The Disbursement Pattern of Japanese Foreign Aid: A Reappraisal

Article excerpt

Three perspectives on the determinants of Japan's official development assistance (ODA) program are often represented as distinct, valid explanations of the aid program. Yet few studies have attempted to simultaneously test the hypotheses generated from all three perspectives in a global study of Japanese aid flows. This study seeks to improve the understanding of the Japanese ODA program by addressing some of the gaps in the existing literature. Providing a comprehensive analysis, the article investigates the effects of different political and economic variables on Japanese aid disbursement in eighty-six countries in Africa, Asia, Latin America, and the Middle East from 1979 to 2002. The findings of the study make several contributions to the literature. First, the results provide strong support for the claim that humanitarian concerns, as measured by poverty and human fights conditions in recipient countries, are important determinants of aid allocation. Second, although much of the previous literature has hypothesized that Japan's aid program seeks to promote Japan's economic interests, little empirical support for this view is found in the present study. Likewise, the disbursement pattern of ODA was associated with only a limited number of US security interests; US economic interests are shown to have no effect on ODA.

KEYWORDS: international relations, foreign aid, official development assistance (ODA), gaiatsu, US-Japan relations, humanitarianism, human fights, neorealism, determinants

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For several decades, Japan's foreign policy has been focused on the domain of international economic relations. Following the end of World War II, Japan forfeited the fight to offensive military capabilities and came to rely on the United States for promotion of its security interests. (1) Subsequently, after the emergence of Japan as a great economic power during the Cold War, pressure from the United States led Japan to use its economic resources to support international public goods. To this end, Japan has participated actively in the international community, and Japanese contributions to the International Monetary Fund (IMF), the World Bank, and most regional development banks are now second only to those of the United States. Japanese financial contributions to the United Nations are, on average, about 90 percent of US contributions and more than the combined contributions of Russia, China, the UK, and France--four permanent Security Council members.

Beyond its efforts to maintain international public goods through multilateral aid donations, Japan has also developed a particularly significant bilateral program of official development assistance (ODA). Indeed, bilateral ODA has been one of Japan's primary foreign policy tools since its rapid economic redevelopment in the early 1950s. For over two decades, Japan has been the second largest donor, after the United States, in absolute ODA disbursements. At present, the Japanese aid program covers over 120 recipient developing and transitional countries in every region of the world (Development Assistance Committee, OECD 2005). Despite a prolonged recession that has strained the fiscal capacity of the state, Japan still accounts for approximately 13 percent of total bilateral ODA disbursements among Organization for Economic Cooperation and Development (OECD) donors, up from about 8 percent in 1980. (2)

Although the scope and impact of the Japanese aid program frequently attracts scholarly attention, there is little theoretical consensus regarding the motivations of its aid policy. One hypothesis frequently advanced in the literature is that due to the outcome of World War II and fragmentation in Japan's foreign policymaking process, its ODA program is responsive to gaiatsu, or foreign pressure, from the United States (see Calder 1988; Anderson 1993; Katada 1997; Miyashita 1999, 2003). (3) According to this view, US strategic interests are important determinants of Japanese ODA. …