Academic journal article Political Research Quarterly

Explaining Japanese Aid Policy in Latin America: A Test of Competing Theories

Academic journal article Political Research Quarterly

Explaining Japanese Aid Policy in Latin America: A Test of Competing Theories

Article excerpt

This article attempts to explain the variation in Japanese official development assistance in eighteen Latin American countries for the period 1979 to 1993. The findings suggest that recipient need and some Japanese economic interests have influenced disbursements in the region. The study does not provide support for theories that claim that U.S. strategic and economic interests are important determinants of Japanese ODA decisions.

Since 1980, Japan has emerged as a major aid donor. In an effort to exercise more global leadership while protecting its economic interests, the Japanese government greatly expanded foreign assistance during the 1980s and the 1990s. Between 1994 and 1997, average Japanese aid disbursements were greater than those of the United States and other OECD donors, while the number of countries receiving Japanese official development assistance (ODA) rose to over 140 (Rix 1996; Hook 1996b: Table 1; Development Assistance Committee, various years). Perhaps more important, Japan became the largest donor for an increasing number of recipient countries.

The role played by Japan as an aid donor in Latin America has become significant in recent years. Although Asia figures prominently in Japanese aid disbursements, Japanese ODA to Latin America has increased steadily. Indeed, after the U.S., Japan accounts for the second largest amount of net aid to the region, exceeding the amount given by other OECD donors.' Moreover, despite suffering a prolonged recession in the 1990s, Japan is expected to increase aid to Latin America in the future, although most ODA will be concentrated in certain countries (Japan International Cooperation Agency 1998).

The growth of Japanese ODA in Latin America has important implications for bilateral relations between the U.S. and Japan. Since the mid-1990s, the U.S. has sought to coordinate Japanese and U.S. aid programs in Latin America to help promote market-oriented reform, democratization, and poverty reduction (Watson 1996). While welcoming increased Japanese aid to Latin America, however, the U.S. government might oppose use of ODA that assists Japanese firms who compete with U.S. companies in certain product or service markets (Business International 1993). Japanese aid in Latin America raises the possibility of friction-as well as cooperation-between the U.S. and Japan. To this extent, Japanese aid programs in Latin America merit special attention.

Japanese foreign assistance is also significant for governments in the region. Serious development challenges remain in Latin America, but the end of the cold war has forced the U.S. to reassess its aid priorities in the region (Cingranelli and Gomez 1996: 209-10). At the same time, the supply of private capital to governments in Latin America has been unstable since the debt crisis of 1982. In this context, policymakers have looked to Japan, the U.S., and European donors as crucial sources of finance for a variety of development projects.

Although there are numerous studies of Japan's foreign aid program, the determinants of Japanese ODA in Latin America remain unclear. Recent scholarship has suffered from certain limitations. While different explanations of Japanese ODA have been proposed in the literature, most studies have not tested competing hypotheses about the determinants of Japanese aid in Latin America (e.g., Horisaka 1993; Anderson 1993; Cingranelli and Gomez 1996). In addition, analysts have neglected to use sophisticated statistical methods in their studies. Descriptive case studies provide useful information about the history of Japanese aid in the region, but fail to provide empirical evidence in support of an explanatory argument.

In this article, we develop a multivariate model to examine the determinants of Japanese ODA in eighteen countries: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Jamaica, Mexico, Paraguay, Peru, Uruguay, and Venezuela. …

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