Provisional Translation
Implementation Guidelines for ex-ante Evaluation of
Regulations
August 24, 2007
Approved at the Interministerial Liaison Meeting on Policy Evaluation
These Guidelines provide standard guidance for the contents, procedures and other
related matters of ex-ante evaluation of policies pertaining to the enactment, or
revision or abolition of regulations (hereinafter referred to as “Regulatory ex-ante
Evaluation”) based on the Basic Guidelines for Implementing Policy Evaluation
(hereinafter referred to as the “Basic Guidelines”) and the Policy Evaluation
Implementation Guidelines (hereinafter referred to as the “Policy Evaluation
Guidelines”) in order to contribute to the improvement of the quality of regulations and
the fulfillment of accountability to the public through smooth and effective Regulatory
ex-ante Evaluation under the framework of the Government Policy Evaluation Act
(Act No. 86 of 2001; hereinafter referred to as the “Evaluation Act”).
On the basis of the progress in efforts made by individual administrative organs and
the outcome of advance efforts made by foreign countries, these Guidelines shall be
reviewed as necessary in order to improve and enhance Regulatory ex-ante Evaluation.
I.
Before Evaluation
Regulations restrict the rights and freedom of the people or impose obligations on
the people for administrative objectives such as maintaining the social order, the
safety of life, environmental preservation and consumer protection. It is important
to improve the quality of regulations and to deepen the understanding of regulations
among not only interested parties but also the general public by releasing the results
of Regulatory ex-ante Evaluation. As shown above, the role of Regulatory ex-ante
Evaluation is considered significant.
Regulatory ex-ante Evaluation aims to predict and evaluate the effects and
burdens of regulations. In Regulatory ex-ante Evaluation, it is important to analyze
the effects and burdens of regulations so as to help study into the advisability of the
enactment, or revision or abolition of regulations and the details and degree of
regulations, and to collect useful data and information in the process of discussion
with the public and interested parties on the basis of such analysis results. Based on
these requirements, Regulatory ex-ante Evaluation shall be started as early as
possible in the process of policy conception to decision.
If the standard evaluation specified in these Guidelines is practically difficult due
to the nature of regulations, it is necessary to conduct evaluation to the extent
possible based on Clause A of “I 3. Basic Matters Related to Study and Acquire
information on the Effects of Policy” of the Basic Guidelines and “3. Evaluation
Techniques” of the Policy Evaluation Guidelines.
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II. Evaluation Methods
1. Evaluation Targets
(1) Policies that require mandatory ex-ante evaluation are such policies intended to
enact, or revise or abolish regulations as stipulated in item (vi) of Article 3 of the
Order for Enforcement of the Government Policy Evaluation Act (Cabinet Order
No. 323 of 2001).
Accordingly, Regulatory ex-ante Evaluation does not target provisions not
regulating the “people,” provisions not “restricting rights or imposing
obligations,” and provisions whose effects are not suitable in nature for
Regulatory ex-ante Evaluation. Examples of these provisions are shown below,
but other provisions shall be examined, according to the nature of their effects, for
whether they should be subject to Regulatory ex-ante Evaluation.
 Provisions regulating persons who have different relations with administrative
organs from those between the general public and administrative organs
• Provisions applicable to national administrative organs or local
governments based on their unique status
• Provisions applicable only to corporations who have special relations with
the State under laws and ordinances different from those between the
general public and the State, such as corporations established under special
laws and corporations designated by the State as to conduct administrative
affairs; for example, provisions applicable only to incorporated
administrative agencies, local incorporated administrative agencies,
national university corporations, inter-university research institute
corporations, public corporations, authorized corporations or designated
corporations (including corporations for which designation or any other
similar administrative act is not expected but for which their exclusive
public services are stipulated) and other similar corporations (for
designated corporations, limited to provisions for designation)
• Provisions applicable only to persons who are to be treated differently from
the general public under the Constitution or administrative laws (including
any interpretations thereof established in prevailing theories or judicial
precedents); for example, provisions applicable only to public officers or
ex-public officers, students of schools established by administrative organs
or national university corporations, persons confined or detained at
correctional or detention institutions, or persons on probation
• Provisions applicable only to foreigners or foreign corporations
 Provisions stipulating crimes and their penalties as a unit (excluding any parts
thereof that apparently have been planned and developed by an administrative
organ to achieve certain administrative objectives, such as parts where any act
falling under the actual elements of crimes is subject to recommendation or
disposition by an administrative organ)
* Only such part of penal provisions as stipulates penalties does not fall under
effects restricting the rights of the people or imposing obligations on the
people (the same applies to such part of provisions for administrative
disposition as stipulates the details of disposition).
