Everyday Policy Studies No. en14

Location, Implication, and Ordering

 As mentioned in my essay No. en8 , the policy decision-making of a society has various influences on future generations of the society. Let us consider, for example, the policy decisions made by the Japanese government at the time concerning the Sino-Japanese War that began with the Marco Polo Bridge Incident (also known as the Lugou Bridge Incident) in July 1937, and the Pacific War that began in December 1941 when Pearl Harbor was attacked. The policy decision-making also resulted in a negative legacy for the post-war Japanese generations who had no involvement in the Sino-Japanese or Pacific Wars.
 This is an example of the externality of policy to future generations, like the externality of the measures against global warming that we considered previously, and can be called “intertemporal externality of policy.”
 What is important when comprehensively researching policies is how to define the location, implications, and ordering in identifying societies, cultures, history, social problems, policies, and people in a space-time universe composed of a time axis and a space axis. As a person with Japanese nationality today, how each person defines the location, implications, and orderliness regarding the historical matters of the Sino-Japanese War and the Pacific War may change human activities that try to make the present-day Japan a “better society”. Not all Japanese have enough information about these wars. If the cost is greater than the benefit by weighing the benefits and costs of obtaining additional information, then no further information will be acquired and information will be lacking. This situation is called “rational ignorance” in the literature of public choice that analyzes political processes from an economic point of view.
 Historical experts, governments, schools and the media in Japan and abroad have provided information on the Sino-Japanese War and the Pacific War to people in a rational ignorance situation. However, the information is just the particular information selected from the particular window of the information provider. Based on such information, each person defines the location, implication, and orderliness regarding the Sino-Japanese War and the Pacific War. Location, implications, and orderliness regarding not only war but also the subject of consideration can be defined as follows.
Location makes the matter clear in a categorized category and identifies its positional relationship. Implications give the matter a narrative meaning from a particular perspective. Ordering is to prioritize the activities to be carried out on a topic based on the location and implication of the matter.

(Author: Akira Yokoyama)

This essay is the English version of No. 58, September 3, 2019 on the Japanese website.

Everyday Policy Studies No. en13

True pathology in the US, where COVID-19 infection is the largest in the world―Inadequate medical security system and the severity of economic disparity at the base―

 No other developed country has the structural flaws in its social system exposed to daylight due to the spread of the new coronavirus. According to the statistics of Johns Hopkins University, as of July 7, the number of infected people in the world was 11.626 million, of which the number of infected people in the United States was 2.939 million, accounting for 25% of the world’s total and the world’s most infected. The main reason for this is that the Trump administration was reluctant to set up a virus inspection system and take measures against infectious diseases, has fallen behind even after taking measures. But that is not the only cause. There are two underlying structural problems in the US, inadequate medical security and widening economic disparity since the 1970s.
 In the US, there is no universal medical insurance system like other developed countries and private medical insurance system is common. The only public medical insurance system is Medicare for seniors over 65 and Medicaid for low-income earners. During the Obama administration, people were obliged to join private medical insurance. But now about 29 million uninsured people do not have private medical insurance because the Trump administration abolished its obligation. Many of these people are poor and do not have private medical insurance.
 Even if you have private medical insurance provided by the company, you will face into an uninsured if you are completely fired due to coronavirus effects. As a matter of course, compared to Whites, Hispanics and Blacks, who are relatively low income and uninsured without access to tests and medical care, have more diabetes and heart disease than Whites, and are at higher risk of coronavirus infection and death.
 Let us focus on the economic disparity. Comparing the Gini coefficients of disposable income after government transfer and taxation of households in the five developed countries in 2017, it is 0.390 in US, 0.359 in UK, 0.339 in Japan, 0.289 in Germany, and 0.242 in France. US income disparity is the largest. And comparing the ratio of the population with less 50% of the median disposable income to the total population as the poverty rate, the US is 17.8%, the UK is 11.9%, France is 8.1%. The poverty rate in the US is very high. The seriousness of these economic disparities, combined with the inadequate medical security system, has made the US the world’s largest coronavirus-infected country.

(Author: Masatoshi Katagiri)

This essay is the English version of No. 157, July 21, 2020 on the Japanese website.

