Performance Management in Japanese Local Government

  • Osamu KoikeEmail author
Living reference work entry
DOI: https://doi.org/10.1007/978-3-319-31816-5_3248-1

Synonyms

Definition

Characteristics and current situation of performance management among Japanese local government.

Introduction

Measuring performance of organization for better public service delivery is an essential part of recent public sector reforms in many countries (Bouckaert and Halligan 2008; Boyne 2010). It is widely recognized that a “performance management” in public sector reform is an application of new public management (NPM) disciplines that seek economy and efficiency of public organizations through a competitive market for “public choice.” A movement for performance management started in the US local governments in the late 1980s and spilled over to non-Western countries including Asian developing nations (Koike 2013). In Japan, in the rise of “bureaucracy bashing” in the early 1990s, public managers were forced to be more accountable to the efficiency and effectiveness of public works such as dams and highways. In the mid-1990s, reform-minded local public managers attempted to change traditional bureaucracy through the introduction of the brand-new business practices of results-oriented management. Then, public-spirited officials criticized that a simple emulation of business model is even harmful to equity or fairness of public service provision. However, a chorus of “value for money” or cost-benefit analysis has overwhelmed traditional rule-bound, process management of the local public organization.

In Japan, as in other industrialized democratic countries, performance management in the public organizations has developed at local level and, then, adopted in the national ministries and agencies (Koike et al. 2007). According to the national survey in 2013, the vast majority of local governments have already established some forms of performance measurement system (Ministry of Internal Affairs and Communications 2014). The main objective of performance measurement is to transform local government from a traditional “input (budget)-based” administration to the “results (outcomes)-based” public management. However, analysis of the current situation of performance management in local government reveals that the methodology remains a measurement of the performance of a small piece of tasks and projects. It suggests that a philosophy of results-based management is not fully understood by local public officials in Japan.

History of Performance Management in Japan

After the oil shock in the late 1970s, Japanese local government faced a fiscal crisis due to the fall of local tax income. It forced prefectural governors and municipal mayors to promote administrative reforms and “cutback management” consisting of budget cut, personnel reduction, and contracting out of service provisions such as garbage collection. In the age of reform, business-minded governors and mayors attempted to change bureaucratic culture of local government through the introduction of business management models such as management by objectives and “total quality management (TQM).” However, these efforts were unsuccessful in the 1980s (Jun and Koike 1998).

In 1995, the governor of Mie Prefecture, Masayasu Kitagawa (1995–2003), launched a “project evaluation system” as a core of his administrative reform packages. Project evaluation system is a self-evaluation in which public officials evaluate the cost-effectiveness of tasks and projects of their own, by setting “targets” and performance indicators (Umeda 2000). It targeted all the tasks and projects currently being implemented in Mie Prefecture. As many argued, Japanese public organizations have overemphasized budgeting and planning but neglected to review their effectiveness (Yokoyama 2009). Governor Kitagawa attempted to abolish a culture of “using up the budget” and “following the precedents,” saying that “public organization should learn what the management should be from private sector organization.” In fact, a self-evaluation system is a borrowing of management by objectives and TQM in which employees participate in the management cycle of “Plan-Do-See.” It was expected that public employees can realize the real cost of public service through the self-evaluation of their tasks and projects. Prior to the introduction of task/project evaluation system, Governor Kitagawa organized the intensive training program for directors and managers to learn the latest business models. In the training program, government officials also studied public management reforms using Osborne and Gaebler’s best-selling book, Reinventing Government (1992), as a textbook (Umeda 2000). In Mie Prefecture, project evaluation system has introduced in the headquarters offices in 1996 and extended to the local branch offices in 1997. Finally, a total of 3200 tasks and projects were reviewed. The results of evaluation were disclosed to the public through the website of Mie Prefectural government.

A task/project evaluation system of Mie Prefecture made a great impact on the promotion of performance measurement in Japan. In fact, a number of local governments have launched similar self-evaluating systems modeled after the task/project evaluation system of Mie Prefecture. According to the national survey in 2013, all of the prefectural governments, 95% of designated cities (metropolitan cities), and 57.7% of municipalities (cities, towns, and villages) have introduced some forms of “administrative evaluation” system (Table 1).
Table 1

Diffusion of “Administrative Evaluation System” as of 2013

 

Prefecture

Designated city

Municipalities

Total

Established

47

19

994

1060

Planning

0

0

551

551

No plan

0

1

177

178

Total

47

20

1722

1789

Diffusion rate

100%

100%

57.7%

59.3%

Source: The Ministry of Internal Affairs and Communications (2014), p. 1

Note: In the national survey, the Ministry of Internal Affairs and Communications uses a term of “administrative evaluation.” A definition of “administrative evaluation” is “a judgment of validity, achievement, and results of policies, programs, and projects, using clearly defined criteria and indicators, in the time of ex-ante, ex-post, or during the work.” Due to the vague definition, the national survey data contains various types of evaluation systems in local government

Current Status of Performance Management in Local Government

In theory, performance management is divided into three distinctive actions: measuring performance using indicators, evaluating efficiency and effectiveness of projects and programs, and taking organizational actions for results or outcomes (Boyne 2010). Applying this theory to the “administrative evaluation” implemented in Japanese local government, it is safe to say that the most of the Japanese local governments implement a “performance measurement.”

