United Nations Public Service Awards Case Studies

Like other metropolitan governments in advanced countries, the Osaka Prefectural Government has been confronted with two major challenges. The first is continuing fiscal difficulties caused by shortfalls of tax revenue after prolonged economic stagnation and the end of population growth. This requires more rigorous governance of public sectors that enables concentration of fiscal resources to selected important policy areas. The second is diversified political demands to local governments from well-informed and intricately divided urban residents caused by recent internet society. This requires more responsive governments that quickly cope with emerging political demands otherwise political stability will be threatened.
The first brings the question concerning government governance; how can we introduce a top-down decision-making system by political leaders instead of the present bottom-up decision-making system by the bureaucrats that put the utmost importance on continuity of policies and coordination with influential stakeholders? The second brings the question concerning democracy; how can we properly reflect people's diversified and swiftly changing political demands in an internet society to policy decision-making?
But the answers to the above two questions often contradict themselves; top-down decision-making may lead to an undesirable dictatorship while seeking for people’s diversified and swiftly changing demands may result in a lenient fiscal governance. New decision-making and decision-implementation methods that harmonize governance and democracy issues must be developed.

What is the initiative about? (the solution)
The policy-market research system aims to harmonize governance and democracy by changing decision-making and policy-implementation methods in the Osaka Prefectural Government from a bureaucratic bottom-up to a strong political top-down that places importance on the people's latent demands and less represented public opinions. The policy-market research system is constituted by two reformations in both public decision-making and policy implementation processes. The first is reformation of governance in a public decision-making process; We introduced strong top-down decision-making executive body, the “Strategic Headquarter,” chaired by the governor that makes decisions based on the policy-market research system built in as its important part. In the sessions of the Strategic Headquarter, results from the policy-market researches elaborately designed to reveal latent public demands and unrepresented public opinions for problem-solving are submitted to be given sufficient consideration. By this, we harmonized stern governance in the top-down method with democratic deliberation. The second is reformation in policy-implementation process; automatic revolving system of PDCA (Plan, Do, Check, and Act) cycle (Deming wheel) in public policy is introduced. The concept of PDCA cycle has been well-known in Japan but practical method to make it work had not been developed so far. We adapted private marketing research methods into four types of public researches; Operation Observation Research (OOR), Outcome Estimation Research (OER), Withdrawal Threshold Research (WTR) and Hypothesis-Testing Research (HTR). OOR is the reformed forms of so-called mystery-shopper research and customer satisfaction research in the private marketing research, and pushes "Plan" stage to "Do" stage. OER uses skills similar to private consumer monitoring and encourages the transition from “Do” to “Check” by measuring the ambiguous policy effects caused by policy implementation as a unified comparable data from the viewpoint of the citizens. WTR is a similar method to OER but, since combined with automatic withdrawal threshold as a sunset rule, the WTR is conducted more precisely and carefully using far more numbers of sample with less selection bias. WTR serves to push failed policies to move from “Check” stage to “Act” stage for renewal. Lastly, HTR, as mentioned above, assists changes of failed policies in the "Act" stage to more suitable ones for public demands using marketing research method such as hypothesis-testing, logic-tree analysis and target market segmentation. By this, we provided a mechanism where public opinion is reflected and common people checks are done in all stages of the PDCA cycle through the policy-market research system. As for the impact of the policy-market research system, by utilizing its large-scale internet questionnaire system, research cost is now one thirty fifth of the original cost and research time is shortened to one fifteenth of the original time required. But more important impact from a viewpoint of democracy is that the residents are given opportunities to reflect their demands and opinions to public policy-makings besides traditional political channels. Thus both the government and residents draw benefits from the project in administrative and democratic ways.

Who proposed the solution, who implemented it and who were the stakeholders?
The policy-market research system was proposed and introduced by the former Osaka Governor Toru Hashimoto. As soon as he took office as governor, he launched comprehensive reforms of both public administrations and political systems. Having a background as a talented corporate attorney, he pointed out there is quite poor marketing research practice in public policy compared to those in the private sector. The situation was not different in other central and local governments in Japan because there had been no idea of “marketing” or “marketing research” in the public sector. He ordered to set up a new section for marketing research (the Policy Marketing Research Team, hereafter called MRT) in the Planning office of the Government. MRT was established as the first governmental section specializing in the policy-market research in Japan. The first thing that MRT members did was to ask help from the marketing section of leading companies based in Osaka and requested them to share their marketing research knowhow. Next, while making use of the know-how shared, these were revised for public use and after 1 month of deliberation, the MRT established the first official guideline named "Guideline for Policy-Market Research version 1.0". The "Guideline for Policy-Market Research" has been continuously developed since then and revised to version 6.0 at present. Along with this, the Strategic Headquarter has been introduced and a large-scale internet questionnaire system with over 2500 voluntary resident monitors was developed and launched first time in the public sector in Japan. The new research methods to revolve PDCA cycle were also invented after trials and errors of two years of on-site experiences after that. Through these practices, the policy-market research system has been gradually completed. As for the stakeholders of the policy-market system, it benefits all the citizens in Osaka, especially those who were less politically represented. It was completed by the close coordination with the Osaka Prefectural Government and companies that transferred their research knowhow and citizen monitors working voluntary basis.