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 Provisions stipulating equal rules among private citizens in a civil society
• Provisions of the Civil Code, the commercial transaction law, etc.
governing equal relationship among private citizens
* It is not equal if obligations are imposed on only either party of a contract or
transaction for the protection of consumers or investors.
 Provisions having no actual effects of restricting the rights of the people or
imposing obligations on the people
• Provisions of obligations to make efforts, not stipulating measures against
violation
 Provisions that, in light of normal social conventions, apparently have no
administrative objectives
• Provisions for the collection of fees or charges as compensation for
provision of administrative services
• Provisions for ensuring the proper performance of contracts where the
administrative organ is either party
(2) Based on the Basic Guidelines, efforts shall be made to conduct active and
voluntary Regulative ex-ante Evaluation on regulations that do not require
mandatory ex-ante evaluation.
2. Evaluation Unit
(1) Unit involving a superior law or ordinance and an inferior law or
ordinance (vertical unit)
For regulations consisting of provisions of a superior law or ordinance and
provisions of an inferior law or ordinance, ex-ante evaluation shall be conducted by
setting an appropriate evaluation unit. In evaluating a superior law or ordinance and
an inferior law or ordinance together at the same time, individual administrative
organs shall decide whether to prepare an evaluation report and its summary
(hereinafter referred to as “Evaluation Report, etc.”) for each level of law or
ordinance or for both levels together.
If an inferior law or ordinance needs to be evaluated for such reason as the actual
changes thereof after the collective evaluation of the superior law or ordinance and
the inferior law or ordinance, the inferior law or ordinance shall be re-evaluated at
the time of the revision thereof.
(2) Unit involving multiple clauses (horizontal unit)
If a regulation involves multiple clauses of a single law or ordinance or clauses of
multiple laws or ordinances, evaluation shall be conducted by evaluation units
suitable for analysis of the effect-burden relationship in individual cases.
(For reference)
Examples of evaluation units
 Evaluating related multiple clauses together
(Clauses stipulating the major part of regulations such as licenses and
permits and clauses stipulating cancellation, change, correction order and
compliance requirements of incidental licenses and permits)
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 Evaluating individual clauses
(Clauses ordering individual action or inaction (prohibition), clauses
independently stipulating the authority of an administrative organ to order)
3. Contents of Analysis and Evaluation
(1) Purpose, contents and necessity of regulations
A. Existing state and problems
The existing status and problems of regulations shall be explained
specifically and clearly, including the current system and policy structure
(clarifying related clauses and their contents), causes of the problems,
inconvenience caused by the maintenance of the existing status, and future
possibilities.
B. Purpose, contents and necessity of enactment, or revision or
abolition of regulations
The purpose, contents and necessity of enactment, or revision or abolition of
regulations shall be explained in light of the above A. Efforts shall be made to
clearly explain the necessity of administrative involvement, the necessity of
stronger or weaker administrative involvement, or the necessity of
discontinuing administrative involvement, and the process of benefit accruing.
In the case of deregulation, the necessity of regulations after such deregulation
shall also be explained.
(2) Analysis of costs and benefits
In the following explanation in these Guidelines, “costs” or “benefits” include
both elements converted into monetary value and elements not converted,
respectively. In other words, “costs” or “benefits” are not based on the assumption
that even elements inconvertible into monetary value have been converted into
monetary value.
The method of analysis of costs and benefits is shown below.
A. Common matters
(i) Period for analysis
The period for analysis needs to be set appropriately depending on
individual cases, in consideration of the fluctuations with age and the estimate
accuracy of costs and benefits.
