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Monday, Nov. 22, 2004

JAPANESE PERSPECTIVES

Firms think little of government statistics, questionnaire shows


Among government statistics detailing the condition of the Japanese economy, the Cabinet Office's quarterly estimates of gross domestic product, the Finance Ministry's report on corporate activity, and the "tankan" survey by the Bank of Japan are widely known. But there are many other economic statistics that are compiled by government ministries and agencies, and not all of them are useful.

Due to the sectoral division of the bureaucracy, a number of examples exist whereby very similar types of economic data are being compiled by different government bodies.

Many of these statistics concern corporate activities, and the companies that cooperate with the government surveys bear the heavy burden of responding to each inquiry from the bureaucracy. This has become an increasingly serious problem for companies that have streamlined operations in recent years, and the Keidanren is making efforts to minimize their burden.

At the same time, statistics compiled with cooperation from the corporate sector are public goods that should be used as widely as possible. However, a recent survey of member companies conducted by Keidanren shows that even major firms -- which are supposed to be sensitive to macroeconomic trends -- do not pay attention to many of the statistics.

In the questionnaire, Keidanren selected 72 government statistics that serve as short-term economic indicators and asked its members how much they use them in their operations and what they think of such data.

Each set of statistics was given a grade from 0 to 100, and any that were used by all the surveyed firms received a full 100 points. Those that were ignored by all of the firms got 0 points. As it turns out, many of the statistics received a score of between 15 and 35 points, while the average score was 38.8 points.

Many of the surveyed firms also expressed discontent with the statistics they use. Some companies complained that: a) they doubt whether the data compiled are precise enough; b) that the explanations by the bureaucracy on how to interpret the data are insufficient; and c) that the data should be released more quickly.

Many of the firms who said they do not use certain statistics said either that they were not interested in the government's data in those fields or that they did not even know such data were being compiled.

Statistics that draw no attention from relevant parties are of no use, and we must say they are being compiled merely for the satisfaction of the bureaucrats who make them. Also, lack of public knowledge about these statistics indicates that the officials who compile them are not making sufficient effort to publicize the data. I hope the government bureaucracy will take such opinions seriously.

What is important is to abolish economic statistics that are not needed, and to shift budget and personnel for researching data that are. Specifically, greater efforts are needed to improve government data on individuals and households, which are often criticized as less precise.

The Council on Economic and Fiscal Policy has set up an expert committee to scrap and build government statistics, and I hope the panel will provide good direction on the issue.

Yoshio Nakamura is a senior managing director of the Japan Business Federation (Nippon Keidanren).


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The Japan Times

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