Describe how and when the initiative was implemented by answering these questions
a. What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
We used three strategies to implement the policy-market research system. The first is to making use of the messages from Governor Hashimoto. Governor Hashimoto who was a well-known TV performer before taking office as a governor, frequently emphasized the importance of the policy-market research at press briefings, executive meetings and budget negotiation process in the government. This made policy market research a necessary procedure when planning a budget for a project or when reporting to the governor. The second is the setting of guidelines and arranging staff training programs. Almost all the staffs of the Osaka Prefectural Government had no idea about the policy-market research and some showed excessive reliance or unfounded rejection of the method. In order to wipe out these two extremes and to alter the organizational culture with regard to policy-makings, a an easy-to-understand and practical guideline was created and training programs for staff to study basic thinking and skills of the policy-market research were conducted in the quite early stage. The third is MRT's assistance to research projects in the government; MRT gave consultations to the government staffs in charge, operated their researches and analyzed them on behalf. By this, governmental staffs could acquire research skills and knowledge as On-the-Job trainings, while MRT was able to develop new research methods using actual subjects as clinical cases. In this way, the acquired know-how is constantly added to the guidelines and shared within the prefectural government.

b. What were the key development and implementation steps and the chronology? No more than 500 words
The development and implementation steps of the policy-market research system have three periods. The first period is the start-up period that began in February 2008 when the governor Hashimoto ordered to introduce private sector's marketing research methods to the public sector just after his inauguration, and ended in Spring 2009 when the Strategic Headquarter started its operation. During this period, the special governmental section (MRT) was established, the first version of the guideline was set up and a lot of researches were conducted as clinical cases. Through this period, the validity of private sector's marketing research methods was proved even in public policy-making areas if properly modified. Thus we named the marketing research methods modified to public policy-making the “policy-market research” in the guideline. The second period is the development period that began in Spring 2009 and ended in March 2011. During this period, a large-scale internet questionnaire system with over 2500 voluntary monitors was launched for the first time as a government in Japan. And the systematic research methods that constitute automatic revolving system of PDCA cycle of policy such as Hypothesis-Testing Research, Operation Observation Research, Outcome Estimation Research and Withdrawal Threshold Research was completed. The third period is the propagation period that began in Spring 2011 to the present. In this period, the system and techniques of the policy-market research system was completed and its results gained a high assessment nationwide; the National Governors Association honored the policy-market research as one of the top 27 best public administration practices in Japan among 2325 entries in 2011. Now we are holding symposiums, planning training programs for local government staff nationwide and publishing materials in an attempt to transfer our policy market research techniques and know-how to other local governments and university personnel. Especially, in May 2011, we were invited to "The International Conference on Best Practices and Innovations in Public Governance" held by the National Taiwan University and Taiwan Government in Taipei and taught the governments and personnel of the regional local governments of each Asian city Osaka's policy- market research system.

c. What were the main obstacles encountered? How were they overcome? No more than 500 words
Two main obstacles encountered during the project were problems concerning organizational culture and research technology. First, concerning organizational culture, many administrators were wary about reflecting public opinion gained through questionnaires because they were afraid of financial stringency caused by pork-barreling, as the policy reflecting public opinion does not link with a profit directly, unlike private companies. Therefore, policy market research was looked upon with disbelief. However, we were able to overcome this obstacle with the establishment of the Strategic Headquarters, which introduced a strong and transparent decision-making body that can handle both people's political needs and government's fiscal restrictions. Led by the strong leadership of governor Hashimoto, at the Strategic Headquarters meetings, which were fully opened to the press, decision making was done based on the research results, but not necessarily bound by them. Second, the obstacle concerning research technology was distrust for internet researches. So far, almost all the public researches of governments were conducted by mailing questionnaires to randomly sampled residents to secure statistical accuracy. But as this method needs considerable cost and time, private companies usually use internet researches in their marketing research today. Contrary to public researches traditionally conducted by governments, marketing researches attaches importance not to statistical accuracy itself but to availability in decision-makings for properly narrow down issues. Internet research is sufficient tools for that purpose but, as government staffs were not accustomed to the thinking of marketing research, they had strong hesitation to use internet research sticking to the traditional statistics theory. This obstacle was overcome by developing analytical techniques for an internet research that will interpret research results, including statistical errors, such as narrowing down the subjects or hypothesis testing through comparison of attribute groups. Using these techniques, evidence based policy-makings were made possible on the daily basis using internet with cheaper cost and shorter time.

