Foreign Aid (ODA) as a Public Policy

Abstract

Focusing on Japanese foreign aid administration, or officially called Official Development Assistance (ODA), this article discusses two trends since the 1990s, specifically two kinds of changes, which seem to contradict each other. One trend is “participatory ODA,” in which the Japanese government, including the Ministry of Foreign Affairs (MOFA), eagerly asks Non-governmental Organizations (NGOs) to participate in aid activity. The other is the increasing attempts of MOFA to “steer” Japanese ODA so as to gather more information on the needs of potential recipients and organize coherent aid strategies. This article seeks to contribute to the understanding of these seemingly contradictory trends using the framework of governance, especially that of governance as networks.This article first reviews the existing literature on or potentially relevant for Japanese ODA, which reveals that the dominant perspective has rarely assumed an interdependent relationship between the public and private sectors. Next, this article examines why scholars have not focused on networks in the past, and concludes that one possible reason is the prior existence of unilateral relationships between the sectors whereby the private section did not have to cede its autonomy to the public one. It then looks at how the situation concerning ODA has changed since the mid-1980s, as evidenced by the Japanese government’s leadership in the field and its attempts to establish national aid strategies, as well as by the increasing participation by the private sector, especially by NGOs. After that, this article goes on to discuss how the public sector has become more systematic with respect to ODA, focusing on two important examples: the setting up of country and regional study groups and the establishment of a system of feedback among MOFA, the Japan International Cooperation Agency (JICA) and the Institute for International Cooperation (IFIC), an agency of JICA. Finally, by means of an empirical analysis, this article examines the effect of the institutional changes on the behavior of businesses with respect to ODA, and concludes that such changes have had a statistically significant effect on business, thereby supporting the use of “governance as networks” as a viable approach for studying Japanese ODA.