DETERMINANTS OF JAPAN’S ODA
ALLOCATIONTEMPORAL TREND IN EFFECT OF RECIPIENTS NEEDS AND
DONORS INTERESTS

Yuka Suzuki
51-148063

GraSPP Economic Policy

CONTENTS
1.

2.
3.
4.
5.
6.

Background
About Japanese ODA
Literatures
Research Questions
ModelsResults (LGA / LTC)
1.
2.
3.
4.
5.

7.
8.

Standard Model
Model with WGIModel without Governance Index
Model without Area Dummy
Model without Governance Index, Area Dummy

Conclusion
References

BACKGROUND Hearing about an activity in Cameroon (Recipient) What would be the ideal aid?
 Looking at ODA from diplomatic perspective (Donor)
 How responsible is ODA for “national interest”?
 2014 – 60 year anniversary of Japan’s ODAABOUT JAPAN’S ODA
 1954: First year – Colombo Plan
 1957: Technical cooperation started
 1958: Loans started
 1969: Grant aid started
 1992: ODA Charter created 2003: ODA Charter revised
 2014: ODA Charter revised, changed name toDevelopment Cooperation Charter

LITERATURE – 1 INDEPENDENT VARIABLES
RECIPIENTS’ NEEDS / DONOR’S INTERESTS RN: GDP per capita, saving rates, growth rates,inflation rates, foreign debts, average lifeexpectancy, infant mortality, trade balance, Human
Development Index (HDI), status of goodgovernance DI: net export, exports, imports, trade amount, FDI,former colony, UN friendship, religion, and area
dummy such as East Asian dummy
 Population
 GDP per capita
 Trade (Exports)
 East Asia Dummy

positive
negative
positive
positive / not significant

LITERATURE – 2 DEPENDENT VARIABLES
3 TYPES OF JAPANESE ODA
Grant Aid
 Formerly done by MOFA  affected by diplomatic policy ?
 Shift: Asia to Africa

Technical Cooperation
 Decided on-site by consulting Ratio to Asia is stable  stable trend ?

Loans Recipients must pay back  middle income countries 80% : East / South Asia

RESEARCH QUESTIONS
1.

2.

Which matters more, Recipients Needs (RN) or Donor’s
Interests (DI) in determining ODA amount?
Has the tendency changed through decades?

MODEL

Aid Amount = + 1*RN + 2*DI
AA: Grant Aid or Technical Cooperation
RN: GDP per capita, Governance
DI: NEX, Duration, EA Dummy
Other: Decades Dummy (70s, 80s, 90s, 00s)

RESULTS 1-1
LGA STANDARD MODELLGA = 2.600 -.642*LGDP + .007*FHI + .121*LNEX + .070*DURGA(0.00)(0.00)(0.80)(0.00)(0.00)+ .306*Dea - 1.052*D70 -.076*D80 + .310*D90 -.209*D00(0.35)(0.00)(0.71)(0.04)(0.04)(p-value)