Table 2 lists the purpose of “administrative evaluation” in local government. The most frequent answers are “improvement of efficiency,” “achieving better results,” “changing employees’ mindset,” and “the establishment of PDCA (plan-do-check-action) cycle” in descending order. It is interesting that the “improvement of planning process” is less concerned. It supports the evidence that many local governments which have introduced “administrative evaluation” are in fact implementing the performance measurement (Tanaka 2009). Quite interestingly, “customer orientation” is the lowest in the list. It is suggested that local governments see the “administrative evaluation” as a tool for internal management rather than a strategy to regain public trust in government by showing how they improve services for the public.
Table 2

Purpose of administrative evaluation

 

Prefecture

Designated city

Municipality

Total

Improvement of efficiency

87.2%

84.2%

93.4%

92.9%

Achievement of better results

97.9

84.2

81.3

82.7

Budget cut/fiscal reform

38.3

47.4

55.0

54.2

Improvement of planning process

59.6

47.4

37.9

39.1

Establishment of PDCA cycle

89.4

89.5

75.7

76.5

Customer orientation

31.9

26.3

23.9

24.3

Improvement of public service

48.9

73.7

67.0

66.3

Accountability

85.1

100.0

66.4

67.8

Changing employees’ mindset

66.0

78.9

82.2

81.2

Source: The Ministry of Internal Affairs and Communications (2014), p. 5

On the subject of administrative evaluation, almost all local governments are absorbed in the measurement of the performance of “tasks and projects.” Evaluation of “programs” is implemented in 78% of the prefecture and 84% of designated cities, whereas it is implemented in 47% of municipalities. It indicates that it is difficult for municipalities to engage in the evaluation of programs due to the limited resources.

Do local governments utilize the results of performance measurement? A majority of local government answered that the results of the evaluation are reflected in the budget request. On the other hand, 26.7% of prefectures, 29.4% of designated cities, and 41.2% of municipalities replied that the results of performance evaluation are reflected in the budget assessment by the finance division. It indicates that the central management officers are less positive in the utilization of the results of performance evaluation in the budgeting. This tendency is observable in the other areas of administrative management such as staffing and auditing.

The above findings from a national survey indicate that much remains to be done in the promotion of performance management at local level. As shown in Table 3, many local officials feel the difficulty of evaluation indicators, efficient evaluation, linking evaluation with the budget, and changing mindset of employees. It assumes that a kind of “evaluation fatigue” is spreading among local public officials.
Table 3

Problems in the implementation of administrative evaluation

 

Prefecture

Designated city

Municipality

Total

Setting evaluation indicators

76.6%

115.8%

78.5%

79.1%

Accountability to the resident

34.0

57.9

35.5

35.8

Utilization for budgeting

63.8

100.0

70.3

70.5

Utilization for staffing

31.9

52.6

39.2

39.1

Utilization for legislation

4.3

10.5

17.4

16.7

Utilization of external evaluation

17.0

42.1

43.9

42.7

Linking to long-term plan

31.9

63.2

55.0

54.1

Changing employees’ mindset

48.9

63.2

59.1

58.7

Efficient evaluation work

72.3

100.0

75.7

76.0

Source: The Ministry of Internal Affairs and Communications (2014), p. 12

Note: Among 20 designated cities, Kyoto, Kobe, and Fukuoka evaluate policies separately from projects, and thus the aggregate data is not consistent with the number of designated cities

Comparing current status of Japanese performance evaluation with a theory of performance management, it can be said that many of local government remains stalled at the initial stage of performance measurement. The efforts of Mie Prefecture that opened a breach in the development of performance management system in Japan must be fairly judged. However, the evaluation of all of tasks and project is quite burdensome and even harmful for municipalities. In general, a task/project evaluation is conducted on a yearly basis. In the beginning of the fiscal year, the frontline staff set yearly goals and targets and evaluate how much they have achieved goals and targets using appropriate indicators by the year end. For effective implementation, those who evaluate tasks and projects must be knowledgeable on how to improve the outcome of tasks and projects. If they are competent, they can select appropriate indicators for the evaluation of outcomes. However, if they lack knowledge on outcomes, frontline staff would select “easy” quantitative targets and goals. After all, they only check the implementation status of the projects.

