NIRA Policy Research 2005 Vol.18 No.6

Social Capital
the Basis of Governance - Restoring Connection Skills

[ Introduction | Contents ]

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Summary

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Feature Article

• The Economy and Social Capital
  Takashi Omori
  Vice President
  Economic and Social Research Institute, Cabinet Office

  The relation between social capital and the economy can be interpreted from three different aspects. Based on the first, social capital is regarded as a non-economic function. For example, we enjoy social intercourse and class reunions, and a neighborhood association can play an important role in the prevention of crimes. Second, social capital is considered a function that can be replaced by market and/or other systems when they are fully developed and mature. This is exemplified by defense, fire fighting and financial systems. Third, social capital is capable of complementing the functions of the market and other systems. This in turn will contribute to revitalizing economic activities. However, that the three aspects are linked closely to one another has made the issue increasingly complex. For example, if the second function declines, the other two functions may decline as well. Given the rise in income standards and the advancement of informatization, it has become increasingly difficult for the government and market to enhance the happiness of people. Therefore, there are growing expectations for the functions of social capital, particularly the first and third functions.

• Social Capital and NPO/Civil Activities
  Naoto Yamauchi
  Professor
  Osaka School of International Public Policy, Osaka University

  Social capital serves as an important concept when analyzing and evaluating Japan's communities. In fact we can calculate the same indexes that Robert Putnam used to analyze Great Britain for every Japanese prefecture. Assuming that these indexes were calculated, they vary inversely with respect to unemployment and crime rates. This implies that social capital can have beneficial effects on Japan's socio-economy. In addition, it is believed that synergistic correlations exist between social capital and civil activities. In fact, social capital will be enhanced if civil activities are invigorated and in turn, affluent social capital will encourage civil activities. Although it is important to adopt policies aimed at enhancing the formation of social capital, policy measures must be carefully selected given that social capital is directly related to human relations.

• The Restoration of Peace and Order, and Social Capital - The Theory of Safe and Secure City Development, and its Implementation
  Nobuo Komiya
  Associate Professor
  Faculty of Letters, Rissho University

  In order to restore peace and order, it is important to foster social capital among the citizens. Specifically, the sense of regionalism and the awareness of direct involvement in an area must be enhanced among citizens as proposed by the Broken Windows Theory. As an effective means of facilitation, a "security map" which indicates the places where crimes frequently occur is suggested. However, for those who cannot refrain from committing crimes even with less crime opportunities, delicate measures that emphasize social capital must be taken to support rehabilitation. In the case of the U.K., juvenile rehabilitation strategies are developed by communities, such as the juvenile crime team and Restorative Justice, and these in turn, are contributing to enhancing social capital. Social capital plays an important role in reducing crime opportunities and increasing opportunities for rehabilitation.

• Social Capital: Attempts Made Overseas
  Yuko Nishide
  Researcher, Center for Non-profit Research and Information
  Osaka School of International Public Policy

  This chapter outlines the attempts made overseas to enhance social capital, the concept drawing increasing attention due to its importance in the field of public policy research. This chapter focused on the nations of Canada and New Zealand, and international organizations that have made proactive efforts to enhance social capital. Analysis was developed from perspectives such as awareness of the issue, how social capital is measured and, related surveys and policies. Based on these analytical perspectives, the importance of the concept to regions and nations, and the necessity of measuring social capital were clarified. Given that the concept can be applied to a wide range of policies and proposals, the possibilities for adopting social capital in Japan's policies were suggested.

• Social Capital and Human Resource Management in Companies
  Yutaka Nakajima
  Director, Personnel Department
  Gap Japan

  In order to respond to the structural changes of the socio-economy in the post-1990s, the human resource and organizational policies adopted by companies are also changing. First, the modular method must be introduced and individual responsibilities must be clarified. These in turn, must be reflected in a performance-based human resources system. While this policy is said to be efficient in the changing corporate environment, it is also said to induce separation among individuals within an organization which in turn results in a decline of commitment. This chapter describes how the human resources system will be stabilized and organizational commitment enhanced by introducing the concept of social capital. Based on these and with reference to the results of demonstration surveys, this chapter clarifies how individuals and organizations will be integrated by social capital and efficient utilization of human resources will be enhanced.

NIRA Working Report

• The 60-year Old United Nations and Japan: Growing Expectations and Concerns towards Reform
  Akiko Fukushima
  Director and Senior Fellow
  The National Institute for Research Advancement

  This year, the United Nations will be celebrating its 60th anniversary. The international security environment is noticeably different compared to when the UN was established immediately after World War II. However, to date the UN's organization and system remain unchanged, without being reformed in response to the changing environment. The massacre in Africa's Rwanda, the Kosovo crisis in the former Yugoslavia and the war in Iraq have revealed the fatigue of the United Nations system. The UN Security Council, which plays the primary role in maintaining world peace and security, namely the most important objective of the organization, remains unchanged in terms of the council's permanent members. The five victorious nations emerging from World War II are still the permanent members. Since the 1990s, there has been a consensus on the necessity to reform the UN Security Council. However, an agreement is yet to be reached concerning the specifics of the reform. This year the UN will be celebrating its 60th anniversary and there is rising momentum for reforming the Security Council under the initiative of Secretary General Kofi Annan. Proposals designed to respond to "post-modern" global threats are presented in the Report of the Secretary-General's High-Level Panel on Threats, Challenges and Change, the Sachs report and the UN Secretary General Report. Will the UN literally be able to be reborn in the year it turns sixty? Or will the expectations of change be betrayed again?