Variable

LGDP

FHI

LNEX

DURGA

EA

70s

-0.3153596

0.0820689

0.2640698

0.2070554

1.8518749

80s-0.9324760-0.0317251

0.1458969

0.1931814

0.6256713

90s-0.5828206-0.0396237

0.1651971

0.0914053

0.2204066

00s-0.56835070.0306253

0.1093608

0.0575091-0.2920947

10s-0.9013073

0.1326179

0.0494986

0.0509765

0.0321949

RESULTS 1-2
LTC STANDARD MODEL

Variable

LGDP

FHI

LNEX

DURTC

EA

70s

-0.0868281-0.1152554

0.2112757

0.1759999

2.3976537

80s-0.0530305-0.1494192

0.2298245

0.1372607

2.2299787

90s-0.0031974-0.2387077

0.1768041

0.0750825

2.016365700s-0.2732198-0.1031536

0.0013370

0.0453589

1.3457417

10s-0.6762228

0.0601963-0.0937670

0.0427200

0.1689507

RESULTS 2-1
LGA MODEL WITH WGI

Variable

LGDP

WGI

LNEX

DURGA

EA

90s

-0.7581962

0.1393182

0.0885862

0.0813711

0.6725866

00s-0.6396963

3.1764173

0.1437021

0.0683832

0.5041165

10s-0.9869360-0.3020297

0.0787784

0.0610157

0.9801444

RESULTS 2-2
LTC MODEL WITH WGI

Variable

LGDP

WGI

LNEX

DURTC

EA

90s

-0.2663248

1.4142493

0.2382193

0.0506762

1.961889200s-0.5361026

0.9316722

0.0916127

0.0347082

1.2403052

10s-0.9598859

0.2982663-0.0113426

0.0308275

0.2213082

RESULTS 3-1
LGA MODEL WITHOUT GOVERNANCE INDEX

Variable

LGDP

LNEX

DURGA

EA

70s

-0.3145223

0.2640269

0.2081073

1.835196980s-0.9289926

0.1568407

0.1962760

0.6697592

90s-0.5753982

0.1678159

0.0898900

0.181112500s-0.5647626

0.1130221

0.0566427-0.3279302

10s-0.8949403

0.0466640

0.0490650-0.0151661

RESULTS 3-2
LTC MODEL WITHOUT GOVERNANCE INDEX

Variable

LGDP

LNEX

DURTC

EA

70s

-0.0202770

0.2089912

0.1819900

2.2154457

80s

0.0025292

0.2226161

0.1398535

2.1312367

90s

0.0327116

0.1682090

0.0735583

1.880411700s-0.2475473-0.0065499

0.0438503

1.1918627

10s-0.6504754-0.1034912

0.0411986-0.0090833

RESULTS 4-1
LGA MODEL WITHOUT EA DUMMY

Variable

LGDP

FHI

LNEX

DURGA

70s

-0.3064727

0.0821717

0.2706219

0.2084550

80s-0.9234823-0.0306052

0.1516120

0.1937260

90s-0.5800742-0.0382882

0.1692109

0.091743000s-0.5702587

0.0320279

0.1119987

0.0577860

10s-0.9002735

0.1338739

0.0524509

0.0513116

RESULTS 4-2
LTC MODEL WITHOUT EA DUMMY

Variable

LGDP

FHI

LNEX

DURTC

70s

-0.0850118-0.1138204

0.2207999

0.1765310

80s-0.0512352-0.1464531

0.2393368

0.1380380

90s-0.0012980-0.2353136

0.1855005

0.0759732

00s-0.2744576-0.0990597

0.0083120

0.0460277

10s-0.6752987

0.0634514-0.0862463

0.0437269

RESULTS 5-1
LGA MODEL W/O GOVERNANCE INDEX, EA DUMMY

Variable

LGDP

LNEX

DURGA

70s

-0.3068929

0.2702467

0.2095273

80s-0.9220271

0.1618304

0.1967838

90s-0.5734360

0.1716525

0.090222900s-0.5671283

0.1192865

0.0569148

10s-0.8943935

0.0495715

0.0493917

RESULTS 5-2
LGA MODEL W/O GOVERNANCE INDEX, EA DUMMY

Variable

LGDP

LNEX

DTC

70s

-0.0215523

0.2174068

0.1824845

80s

0.0012130

0.2308557

0.1406375

90s

0.0327778

0.1763465

0.074525500s-0.2506181-0.0000498

0.0446670

10s-0.6513416-0.0963566

0.0423207

CONCLUSION
 DI diminishes

LNEX (Economic): sometimes with sign change Duration (Political): clear trend
 EA dummy (Security): sometimes not significant
 RN matters more…?

Does not show much trend
 Maybe “relatively” more effect Keep focusing on RN!

REFERENCES


Alesina, Alberto, and David Dollar. "Who gives foreign aid to whom and why?."Journal of economic growth 5.1 (2000): 33-63.

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

Maizels, Alfred, and Machiko K. Nissanke. "Motivations for aid to developing countries." World Development 12.9 (1984): 879-900.

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Policy, United Nations Development Programme, 1999.

Salois, Matthew J. "Regional changes in the distribution of foreign aid: An entropy approach." Physica A: Statistical Mechanics and its Applications392.13(2013): 2893-2902.



Shishido, Shuntaro, and Naonobu Minato. "A comparative study of official development assistance by major industrial countries: an econometric analysis." TheDeveloping Economies 32.1 (1994): 3-12.

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丸岡泰. "日本の ODA における負担分担政策 1987 年-1997 年: 冷戦構造崩壊に伴う変化の分析." 国際学論集 44 (1999): 1-23.

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デ(2008).

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Freedom House organisation, Freedom house index from https://freedomhouse.org/report-types/freedom-world#.VXZFQNLtmko



Ministry of Foreign Affairs of Japan, Priority Policy for Development Cooperation FY2015 from http://www.mofa.go.jp/files/000071276.pdf

Ministry of Foreign Affairs of Japan, Priority Policy for Development Cooperation FY2014 from

http://www.mofa.go.jp/mofaj/gaiko/oda/seisaku/pdfs/26_jyuten.pdf

Ministry of Foreign Affairs of Japan , Japan’s ODA Data by Country from http://www3.mofa.go.jp/mofaj/gaiko/oda/shiryo/jisseki/kuni/index.php

Ministry of Foreign Affairs of Japan , Overview of Japan’s ODA White Paper 2013 from http://www.mofa.go.jp/files/000031647.pdf

UN Comtrade. Retrieved from http://comtrade.un.org/data/World Bank, World Development Indicators from http://data.worldbank.org/indicator/NY.GDP.PCAP.CDWorld Bank, World Governance Indicator from http://info.worldbank.org/governance/wgi/index.aspx#home

THANK YOU!