Everyday Policy Studies No. en12

Free Higher Education and Placing Regional Private University under Public Management (Continued)

 Furthermore, according to the referenced materials in the beginning paragraph, the number of university students at undergraduate and graduate schools is about 2.91 million in 2018, about 2.14 million (74%) of which are private university students. The number of universities is 782, 603 (77%) of which are private universities. Overwhelmingly private universities support higher education in Japan. However, according to the data: “The Publicization of Regional Private University!” aggregated by Obunsha Education Information Center, 257 out of 577 private universities (44.5%) could not make their quota because of the shortage of applicants in 2016.
 Smaller freshwater colleges with an annual enrollment limit of less than 800 account for 72% of the total private universities and colleges. Some point out that about 300 universities and colleges, smaller freshwater colleges will face managemental and financial difficulties as the 18-year-old population decreases in the future. (Economist, special edition: University Disappearance, July 24, 2018 issue.)
 As described above, smaller freshwater colleges will surely face managemental difficulties when students move from local areas to metropolitan areas by free higher education measures.
 What is drawing attention as a proactive support measure is to convert smaller freshwater private colleges to public universities and colleges. The number of converted colleges is increasing. So far there are10 smaller freshwater private colleges converted.
In the document: “The View on Higher Education Policy” and another document : “Current Status and Issues of Financial Support for Higher Education with a Focus on Private Universities and Colleges”, the Japan Association of Private Universities and Colleges (JAPUC) pointed out that free higher education may fix tuition and scholarship disparities, and widen the disparities.
 JAPUC called on the government to increase current expense subsidies, but it is unlikely to do so, even if you expect a lot, because the country has a debt exceeding 1000 trillion yen. Then it seems unavoidable to convert smaller freshwater private colleges to public universities and colleges. But according to Obunsha’s Data as described above, most of financial resources to convert smaller freshwater private colleges to public universities and colleges are treated by local allocation tax. After all, it is a burden on the country. Anyway, we are entering an unavoidable era to question the way of the country’s and household’s financial burdens to support national, public, private universities, and to consolidate universities and colleges.

(Author: Masatoshi Katagiri)

This essay is the English version of No. 17, May 22, 2019 on the Japanese website.

Everyday Policy Studies No. en11

Free Higher Education and Placing Regional Private University under Public Management

 According to the reference materials: “Future Vision for Higher Education”, officially announced by Ministry of Education in 2018 and “Announcement of Report on School Basic Survey(final value) in the 30th Year of the Heisei Period”, the 18-year-old population will shrink from 2.05 million in peak 1992 to 1.18 million in 2018, and to 1.03 million in 2030. In contrast, university entrance rate increased from 24.8% in 1989 to 53.3% in 2018, and percentage of students proceeding to higher education (including university, college, and technical college) reached 81.5% in 2018, both of which were the highest records.
 The number of universities increased from 499 in 1989 to 782 in 2018. There is no doubt that university admission quota increase has affected the rising of university entrance rate. But the development of higher education confronts the hard reality that the 18-year-old population will further decrease in the future.
 The burden of higher educational expenses in Japan depends on household budget, unlike Nordic countries. According to the reference materials: “Percentage of Students Proceeding to Higher Education by Income Class”, submitted to the Financial System Subcommittee by Ministry of Finance, income inequality reflects inequality in university entrance ratio or in percentage of students proceeding to higher education.
 The government announced free higher education and educational burden reduction policy as part of social security reform for all generations in the report: “New Economic Policy Package”, and planned to enforce such policies in April 2020, using the consumption tax hike to 10% as a financial source.
 According to the Free Higher Education Law enacted on May 10, 2019, the government must reduce tuition and enrollment, and pay benefit scholarships that do not require repayment. Students from resident-tax exempt households and low income (i.e. annual income of less than 3.8 million yen) households are eligible for the scholarships.
From the viewpoint of equal educational opportunity, these measures can be evaluated, but there are concerns that concentration of students in metropolitan areas and acceleration of excess students outflow from local areas will happen. (The Daiwa-Soken Report: “Where Are the Students Flowing out by Free Higher Education” on April 5, 2019.)

(Author: Masatoshi Katagiri)

This essay is the English version of No. 13, May 15, 2019 on the Japanese website.

