the most numerous with

17.3%, followed by those between 45 and 49 with its 16.3% and those between 60 and

64 with its 15.4%. Respondents over 75 made only 4.6% of all, and over 65 made

25.5%. Regarding the family structure, 45.4% lived with children or children with their

family, 25.2% lived with spouse, 23.5% lived alone, and 5.9% lived in some structure.

When it comes to their annual income, 34.0% lived under 31,250 US dollars and who

lived under 62,500 US dollars made 59.8%. This shows that many retirees live with

rather modest pension and thus their spending could be limited.

Among personally possessed IT equipment, mobile phone was most popular with its

92.5%, followed by TV with its 90.8%, PC with its 90.2%, and house telephone with its

84.0%. This shows that most personally possess mobile phones, TV and PC are

sometimes shared with their family members.

Among frequently used functions of IT equipment, 93.5% used ATM services, 91.8%

talked using mobile phones, 90.8% connected to internet with PCs, 87.3% bought train

ticket using automatic ticket vending machines, 70.9% connected to internet and/or sent

messages with their mobile phones, 64.7% recorded TV programmes using automatic

video recording system, and 52.0% used satellite navigation system of their vehicles.

This shows that who owns mobile phones can telephone, but only 77% of those use

them to connect to internet and/or send messages. While ATM and automatic ticket

vending machines are more frequently used equipment, satellite navigation system is

less used, because of its complexity. 89.2% answered that they can use certain

equipment because they used to use them and 52.3% said that they learned by

themselves.

Among government on-line services, searching and booking of public facilities is the

most frequent used services with 53.9%, followed with retrieval of tax and/or pension

forms with 29.1%, and searching of books among public libraries with 26.8%, while

20.9% never used any services. 37.7% answered that they never used any services

because they do not have any necessary services, 32.8% said they did not know the

existence of these services, and 31.1% preferred to go directly the counter.

In terms of the devices to access to government services, 73.2% preferred to use PC,

while 37.6% preferred traditional paper-based newsletters and pamphlets and 36.3%

preferred mobile phones. It is interesting to note that although more than 90 % owns

mobile phones, many preferred other devices and not mobile phones. 68.0% answered

that they want to use on-line application services, while these services had long existed.

This means that government e-services are not recognized. In fact, 47.7% never used

any e-application services. E-Tax-filing is considered most annoying e-application

services from 26.8%, also because it needs to be accompanied with paper

documentations.

About 35% showed their anxiety toward on-line services and 55.2% wanted to use those

new services through touch screen.

The results show that one third of elderly people lives alone and many uses mobile

phones, although 20% have never used e-Government services, one third of these

declares that they did not know its existence, one third because there are no interesting

services to utilize, the last one third prefers to go directly to the counter.

Most interesting thing is that the many elderlies are already coping quite well with ICT

in general, but not necessary so with e-Government, mainly due to its poor services and

distrust to the government and the administrative institution themselves.

Findings

Literature and practices show that e-Governance is becoming an increasingly important

aspect of public sector reform and it seems that its importance is increasing in Japan too.

However the Japanese e-Governance policy has been promoted mostly from an

industrial perspective. Even recent developments are strongly oriented towards business

and investment. This characteristic is not exclusive to e-Governance policy, but

common to Japanese public policies as history shows.

The Japanese public sector reform is characterized by government led incentive

packages, strongly business-oriented initiatives, promotion of private sector

participation, small scale priority and best practice, and a pilot project oriented

approach.

Strong government involvement is one of the most frequently studied characteristics of

Japanese industrial policy (Callon, 1995, Kerbo and McKinstry, 1995, Okimoto, 1989).

For example, the role of the Ministry of International Trade and Industry (MITI, after

the government restructuring in 2001, renamed the Ministry of Economics, Trade and

Industry, METI) has been decisive in many of the most important technological,

industrial, and economical developments12

. The descriptions of “Japan Inc.” are not

merely journalistic affirmation, but are a profound description of the reality. These

characteristics have been criticized by both Japanese and by international opinion, as

manifestation of dysfunction of democratic governance and domination of bureaucrats

over politicians in terms of policy making (Hayao, 1993)13

. In fact, for many years in

Japan, the issue of how politics could be independent from and overcome the

bureaucracy has been considered critical to the successful political and administrative

reforms.

During the public administration reform in the 1980s, promotion of private sector

participation, so-called “vitalization of private sector”, became one of the key strategies.

Privatisation and deregulation were implemented, mainly to liberate the market and

stimulate the business activities rather than to reform the public sector itself. Regulation

and deregulation have been both utilized as an instrument to stimulate private business

in Japan as are described in regulatory capture theory.

Recently, with the introduction and promotion of decentralization, priority on local

initiatives, best practice at small scales, and pilot project orientation, have been

dominating the Japanese public sector reform. The centre-periphery relationship has

been one of the crucial issues for the Japanese democracy and its public policy (Samuels,

1983). During the 1980s, the government started to seriously empower local

government. The process has been disturbed by many factors; financial problems,

human resource management, political will and involvement, and institutional problems.

Meanwhile, a pilot project oriented-approach was introduced through technology-driven

issues, such as high-technology industry, ICT, and e-Governance (Kudo, 2001, 2003)14

.

This process has been not usual in Japanese policymaking and implementation, where

the rule of law used to be very strict.

These characteristics were noted among the important policies and reforms in the past

and also are seen in the process of e-Governance. In brief, it is possible to summarize

that although the recent reform aims to restructure the public sector, it shows clearly

almost all of the typical characteristics of traditional Japanese public sector.

E-Governance policy in Japanese local government is strongly influenced by national

government policy and projects, although there are some local initiatives. Many of them

12 In fact, Callon points out the role of MITI in Japanese High-Tech industry development through

historical cases. 13 Hayao points out the weak role of policy makers in public policy making. 14 Papers on e-Government and ICT policy by Kudo point out the accountability issue of

pilot-project orientation.

are pilot projects promoted by the Ministry of Internal Affairs and Communications. In

order to legitimize these pilot projects, government has enacted various related acts and

recommendations, making the overall e-Governance strategy unclear. This is why many

point out the lack of comprehensive e-Governance policy.

While national e-Governance policy pays strong attention to accountability and security

concerns as shown in a series of acts and projects, local initiatives pay more attention to

communication to the public. Many local projects try to connect public administration

institutions to the citizen, although this is not an easy task.

Japanese e-Governance policy has significantly different characteristics compared to

equivalent policies in many other countries. However these are features common to

Japanese public policy. Many other public policies were promoted from an industrial

point of view and served business and ICT policy was especially strategic because of its

value for investment. At the same time, some local initiatives stress the importance of

and the potential to strengthen communication through e-Governance and this might be

an interesting aspect.

Issues related to declining population and aging society were recognized and started to

be considered seriously in 2006, when the Japanese population hit its historical

maximum. For example, local government system underwent radical surgery prior to

this year, in order to tackle the future issues. Regarding the e-Government and

e-Governance policy, however, not so many measures were taken. Policy and strategy of

e-Government in aging society is needed in this aging Japan.

First, government needs to understand the needs of elderly population. Second, it needs

to improve mismatch between demands and offers. Third, in order to promote

government e-services, it needs to guarantee multiple accesses. Finally, it should

develop new applications to accommodate various voices.

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