Regional Report

• Research on Wide-Area Local Governments and the Revitalization of Communities
  Hiromichi Utsu
  Chief Researcher
  Kansai Institute for Social and Economic Research

  Tayuko Oizumi
  Senior Researcher
  Tohoku Regional Development Research Center

  Research activities were developed to clarify the optimal local government system necessary to establish a decentralized society and to examine the financial independence of wide-area local governments and basic municipalities. As a result, the difficulty for local governments to become financially independent (from the central government) even taking into account future reforms such as the reorganization of functions, transfer of financial resources and improvement in efficiency brought about by the benefits from integration and management efforts, has become clear. In order to remedy this situation and to establish vital local governments, it is crucial to improve the efficiency of public services based on a collaboration between public and private. Citizens must recognize more clearly that they are the major players in local gvoernment and become proactively involved in public services. Measures to facilitate this must be developed jointly by government and the citizenry with regard to the fact that regional communities are the key units.

Forum

Issues Related to Establishing a Slowly Developing but Vital Socio-economy--A Vision of Japan in the Twenty-first Century

An Interview with Professor Kazuo Yoshida, Chief of the Working Group on "Economic and Fiscal Prospects"

Kazuo Yoshida
Professor, Graduate School of Economics
Kyoto University

The special board of inquiry for examining Japan's vision for the 21st century established by the Council on Economic and Fiscal Policy presented the future prospects of Japan's socio-economy for the first quarter of the 21st century in May 2005 in a report entitled "Japan's 21st Century Vision." In this report, the discussions developed by the four working groups established under the special board in the areas of "economic and fiscal prospects," "competitiveness," "living and regional affairs" and "globalization" are presented focusing on the optimal direction of Japan's socio-economy in the 21st century.

We have interviewed Professor Kazuo Yoshida of Kyoto University who is chief of the working group in the area of "Economic and Fiscal Prospects" and inquired about the policies Japan should adopt to implement the 21st century vision, centering on such issues as the macro economy, public finance and social welfare.

(Interviewer: Misa Okabe, Researcher NIRA)

NIRA Policy Report

Comprehensive Strategies for Governance Reform - New Forms of Government, Civic Society, Market, East Asia, and Local Community(2)

I. Public Governance - New Form of the Government

Outline of policy recommendations
1. Establish a policy evaluation system the aim of which is to support government policy formation
In order to make more effective the policy evaluation presently conducted by the government, discover new policy issues and support policy formation, a policy evaluation model should be presented.

2. Establish a comprehensive administrative evaluation system for municipal governments
In order to make more effective the administrative evaluation developed by local governments, and to realize strategic management of the cities, a comprehensive administrative evaluation system should be established.

3. Strengthen the policy deliberation function of the assembly
he policy deliberation function of the Diet and local government assemblies should be strengthened by reviewing organizations and systems and enhancing citizen participation.

II. Social Governance - New Form of Civic Society

Outline of policy recommendations
1. Establish a basic framework for social governance
Measures must be taken to implement the environment necessary for civil society organizations to develop activities focusing on facilitating sound activities of the community-based government organizations that are in danger of declining.

2. Shift towards an administrative system centering on basic local government bodies
It is necessary to fundamentally review the systematic frameworks that can hinder the development of social governance developed by basic local government bodies at the actual loci of government. Specifically, review the "disadvantaged areas protection law" system, shift towards a bottom-up national land development plan, establish self-government legislative power that enables city governments' bylaws to supersede state laws and establish the authority of local governments to plan whereby the land utilization plan established by the basic local government bodies will be reflected in the national development plan.

3. Reorganize wide-area local government bodies
Based on the complementarity principle, the function and role of the wide-area local government bodies, the intermediate body between central government and basic local government bodies, should be defined. Japan must be divided into new wide-area districts that consider lifestyle, economic and cultural spheres, given that the present prefectural divisions have remained unchanged since the Meiji Restoration.

4. Revitalize the regions and cities with emphasis on creating culture
Under the progressing decentralization, the possibilities for creating new cities and reviving the regions should be examined from the perspectives of the strategic promotion of cultural policies and effective utilization of inter-city collaboration in order to establish cities appropriate to the age of intellectual economic activities.

III. Market Governance - New Form of Market

Outline of policy recommendations
1. Enact a Japanese Financial Services and Markets Act
With reference to the financial regulations adopted in other nations (esp. the United Kingdom), a grand design for a comprehensive and cross-sectoral Japanese financial services and markets act, as well as a schedule for its implementation should be established.

2. Propose effective alternative dispute resolution (ADR) systems
An effective and useful consumer protection system capable of promptly responding to various changes in the financial market should be established. By examining the ADR systems adopted in the financial market, guidelines for establishing a financial ADR system appropriate to the twenty-first century should be proposed.

3. Propose cross-sectoral public services legislation
By analyzing the relations between anti-monopoly laws and business laws and considering the correlations between the two, it is necessary to restructure current business laws, which are industry- and business-specific, to a cross-sectoral and comprehensive market system.

4. Strengthen corporate governance through the market
Given the increasing amount of funds raised in the market, it has become essential for the corporations raising the funds to enhance their governance. Emphasizing local government bodies and medical institutions, a course of reform is presented. In addition, problems are identified concerning the governance of public pension reserves that exemplifies the governance of the entities using the funds.

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