For the total of costs and benefits converted into monetary value over more
than one year, it is appropriate to convert the monetary value to the current
value by discounting the future value by cut rate.
(ii) Base of comparison (baseline) for estimating costs and benefits
A “situation predicted to arise without enactment, or revision or abolition of
regulations” shall be set as the base of comparison (hereinafter referred to as
the “Baseline”). Costs and benefits shall be estimated by comparing the
Baseline with a “situation predicted to arise with enactment, or revision or
abolition of the regulations” (alternatives shall also be examined in the same
manner).
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(iii) Analysis of each element of costs and benefits
Specific cost and benefit elements expected to increase or decrease by
enactment, or revision or abolition of regulations shall be enumerated and
explained to the extent possible. For each element, parties bearing costs or
receiving benefits shall be indicated together with the process of generation of
such element.
For objective evaluation, it is desirable to quantify or express in monetary
value costs and benefits to the extent possible. If impossible, costs and benefits
shall be explained clearly in a qualitative way. However, it shall be kept in
mind that costs are easier than benefits to estimate through conversion into
monetary value.
If both quantification and conversion into monetary value are possible,
efforts shall be made to give explanation by both methods.
(iv) Secondary or indirect impacts
Cost and benefit elements shall include not only direct impacts but also
secondary or indirect impacts to be considered in policy making, with mention
of any expected external factors that may affect the achievement of targets. It is
necessary to try to quantify or convert into monetary value important secondary
or indirect impacts. For indirect impacts, however, attention shall be given not
to re-calculate, or doubly calculate, the same elements as direct impacts.
Indicating how costs and benefits will be distributed to different parties
through analysis of secondary or indirect impacts will contribute to more
appropriate policy-making based on fair distribution.
B. Classification of cost elements
Costs shall be analyzed by indicating payers for each element according to
the following classification.
(i) Costs are generally classified as follows according to the kind of payer.
Compliance costs, the costs of the highest interest to those who are
regulated, require sufficient examination. Administrative costs are important
information for evaluation because they help the decision of suitability of
administrative involvement and clarify costs continuously required. Other
social costs will also become important information if regulations are expected
to have significant impacts on those who are not directly regulated.
 Compliance costs
Compliance costs are borne by the public or business operators regulated
in order to comply with regulations, including costs for application to
administrative organs (such as preparation and submission of documents)
and internal costs borne by the public or business operators (such as
introduction and maintenance of equipment).
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 Administrative costs
Administrative costs are borne by regulating parties, including costs for
introduction of the regulation in question (such as research for
institutionalization and necessary facilities and equipment) and necessary
costs after the introduction of the regulation (such as inspection, monitoring
and increase of personnel). The kind of regulating parties (the State, a local
government or a related corporation) shall be specified.
 Other social costs
Other social costs are adverse impacts on the whole social economy and
environment. If it is apparent that the enactment, revision or abolition of
regulations has impacts on competition, such impacts shall be taken into
consideration.
(ii) If several different periods are contemplated for incurring costs such as costs
initially required, costs continuously required and costs required for a certain
time of the future, it is necessary to carry out a cost analysis with attention to
the lag in such periods (such as conversion to current value and year-by-year
flow comparison) for each classification as shown above, by indicating the
classification.
(3) Analysis of cost-benefit relationship
Regulatory ex-ante Evaluation is intended to indicate whether benefits to be
generated by regulations can justify costs arising from such regulations, with the
following three typical evaluation techniques. Among them, cost-benefit analysis,
converting benefits and costs into monetary value, is thought to be the major
technique of Regulatory ex-ante Evaluation. However, some benefit and cost
elements are (1) unpredictable in a quantitative way, or (2) predictable in a
quantitative way but difficult to convert into monetary value. Ordinary cost-benefit
analysis does not cover factors other than efficiency, such as fair distribution.
Accordingly, in using cost-benefit analysis, it is necessary to conduct
comprehensive evaluation considering policy objects other than efficiency, based on
benefit and cost elements not converted into monetary value that have been
analyzed by cost-effectiveness analysis, not only based on estimated benefits and
costs.