Everyday Policy Studies No.en10

President Trump’s Promises and Truth from the Perspective of Tax Policy (Continued)

 During the 2016 presidential election, President Trump advocated large-scale tax cuts which was Republican traditional policy, aiming to encourage economic growth and increase employment. He promised to reduce corporate tax rate from 35% to 15%, and simplify personal income rates into three tax rates, and review the estate tax etc.
Trump Administration and Republican Party passed the Tax Cuts and Jobs Act at the end of December 2017 and implemented it from January 1, 2018.
 It was large tax cuts of about $1.5 trillion in 10 years since 1986 Reagan’s Tax Cuts.
 The point of the tax law is as follows.
(1) corporate tax rate reduction from 35% to 20%
(2) elimination of taxation when returning overseas income, and one-time taxation of overseas assets
(3) reduction of maximum income tax
(4) reduction of estate tax
(5) repeal of the penalty on health insurance non-members
 What is the economic effect of the tax cut?
 Trump Administration took a bullish view that real GDP growth rate was 3.1% in 2018 and would continue to exceed 3% by 2020. But nonpartisan Congressional Budget Office predicts that real economic growth rate will drop to 2% in 2019-23, and to 1.7% in 2024-29. (The Budget and Economic Outlook:2019-2029)
 Trump Administration asserted that tax cuts and deregulation would encourage economic growth and tax revenue increase, then improve budget balance, and pay off debt in 8 years of his term. But corporate tax revenue fell 22% and 2018 budget deficit was$77.9 billion, an increase of 17% over the previous fiscal year. The Congressional Budget Office predicts that the budget deficit will be $896 billion in FY 2018, over $1 trillion in FY 2022, 1 trillion 310 billion in FY 2029. CBO also predicts that government debt will increase from $15.8 trillion in 2018 to $24.6 trillion in FY 2026.
 In addition, Trump Administration asserted that the Tax Cuts and Jobs Act was for the middle class and smaller businesses. But according to the Tax Policy Center Report : “Most of Tax Reduction Benefits Go to the Wealthy”, even if the Tax Cuts and Jobs Act was fully implemented, 99.2% of tax reduction benefits go to top 5% household (wealthy) and the third quintile (middle class) decreases tax benefits by 2.1%.
 Trump Administration’s reduction policy will have poor or undesired results in the long-term even if it has some short-term effects. That is the truth.

(Author: Masatoshi Katagiri)

This essay is the English version of No. 30, June 26, 2019 on the Japanese website.

Everyday Policy Studies No.en9

President Trump’s Promises and Truth from the Perspective of Tax Policy

 It’s rare that people stick with campaign promises as much as Donald Trump. He thought that fulfilling his promises to make America first was the best way to gain the confidence of voters and acted that way. How well are his main campaign promises for 2016 Presidential Election?
 Regarding trade policy, he had promised to withdraw from NAFTA. After taking office, he renegotiated with Mexico and Canada, and reached a new agreement with these countries in favor of the United States. The agreement is moving towards ratification. And he withdrew U.S. from TPP aiming for zero tariff in order to use tariffs to negotiate bilateral trade in favor of the United States. He also promised to reduce the trade deficit with China by increasing tariffs. U.S. imposed the first to fourth punitive duties on China which triggered counterattack punitive duties by China. As a result, it is developing into the U.S.-China trade war.
 Regarding environmental policy, he promised and decided to withdraw from the Paris Agreement which is the international framework for global warming countermeasures.
 Regarding energy policy, he promised the deregulation of resource development and indeed signed the presidential decree Promoting Energy Independent and Economic Growth.
 Regarding undocumented immigrant’s policy, he promised to build a wall along the border with Mexico. But he could not secure the budget for that because of the opposition of House Democrats. He was forced to declare a state of emergency and get money for the wall building out of defense budget.
 Regarding health care policy, he promised to completely abolish 2010 Patient and Affordable Care Act (Obamacare). But he could only abolish the penalty on health insurance non-members.
 While he may look good in trying to keep his promises as mentioned above, he is criticized from home and abroad with undesirable consequences because his promises themselves go against the times, and his trying to promote them ignoes international rules and democracy.

(Author: Masatoshi Katagiri)

This essay is the English version of No. 24, June 12, 2019 on the Japanese website.

Everyday Policy Studies No.en8

How to Resolve the Externalities of Policy

 Public policies implemented in a country or local government may have a negative effect on some people and populations, or may have a positive or negative effect on other public policies, or have a positive or negative effect on other countries or local governments. It can have a positive or negative effect on future generations that have not yet been born. These effects are termed “externalities of policy.”
 If there is a negative impact on some people or residents, it will be an applied problem of what was described in “one vote per person and one yen per vote” (essay no. 7). In addition, the reason why one public policy can have a positive or negative effect on another public policy is that there is a complementarity or competition between the policies, or there are commonalities or some relationship between the factors that cause the two policy issues. Examples of public policies that can have a positive or negative effect on other countries or local governments or future generations include policies such as global warming countermeasures and energy policies.

