Bilateral and multilateral foreign aid: Japan's approach in comparative perspective

Abstract

We propose and apply a crude categorization of development aid forms ranging from those with a larger private to a larger public goods component. We reason that the degree of ‘privateness’ is greatest with the highest probability of direct financial compensation and the greatest control by the ‘national’ donor (be it private or public sector). This categorization is used to comparatively analyze foreign aid spending by Japan, the United States, and the entire Development Assistance Committee (DAC). With specific regard to Japan, we conclude that neither the most negative interpretations or the most positive claims seem fully warranted. Japan clearly is not empty‐headed about aid, purely selfish, or simply a follower of others. And the US record is not compatible with comprehensive claims for American leadership and special devotion to public goods provision in the world political‐economy through use of the foreign aid tool. Our findings also suggest, however, that Japanese movement toward a larger world role is of a somewhat different nature than has traditionally been seen in the American or DAC approach to aid. Emphasis on the loans components of official development assistance (ODA) and a somewhat higher tendency to funnel resources into aid categories exhibiting higher production of public goods outcomes demonstrate an apparently counter‐balanced, yet unique, pattern of aid‐giving behavior.

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