If quantitative prediction is difficult, qualitative analysis shall be conducted,
requiring clear explanation based on the importance of each element. If costs and
benefits are predictable quantitatively but difficult to convert into monetary value,
cost-effectiveness analysis may be conducted.
A. Cost-benefit analysis
Cost-benefit analysis analyzes cost-benefit relationship by estimating costs
and benefits converted into monetary value.
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B. Cost-effectiveness analysis
Cost-effectiveness analysis analyzes cost-effectiveness relationship by
estimating costs necessary for the achievement of certain quantified benefits
(effectiveness).
* If there is an alternative expressing effectiveness in a similar unit, such
alternative is comparable. Cost-effectiveness analysis may give a clear
image of effectiveness. In addition, cost-utility analysis, integrating several
effects into a single element for quantification, shall be used if necessary.
C. Cost analysis
Cost analysis analyzes costs mainly without detailed analysis of benefits if
benefits are predicted to be almost the same among several alternatives or if
benefits are apparently greater than costs.
(4) Comparison with alternatives
From the viewpoint of providing useful information for adoption of an
appropriate policy and fulfilling accountability to the public, assumable alternatives
shall be presented and compared with each other through the analysis stated in the
above (3).
If possible, non-regulatory means shall be presented as alternatives. In the case of
deregulation, if the regulation in question is possibly abolished, its abolition shall be
subject to comparison as an alternative in principle.
Alternatives include non-regulatory means, different authorities, different
administrative acts or compliance measures, different regulatory standards or
periods. However, it may be difficult to contemplate a valid alternative, depending
on the contents of regulations or the contents of delegation by a superior law or
ordinance to an inferior law or ordinance (these Guidelines are not intended to treat
the Baseline as an alternative).
The costs and benefits of alternatives shall be analyzed through comparison with
the Baseline, clearly indicating the results of comparison between the original
option in question and alternatives.
(5) View of experts and other related matters
Results of council’s examination or expert’s views on the analysis results of an
option of enactment, revision or abolition of regulations or Regulatory ex-ante
Evaluation shall be reported in an evaluation report. For data and documents used in
evaluation, information on the summary and location shall also be reported in the
evaluation report.
From the viewpoint of promoting collection of data and information and
enhancing compliance of regulated parties, it is desirable to disclose or collect
information on, and hear opinions on, analysis results by Regulatory ex-ante
Evaluation, as early as possible (with reference to consultation procedures of
foreign countries). The results of these efforts shall also be explained.
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(6) Time or conditions for review
An evaluation report shall contain the time and conditions for reviewing the
appropriateness of the regulation in question (enactment or revision) in light of the
social economic situation. It is important to monitor actual costs and benefits on a
regular basis as a part of the review. If monitoring is scheduled, efforts shall be
made to mention such monitoring.
4. Other Points to Consider
(1) Response to uncertainty, etc.
Regulatory ex-ante Evaluation, based on prediction of future events, involves
uncertainty. For this reason, it is necessary to explain the degree of uncertainty of
estimated values, for example, by using a range of numeric values (such as
maximum and minimum values). Even if part of data for analysis by quantification
or conversion into monetary value has not been obtained due to its unavailability, it
is necessary to explain the degree of uncertainty through efforts such as
quantification based on certain preconditions.
(2) Evaluation of regulations emergently enacted, or revised or abolished
In some accidental events or emergencies, it may be difficult to follow the
standard evaluation procedures in the process of developing or establishing a policy
pertaining to enactment, or revision or abolition of regulations. In such cases, based
on the concept of the Evaluation Act, Regulatory ex-ante Evaluation shall be
conducted as far as circumstances permit, and an Evaluation Report, etc. shall be
prepared and publicized to the necessary extent even if such Evaluation Report, etc.
becomes ex-post facto; however, the evaluating party in question needs to fulfill its
accountability to the public by explaining the reasons for not following the standard
evaluation procedures under these Guidelines.
On the other hand, regulations applicable only in emergencies shall be subject to
ex-ante evaluation like ordinary regulations unless there is any special reason as
mentioned above.
