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Determinants of Japanese Aid Allocation: An Econometric Analysis

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    Abstract

    Economic self-interest and politico-strategic and humanitarian concerns motivate donor countries in their development assistance policies. A large amount of literature has pointed out that either economic self-interest or political self-interest played a pivotal role in the early phases of foreign aid programmes of many donors. Currently, almost all donors include humanitarian assistance in explaining their aid motives. We investigate how Japanese aid allocation policies have changed over the time and also identify empirically the major determinants of aid allocation. It is found from the empirical evidence that Japan takes national interest as well as recipient country needs into account in allocating their aid. The nature of Asian biasness in Japanese aid may continue given the high emphasis on national economic and security interests. Given the historical trend one can conclude that the same determinant factors may keep on playing vital roles in aid allocation decision-making at least for some years to come even though there has been an increased call for more assistance to poor regions.

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    File URL: http://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2004_03.pdf
    File Function: First version, 2004
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    Bibliographic Info

    Paper provided by Research Institute, International University of Japan in its series Working Papers with number EMS_2004_03.

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    Length: 19 pages
    Date of creation: Jun 2004
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    Handle: RePEc:iuj:wpaper:ems_2004_03

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    Keywords: Japanese ODA policy; determinants of Japanese aid allocation; cross-sectional analysis; donor interest; recipient need;

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