 Carbon dioxide (CO2) emissions from burning fossil fuels cause global warming and result in economic losses.

 Given the views of the Intergovernmental Panel on Climate Change (IPCC), global warming measures to reduce CO2 emissions in one country (local government) have a positive effect on other countries (local government) and future generations. This positive effect also includes the mutual impact of national and local governments. On the other hand, energy policies that result in increasing CO2 emissions have a negative effect.
 Regarding the externalities of policies between local governments (horizontal externalities) and the externalities of policies between the government and local governments in the country (vertical externalities), negotiations between the parties will be needed. The problem may be solved by the politics of the government, or by the courts of justice. On the other hand, regarding the externalities of policy between nations, that is, international ones, since there is no World Government, the problem may be solved through bilateral and multilateral negotiations (diplomatic negotiations). Alternatively, the problem may be solved by the International Court of Justice and other international courts as well as by the power of economic sanctions and military action.
 However, the problems related to the negative externalities of policy that impact on future generations cannot be negotiated between the current and future generations, and it is therefore necessary to consider how the current generation will solve them.

(Author: Akira Yokoyama)

This essay is the English version of No. 45, August 6, 2019 on the Japanese website.

Everyday Policy Studies No. en7

A Green Person and a Blue Person

 In a graduate school called the “Graduate School of Policy Studies” which was first established in Japan more than 20 years ago, I once gave my students a report assignment titled “A Green Person and a Blue Person.” After that, I gave the same assignment to my students in undergraduate lectures in my faculty and in graduate lectures at a Graduate School of Policy Sciences in Kansai that had no faculty, and conveyed the true charm of comprehensive policy studies to the students. The report assignment was as follows.

 ”In a certain society, a green person proposes that the members go to the right whereas a blue person suggests that they should go to the left, and then the society took the right path according to what the green person said. Next, enumerate the situations in which such a phenomenon might occur and consider the policy implications.”

 The contents of the reports of the students at that time, including graduate students, were extremely diverse, with various considerations added, and were very suggestive. I would like young readers, including middle and high school students, to think about the assignment by themselves first.
 The reason why this phenomenon occurs can be considered as follows: (1) Most of the members of the society were green people. (2) The green person was a legally authorized representative. (3) The green person was the supreme leader of the dominant religion. (4) The green person was considered beautiful from the aesthetic viewpoint of society. (5) The green person provided scientific evidence for the proposal. (6) In the light of past behavior, social confidence in the green person was higher than in the blue person. (7) The right path proposed by the green person gained more votes (the result of one vote per person). (8) The right path proposed by the green person had a greater net benefit to the society as a whole (the result of one yen and one vote). (9) The right path seemed to be easier to walk along than the left. (10) The green person’s speech was better than the blue person’s. And so on (including the overlapping of the above factors).
 Even if the blue person’s discourse was correct from a one-off scientific basis, when the blue person was thought of as a “wolf boy” based on past behavior, the scientific evidence alone would not be enough to cause the society to change. Furthermore, even if the blue person could say what is really correct, it is also true that the collective decision often depends on the feelings of those who just don’t want to accept anything the blue person says.
 From these above points, it seems necessary to consider the concept that “policy is a human matter.”

(Author: Akira Yokoyama)

This essay is the English version of No. 32, July 2, 2019 on the Japanese website.