(3) Improvement of analysis
From the viewpoint of improving the quality of regulations, it is important for
individual administrative organs to diversify or otherwise improve analysis,
depending on the characteristics of regulations.
In some foreign countries, significant regulatory impacts on competition are
analyzed in the course of Regulatory ex-ante Evaluation. Based on this fact, a
liaison meeting among related administrative organs shall be set up to disseminate
and establish the method of monitoring and analyzing impacts on competition. The
liaison meeting shall make necessary efforts in cooperation with the Fair Trade
Commission.
(4) Coordination between evaluating functions and law planning
functions
Enactment, or revision or abolition of regulations requires effective coordination
between evaluating functions and law planning functions of each administrative
organ. For this reason, it is necessary for each administrative organ to improve the
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quality of regulations through coordination between the organizational unit in
charge of policy evaluation and departments in charge of individual policies or
departments in developing laws and ordinances.
5. Reporting Items of Evaluation Report, etc.
(1) Reporting items of Evaluation Report, etc.
The following items  through , important items in Regulatory ex-ante
Evaluation, shall be reported in an Evaluation Report, etc.
 Purpose, contents and necessity of regulations
 Costs of regulations
 Benefits of regulations
 Results of policy evaluation (such as analysis of cost-benefit
relationship)
 View of experts and other related matters
 Time or conditions for review
In publicizing alternatives, their costs and benefits and the results of comparison
with a regulatory option shall be reported to the necessary extent.
(2) Model form of the summary of an evaluation report
In preparing the summary of an evaluation report, the attached form shall be used
in principle, which may be changed if necessary.
6. Deadline for Publication of Evaluation Report, etc.
If a regulation is enacted, or revised or abolished by a law, an Evaluation Report,
etc. shall be publicized no later than the Cabinet’s approval of the draft law. If by a
law or ordinance equivalent or inferior to a cabinet order, an Evaluation Report, etc.
shall be publicized no later than the commencement of public comment procedures
under the Administrative Procedure Act (Act No. 88 of 1993) (for regulations to
which public comment procedures are not applicable, no later than the Cabinet’s
approval or establishment of such regulation). In such cases, the Evaluation Report,
etc. shall be publicized in principle as a “relevant material” to a draft of order, etc.
(regulation) subject to public comment procedures at the website of the Gateway of
Electronic Government (www.e-gov.go.jp). If the Evaluation Report, etc. are
changed based on opinions submitted in public comment procedures, they need to
be re-publicized.
However, if it is difficult to meet the above publication deadline for any special
reason such as confidentiality, an Evaluation Report, etc. shall be publicized as early
as possible by the publication of the regulation in question (such as its publication
in the official gazette); if the standard publication deadline under these Guidelines is
not used, the administrative organ, an evaluating party, has to fulfill its
accountability.
For regulations enacted, or revised or abolished based on an international
agreement such as a treaty, it is desirable to publicize an Evaluation Report, etc.,
including related domestic laws and ordinances, by the submission of such
international agreement to the Diet if such regulations require the Diet’s approval or
by the execution of such international agreement if such regulations do not require
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the Diet’s approval. In the case of enactment, or revision or abolition of domestic
laws and ordinances, an Evaluation Report, etc. shall be publicized no later than the
standard deadline.
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Report Form
Regulatory ex-ante Evaluation Report (Summary)
Name of policy
Department/bureau in charge
Date of evaluation
 Division,  Bureau,  Ministry
Tel: 03-****-****
e-mail: *****@*****.go.jp
 Division,  Bureau,  Ministry
Tel: 03-****-****
e-mail: *****@*****.go.jp
(Month) (Day), (Year)
Purpose, contents and necessity
of regulations
Name of laws and ordinances, and related clauses
Contemplated alternatives
Alternative 1:
Alternative :
* If there are more than one alternative, change this table as necessary.
Costs of regulations
(Compliance costs)
Cost elements
Alternative 1
Alternative 
Benefit elements
Alternative 1
Alternative 
(Administrative costs)
(Other social costs)
Benefits of regulations
Results of policy evaluation
(such as analysis of cost-benefit
relationship)
View of experts and other related
matters
Time or conditions for review
Remarks