In the self-evaluation process, it is the planning division or the administrative management division that prepares evaluation sheets for the frontline staff. The evaluation sheets should be tailored to be applicable to the various types of projects and programs. Nevertheless, a large number of municipalities use a standard type of evaluation sheets. It is ironical that new public management criticizes the “one-size-fits-all” approach in the administrative reforms. In Japan, however, a mimic isomorphism (DiMaggio and Powell 1983) has prevailed in the performance evaluation.

Another adverse effect of task/project evaluation system is a limitation of scope in the evaluation. Tasks and projects are the measures to achieve objectives of a program, and programs are the constituent of upper-level policy. It requires frontline managers and staff to understand a whole picture of projects, programs, and policies they are concerned. Binding frontline staff to the evaluation of tasks and projects would reduce the scope of performance measurement. In this regard, it is good news that some local governments attempt to link project evaluation with the evaluation of strategic programs. For example, Yokohama city government has assessed the performance of the midterm 4-year (2013–2017) plan. Using a performance rating of A, B, and C, city government evaluates the performance of 36 programs in the fields of public welfare, economic development, urban infrastructure and environment, and safety of community living every year. In 2016, city government compiled the interim assessment report and disclosed to the public. A final assessment report will be compiled in 2018 (Yokohama City Government 2016).

Future Challenges

In spite of a rapid diffusion of performance measurement system among local governments in the last decade, it is hard to say that a philosophy of result-based management has embedded in the basis of public organization management. As shown in the national survey in 2013, the performance measurement remains burdensome for the most of the local public officials. However, technical issues are not an essential problem. Rather, problems are deeply rooted in their recognition on the objectives of performance management. Remember that the “performance” is a key concept of NPM reforms. It puts economy and efficiency at the top of public philosophy. In the performance management, the frontline managers and staff are forced to maximize economy and efficiency of public service delivery. In this situation, they must make a judgment of abolition or continuation of existing programs and projects in accordance with a norm of economy and efficiency. However, it is not an easy task for the frontline worker. If the managers see the performance management merely as a convenient tool for budget cutting, it is difficult to gain the cooperation of frontline staff. We have learned that the efficiency is the “axiom number one in the value scale of administration” (Gulick 1937). However, frontline officials do not work only for maximizing technical efficiency. Rather, they are working for the public interests. It arises a question of what can be the incentives for performance management (Swiss 2005). If a manager compels their staff to obey the doctrine of NPM, those who are working for the equity and fairness of public service would be in trouble. It indicates that cultural elements need to be considered in the promotion of performance management in the public sector organization.

Again, the reform of public organization is contingent upon local context. In Japan, the public officials, regardless of positions, move to different offices every few year. It discourages public officials to evaluate the performance of projects and programs that take long time period. In addition, the adoption of decentralized management in the performance management may intensify a bureaucratic pathology of “sectionalism” in the public organization. In a decentralized “silo” structure, it is difficult for line department officers to work across policy boundaries for better outcomes. For effective performance management, specifically in the administration of cross-cutting issues, line managers are required to have “a whole of government” perspective and work together for the shared outcomes (Christensen and Lægreid 2007).

Conclusion

It would be certain that a performance management can improve the accountability and transparency of local government to some extent. However, there exists a fundamental question of who evaluate the quality of self-evaluation (Wildavsky 1972). In Japan, nearly half of local governments have established the external evaluation committees, consisting of professors, lawyers, and voluntary citizens. These organizations are expected for making performance evaluation accountable and trustworthy. In most case, however, external evaluators only check the validity of self-evaluation reports compiled by the bureaucrat. The function of external evaluators is undeniable. However, before that, public managers need to recognize the power of citizen in the performance management. In case of waste management, for instance, local public managers can set an ambitious goal such as No. 1 in the reclining rate of waste. It could be achieved if they can mobilize a large number of citizens for collecting recyclable items. If the local government is ranked at top position among a thousand of local governments, it is a victory for both citizens and local government officials. In the model of collaborative public management, citizens are not just “customers” as NPM doctrine assumes. It would be true that citizens’ watchful eyes are a necessary weapon for the quality control of local public services. Collaboration can do more (Agranoff and McGuire 2003). When citizens collaborate with public organizations for better results, the local government can provide high-quality services with less expense. This is what we call a “high performance.”

The above discussion reemphasizes that a performance management is a contingent upon local conditions and contexts. It is safe to say that the last decade was a preparation period for Japanese local governments to find a model of performance management. What can be done in the next decade? It is certain that it is difficult for local governments to break through the stagnation without challenging their traditional bureaucratic culture. As Moynihan (2005) notes, performance management is an organizational learning process (Moynihan 2005). It provides a chance both for public officials and citizens to realize what the true enemy for better results is. It does mean that an introduction of performance management is not the end of the public organization reforms. Rather, it is a starting point for modernizing local governance in the twenty-first century.

Cross-References

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Authors and Affiliations

  1. 1.Graduate School of International Social SciencesYokohama National UniversityYokohamaJapan