Everyday Policy Studies No. en6

Various Judgment Criteria

 The last essay (No. en3) described the policy evaluation of “one person one vote” and “one yen one vote”. At that time, I considered policy evaluation on an individual basis. Behind an individual’s policy evaluation is his or her own value judgment, but the judgment criteria are also diverse.
 Now suppose that you are a recruiter and face the following situation where you are going to hire one of two candidates, A and B. The scores on the common test for English, mathematics and Japanese (out of 100) are, in vector notation, A (100, 10, 40) and B (40, 50, 60). With this data alone, think about which candidate should be chosen.
 A simple average score is 50 for both A and B, with the following differences: B has a smaller variance of scores than A and more stable scores. Comparing the highest scores, A has the highest ability level because B scored 60 in Japanese against A, who achieved 100 in English. Comparing the lowest scores, B has a higher level than A in the worst case scenario because A obtained 10 in math against B, whose lowest score was 40 in English. Comparing the median scores, B has a higher level than A because B managed 50 in math against A, who scored 40 in Japanese. There are differences in the candidates to be adopted depending on the comparison criteria, that is, the judgment criteria such as comparing average scores, comparing variances, comparing the highest scores, comparing the lowest scores, comparing the median scores, and comparing them in combination.
 In addition, depending on what the recruiter expects from the candidate, for example, if you want a person with high English skills, you will ignore the ability of mathematics and Japanese, compare only the English scores, and hire A instead of B. To compare the superiority of the raw scores of A and B from among all participants in the common test, data such as the deviation value rather than the raw scores is needed. Needless to say, information other than common tests through resumes and interviews (as well as non-cognitive skills such as social activities, exercise capacity, communication skills, coordination, diligence, and perseverance, etc.) will also be considered when selecting candidates.
 When there are multiple recruiters, each recruiter will choose between candidates A and B based on their own criteria, and how the set of recruiters’ choices leads to the final decision of the candidate depends on the final decision rules.

(Author: Akira Yokoyama)

This essay is the English version of No. 20, June 4, 2019 on the Japanese website.

Everyday Policy Studies No. en5

It’s the GSOMIA, stupid!

 In August 2019, the Moon administration of South Korea announced that it would terminate the General Security of Military Information Agreement (GSOMIA) with Japan. Moon withdrew this decision six hours before the agreement would expire on November 23. There were serious criticisms from within Korea and the American pressure was most crucial for Moon’s withdrawal. What is the meaning of Moon’s bizarre diplomatic mistake?
 GSOMIA benefits the security of Korea while it costs Korea nothing. Moon’s decision was in response to Japan’s tightened control, for security reasons, of South Korea-bound exports of key industrial materials such as hydrogen fluoride (HF). Moon interpreted Japan’s decision as a retaliatory move over South Korean court rulings in 2018 that ordered Japanese companies to pay compensation for Korean laborers during WWII. The Moon administration was violating the international treaty of 1965 between South Korea and Japan. Furthermore, it does not make sense to bargain the trade issue with a security issue that hurts Koreans. What is going on in Korea?
 The right step to solve the entanglement is for South Korea to comply with the 1965 treaty. In 1965 Japan and South Korea signed the Agreement of the Settlement of Problems Concerning Property and Claims and Economic Cooperation between Japan and the Republic of Korea. By the dramatic, destructive action of scrapping GSOMIA, Moon intended to instigate anti-Japan sentiment among Koreans for his political gain. Many Koreans can become natural victims of blind nationalism against Japan, at least for a short while.
 Moon was in a political crisis that involved Moon’s man, Cho Kuk, the Minister of Justice. GSOMIA was used to distract the people’s attention away to something outside. On top of that there is a fundamental issue. The Moon Administration supports anti-Japanese and anti-American policies. Kim Il-sung, the founder of North Korea, believed that, by establishing anti-Japanese and anti-American public opinion in South Korea, that country could be made vulnerable and an easy prey of North Korea, a Stalinist communist country. It seems that the Moon Administration is a dangerous government to its own people and in international relations.
 I hope that our neighbor, Japan, will understand that the Moon Administration is not in accord with the Republic of Korea founded in 1948. Korea is in a difficult situation now. Fortunately, many Koreans are working hard to restore liberal democracy by replacing the Moon administration by a normal government. There are signs of hope too. First: GSOMIA continues. Second: the Korean people are awakening as we saw in the huge gathering of 400,000 in the Kwang-wha-moon (or Rhee Syngman) square on October 3. The meeting continues every Saturday since then. People call this movement the “Citizens Revolution,” which asks Moon to step down. Third: a book like “Anti-Japan Tribalism” by Lee Young-Hoon is a best-seller in Korea now. The book criticizes the bigotry of anti-Japan sentiment in Korea. His article appeared in a current issue of 文芸春秋. I also feel optimistic from reading Fukata Yuko’s article(No.75, No.82) in this forum on friendship between ordinary peoples of Japan and Korea.
 But we should be wary that the destructive act of the Moon Administration continues. Recently, in the diplomatic white paper published by the Korean ministry of foreign affairs, the usual phrase “Japan is a valuable neighbor with whom we share values and understanding,” has been deleted.

(Author:Yong Yoon)

This essay is a reprint of No. 111, December 31, 2019 on the Japanese website.