d. What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
MRT is in charge of develops technologies, conducts trainings for the proliferation of the policy-market research and even undertakes studies for important problems. MRT is very small section in the government made up of three full-time officers and four of part-time researchers. The annual research budget of MRT, which is for the maintenance cost of the large-scale internet questionnaire system is approx. 600,000 Yen (7800US$). With this budget, about forty researches are conducted annually. As mentioned earlier, this system has cut research costs by 93% (or one thirty fifth of the original cost) and research time to one fifteenth of what was originally needed. In addition to this, MRT keeps a special budget for outsourcing internet researches to private research companies for important researches that need statistical accuracy. The special budget is 9,000,000 Yen (117,000US$), but this is still cheaper than the conventional questionnaire as only one third of the cost is used to conduct the necessary study.

Is the initiative sustainable and transferable?
The policy-market research system is highly sustainable for two reasons: one is its effective cost-performance and the other is the universality of its technologies. With regards to cost performance, by making use of the internet, which is widely spread in the urban areas, a wide range of public opinion can be gathered quickly and at a very low cost. Looking at the universality of its technologies, in policy market research, detailed information that directly connect to decision-making is acquired through hypothesis design and mathematical analysis techniques. However, these techniques can be commonly used all over the world as they are accumulated as marketing theories. Next, the policy-market research system is also highly transferrable. As long as internet is available, the policy-market research system is transferable to any other administrative organization in the world. However, a strong decision-making system that can maintain the autonomy of decision-making under financial restrictions is indispensible, even if it defies political pressure by public opinion. Otherwise, policy-market research will be evaded as a threat, or will bring about the fiscal bankruptcy by pork-barrel politics. In other words, policy-market research will serve as a strong tool to reform governance and democracy of public sectors.

What are the impact of your initiative and the lessons learned?
There are three impacts of the policy-market research system on administration. The first is evidence-based policy design. The necessity for that has been pointed out but only partially realized owing to high cost and complicated sampling process. An internet society has made it possible. The second is a new route to reflect public opinions on public policies. The policy-market research system is not a popularity vote but it reveals latent public demands or hidden minority opinion using marketing techniques by policy specialists in governments just as the traditional democracy reveals latent public demands or hidden minority opinion using deliberate discussion process. In other words, the policy-market research corresponds to deliberate democracy while a popularity-vote type research corresponds to so-called ballot-box democracy. The third is reformation of government organization. The change from bottom-up decision-making by the bureaucrat to top-down decision-making by political leaders also causes a separation of political decision-making process and bureaucratic policy enforcement process. In other words, we can reorganize government configuration or organizational architecture for further efficiency. Here we learn that the introduction of the policy-market research system means not only technology transfer but also establishment of substantial democracy in metropolitan areas and government organizational reform. The introduction of the policy-market research in the Osaka Prefectural Government, which was closely tied with the largest administrative and political reforms in its history done by the governor Hashimoto, shows this lessons clearly.


Institution Name:		Osaka Prefectural Government, Japan
Institution Type:		Government Department
Contact Person:		Tomitaro Kitami
Title:		Chief Executive Staff
Telephone/ Fax:		+81- (0) 6-6941-0351 / +81- (0) 6-6944-6619
Institution's / Project's Website:		http://www.pref.osaka.jp/kikaku/mr/
E-mail:		kitamit@mbox.pref.osaka.lg.jp
Address:		2-Chome, Ohtemae, Chuo-ku,
Postal Code:		540-8570
City:		Osaka City
State/Province:		Osaka Prefcture
Country:		Japan

The Problem

Solution and Key Benefits

Actors and Stakeholders

(a) Strategies

(b) Implementation

(c) Overcoming Obstacles

(d) Use of Resources

Sustainability and Transferability

Lessons Learned

Contact Information