Japan's Aid Allocation Decisions

This book presents an empirical analysis on the underlying factors of Japanese aid allocation. It focuses on the evolution of Japanese foreign aid and its policies over time and the motivations that Japan has had in her development assistance. Empirical analysis is performed with a rich database, covering a total of 21 years (1981-2001) and 81 recipients. Because of the length of the data, it has become possible to compare aid allocation behavior in the 1980s and the 1990s and to test whether the end of the cold war affected the aid allocation behavior. Self-interest of donor, humanitarian concern, and the policy performance variables are introduced. The results suggest that Japan takes national-interest, recipient-country-need into consideration and pays attention to the democratic environment of the recipient countries. Japanese aid policies have evolved over time; however, not much changes are evident empirically while comparing the aid allocation behavior between 1980s and 1990s. Asian bias prevails in both of the decades. One important finding is that democratic environment of the developing countries is considered by Japan in her ODA allocation in the post-cold war period.