1. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 1

2. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 2 Enhancing Public Accountability - National Performance Indicators and the role of the Board of Audit of Japan – Muneharu Otsuka Commissioner, Board of Audit of Japan

3. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 3 Overview of Todays Discussion 1.National Performance Indicators from Public Accountability Aspects 2.Major Indicators in Japan 3.Audit of National Performance Indicators in Japan 4.Conclusion

4. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 4 1. National Performance Indicators from Public Accountability Aspects 1-1 Public Accountability 1-1 Public Accountability The meaning, content, and social systems of public accountability have changed Recently public accountability to evaluation of policy achievement, performance plays an important role

5. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 5 1-2 Indicators and Public Accountability Indicators have added its value for public accountability Indicators have enabled Government to do fair and more effective policy evaluation Indicators have enabled Government to explain the results of the policy evaluation to the public more concisely In some countries, indicators measure nationwide socio-economic progresses, stimulate public debate, help Government decide on important issues These National Performance Indicators are epoch- making for public accountability

6. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 6 1-3 Three Key Points in Developing and Using National Performance Indicators i.Making National Performance Indicators logically and practically consistent with policies ii.Involvement of the general public and Legislative body and transparency in development process of Indicators for credibility of Indicators iii.SAIs check and evaluation of National Performance Indicators

7. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 7 2. Major Indicators in Japan 2-1 Outline 2-1 Outline Ministries and Agencies in Japan established a variety of credible statistical indicators Major nationwide indicators To show living standard of people other than economic aspects shown by GDP and to make individual indicators concise to the general public and policy makers 1974 Social Indicators (SI) 1986 New Social Indicators (NSI) 1992 Peoples Life Indicators (PLI)

8. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 8 Social Indicator (SI) (from 1974) New Social Indicators (NSI) (from 1986) Peoples Life Indicator (PLI) (from 1992) Back ground Review of relying too much on economic indicators Stable economic development, rise of income, diversification of ones interest in Japan Overpopulation in Tokyo Need to measure varied good living conditions in the provinces Characte ristics 10 aspects of social life including health, education etc. based on 261 indicators Beginning an attitude survey and international comparison 8 aspects of life area(84 indicators), 11 subjective indicators, and 6 special area (53 indicators) 8 aspects of activity of life, and 4 aspects of value of life Including subdivided indicators for each prefecture

9. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 9 Peoples Life Indicators (PLI) Established in 1992 Background of 1980s: Despite high per capita income, people could not sense high living standard, needed more realistic indicators Over-population in Tokyo, needed to measure varying and good living conditions in provincial areas

10. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 10 PLI: Indicators of 8 activities of life, and 4 value of life SecurityFairnessFreedomComfort Work (Example) Unemployment rate (out of 10 indicators) The rate of the disadvantaged who work (out of 8 Indicators) The cases of starting a business (out of 7 indicators) The rate of overtime work (out of 7 indicators) Living indicators Consumption indicators Raising children indicators Indicatorsindicators Health indicators Play indicators Study indicators Communication indicators

11. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 11 Life Reform Index (LRI) Established in Feb, 2003 Purpose: To evaluate the incumbent cabinets accomplishment of its Structural Reform Program directly influencing peoples living conditions LRI divides into 10 indexes. 10 indexes divide into sub- indexes

12. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 12 Structure of Life Reform Index (LRI) Level 1 Level 2 Level 3 (10 aspects) (points of evaluation) (statistical indicators) LRI Creating good Fair and Free Number of used living conditions competition in house selling housing market and purchasing Creating good cases working conditions : : : : Creating secure conditions

13. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 13 Structure of Life Reform Index (LRI) Level 2 Level 3 (aspect) (Points of Evaluation) (Statistical Indicators) Creating good living Fair and Free Number of used house conditions competition in selling and purchasing cases housing market Shorter Average commuting hours commuting time Better house Average floor square purchasing measure of newly purchased conditions house Average annual income versus house purchasing cost ratio

14. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 14 10 Aspects of Life Reform Index Life Reform Index Creating good living conditions Creating good working conditions Creating good conditions for education Creating good conditions for raising children Creating good conditions for women Creating good conditions for the elderly Creating mobile conditions for people and information Creating good environment Creating good conditions for the young Creating secure conditions

15. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 15 2-2 Challenges facing Japans major nationwide Indicators Difficulty to select or set Indicators amid changing societal and ethical values among Japanese people Considerable gaps between what the indicators show and what people feel Long history of indicators for evaluation of peoples living standard, but short time for evaluating the effect of policy goal achievement Need to strengthen the recent effort to evaluate the policy goal achievement and its effects

16. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 16 3. Audit of National Performance Indicators in Japan 3-1 Present Status 3-1 Present Status No move to establish National Performance Indicators Japan Board of Audit has not audited Peoples Life Indicators and Life Reform Index (Reason) Audit has mainly focused on financial and accounting side of the Government activities Neither of indicators is established based on broad consensus among Japanese people, and the national indicators are still in development stage

17. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 17 3-2 Future Prospect SAIs are responsible for encouraging the Government to improve their activities, and eventually enhancing peoples living standard. And SAIs so far has contributed to that If National Performance Indicators are developed in Japan, the Board of Audit, Japan would take much interest in the processes of Japanese Governments setting the Indicators, and target values

18. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 18 3-3 Viewpoints of Auditing National Performance Indicators (1) Regarding selection of Indicators (1) Regarding selection of Indicators (a)Does the Government properly create and maintain consistency among indicator reflecting countrys present socio-economic conditions? (b)Do the indicators accurately measure national performance, and produce accurate statistical value? (c)Does the Government fairly weigh and balance each of the individual indicators in individual area?

19. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 19 3-3 Viewpoints of Auditing National Performance Indicators (2) Regarding targeted values (2) Regarding targeted values (a)Are targeted values sufficiently high and justifiable, and reflect actual policy goals to be achieved? (b)Does the Government fairly measure external socio-economic elements which influence indicator accomplishment?

20. OECD World Forum Statistics, Knowledge and Policy, Palermo, 10-13 November 2004 20 Conclusion SAI should shift priorities in viewpoints of audit, audited bodies, audit area, as the countrys socio- economic conditions changeSAI should shift priorities in viewpoints of audit, audited bodies, audit area, as the countrys socio- economic conditions change The SAI audit of National Performance Indicators will be sooner of later one of the top priority areasThe SAI audit of National Performance Indicators will be sooner of later one of the top priority areas Because both Governments who set the indicators and SAIs who check them share the common goal – to achieve higher living standardsBecause both Governments who set the indicators and SAIs who check them share the common goal – to achieve higher living standards