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Governance and Effectiveness of Japanese Aid: Towards Optimality

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Author Info
Haider A. Khan (GSIS, University of Denver)

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Abstract

In this paper I have tried to pursue two related objectives. First, I have tried to gauge the impact of Japanese aid on South and Southeast Asia. My second objective in this paper is to offer an approach to relate governance and aid-effectveness that could be applied to the aid and macroeconomic time-series data from the region. Using a bounded rationality format presented in a model that allows to progress towards optimality over time invites thinking along the lines of inductive learning to improve both governance and aid-effectiveness. Although Japan comes out ahead of many western donors, particularly, large ones such as the US and UK, there is still much room for improving aid-effectiveness. Both model-based and qualitative interview-based investigations in this paper point to donor and recipient policies that can be geared towards improving democratic governance, openness and grassroots empowerment in order to promote further aid-effectiveness.

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Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-331.

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Length: 25 pages
Date of creation: Mar 2005
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Handle: RePEc:tky:fseres:2005cf331

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  1. Anne Booth, 1988. "Survey of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor and Francis Journals, vol. 24(1), pages 3-35, April. [Downloadable!] (restricted)
  2. Mosley, Paul & Hudson, John & Horrell, Sara, 1987. "Aid, the Public Sector and the Market in Less Developed Countries," Economic Journal, Royal Economic Society, vol. 97(387), pages 616-41, September. [Downloadable!] (restricted)
  3. Pack, Howard & Pack, Janet Rothenberg, 1990. "Is Foreign Aid Fungible? The Case of Indonesia," Economic Journal, Royal Economic Society, vol. 100(399), pages 188-94, March. [Downloadable!] (restricted)
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  5. Maizels, Alfred & Nissanke, Machiko K., 1984. "Motivations for aid to developing countries," World Development, Elsevier, vol. 12(9), pages 879-900, September. [Downloadable!] (restricted)
  6. Pack, Howard & Pack, Janet Rothenberg, 1993. "Foreign Aid and the Question of Fungibility," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 258-65, May. [Downloadable!] (restricted)
  7. Sengupta, J K, 1970. "Optimal Stabilization Policy with a Quadratic Criterion Function," Review of Economic Studies, Blackwell Publishing, vol. 37(1), pages 127-45, January. [Downloadable!] (restricted)
  8. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Aggregating governance indicators," Policy Research Working Paper Series 2195, The World Bank. [Downloadable!]
  9. Burnside, Craig & Dollar, David, 2004. "Aid, policies, and growth : revisiting the evidence," Policy Research Working Paper Series 3251, The World Bank. [Downloadable!]
  10. Heller, Peter S, 1975. "A Model of Public Fiscal Behavior in Developing Countries: Aid, Investment, and Taxation," American Economic Review, American Economic Association, vol. 65(3), pages 429-45, June. [Downloadable!] (restricted)
  11. Khan, Haider Ali & Hoshino, Eiichi, 1992. "Impact of foreign aid on the fiscal behavior of LDC governments," World Development, Elsevier, vol. 20(10), pages 1481-1488, October. [Downloadable!] (restricted)
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