助成Institute forInternational Policy Studies
・Tokyo・IIPS International Conference“Reidentifying Japan for the 21st Century”
Tokyo, October 27-28, 2004

“How Japan can provide international public goodsthrough its power”
By
Mr. David Roodman
Research Fellow
Center for Global Development and Foreign Policy
USHow Japan can provide international public goods through its power
Discussion Paper
David Roodman
Research Fellow
Center for Global Development
Washington, DCOctober 2004
Home to the world’s third largest economy, and a global leader in technology, Japan is one of themost powerful nations on earth. But power is not the same as greatness. Many religions teachthat the test of greatness for the powerful is how much they help those less well off. Nor isstrength the same as leadership. No one doubts, for example, that the United States is thestrongest nation on earth, militarily, economically, and perhaps culturally. But in my opinion it
has failed to exercise leadership in recent years, not just in Iraq, but on a host of international
issues such as global warming, where it has abandoned the Kyoto Protocol.
So the question for Japan at the beginning of the 21st century is the same as for my own country:
how can Japan turn its international power into international leadership and greatness?
I would suggest that one measure of Japan’s success in facing this challenge is the extent towhich its government’s policies facilitate sustainable development worldwide. The two words inthe phrase “sustainable development” can be thought of as different dimensions of our moral
obligations to others. “Development” captures the spatial dimension, reminding us that mostpeople on this planet do not enjoy the affluence, security, and freedom that we enjoy, and that wehave an obligation to change this. “Sustainable” captures the temporal dimension, reminding usof our obligation to future generations to assure that development is durable.
But Japan should seek global, sustainable development not just out of a sense of moral obligation.
It is also in the interests of Japan that the rest of the world be better off. Yes, the rise of China
has caused economic dislocation in Japan, and stirs memories of ancient military rivalries. But
the more economically integrated the two nations become, the greater stake they have in thecurrent global order, and the less likely their relationship is to breakdown into militaryconfrontation. Consider which country poses a greater threat to Japan’s security: poor North
Korea or rich South Korea?
How Japan will respond to the challenge of sustainable development is very much intertwinedwith a paradox in the Japanese national character. On the one hand, Japan is an inward-oriented,
homogenous, island nation that views the world with a subtle sense of superiority—or at leastjustifiable pride in all that it has achieved in the last 150 years by doing things its own way. Onthe other hand, Japan has a remarkable capacity to rapidly absorb ideas from he rest of the world,
and is quite sensitive to its international image—all of which hints at a certain sense of inferiority.
I have seen both sides of the Japanese character in my own work at the Center for GlobalDevelopment. CGD is an independent think tank in Washington, DC, that studies how rich1

countries can and do reduce poverty worldwide. We believe that helping developing countries isabout far more than foreign aid. It also involves trade, environmental issues, and more. Alongwith Foreign Policy magazine, we created the Commitment to Development Index to educate thepublic about these issues and spur reform. The CDI scores the “development friendliness” of 21
rich countries—Canada, the United States, Japan, Australia, New Zealand, and most of Western
Europe—in seven different policy areas—aid, trade, investment, migration, environment,security, and technology. Countries get a score in each area, usually between 0 and 10, and theoverall average is their final score. The 2004 edition is the second edition, and we are now
revising the CDI again in preparation for the third edition next April.
Japan does poorly on the CDI. This year it is in last place with a score of 3.2, fully half a point
the next-lowest country, Spain. The Netherlands and Denmark tie for first with a 6.7, and theUnited States is in a four-way tie for seventh place at 5.3. I can tell that some in the Japanese
government are very concerned about our results—hints of that sense of inferiority. In contrast, I
think that fewer people in the U.S. government care about the CDI. But as far as I know,Japanese analysts have mostly responded to the CDI by saying it must be wrong—there is thatsense of superiority.1
Commitment to Development Index 2004
Rank Country
Aid Trade Investment Migration Environment Security Technology Average
1 Denmark12.3 5.8
4.8
6.1
5.7
7.1
5.0
6.7
1 Netherlands
11.2 5.9
6.7
5.9
5.3
6.4
5.5
6.7
3 Sweden
12.4 5.8
3.8
5.1
5.8
4.5
5.7
6.1
4 Australia
2.9 4.4
6.5
8.8
3.3
9.0
6.4
5.9
4 U.K.
4.8 5.8
6.4
4.4
5.8
9.1
4.7
5.9
6 Canada
3.6 5.7
6.3
11.2
2.9
4.3
6.6
5.87 France
6.0 5.8
4.7
2.7
5.9
5.6
6.1
5.3
7 Germany
3.9 5.8
6.7
6.1
6.1
2.9
5.6
5.3
7 Norway
10.6 -2.7
5.3
4.9
4.0
9.3
5.5
5.3
7 United States
1.9 6.7
5.6
10.5
2.3
4.9
5.5
5.3
11 Finland
5.0 5.7
5.1
2.6
5.0
6.7
6.3
5.2
12 Austria
3.7 5.8
4.4
2.9
6.1
3.1
6.9
4.7
13 Belgium
6.0 5.8
4.3
2.6
5.9
4.0
3.4
4.6
14 Italy
2.8 5.9
5.3
3.6
5.5
3.6
4.7
4.5
14 Portugal
2.3 5.8
5.6
2.8
5.4
5.2
4.5
4.5
16 New Zealand
0.8 5.9
2.9
5.0
4.7
6.7
4.1
4.3
17 Greece
1.8 5.8
4.1
6.2
4.7
4.0
2.5
4.1
18 Ireland
3.0 5.8
2.7
5.8
2.8
5.5
2.0
3.9
18 Switzerland
5.8 0.3
4.7
3.6
7.9
0.7
4.5
3.9
20 Spain
2.0 5.8
4.5
2.3
5.5
2.0
4.0
3.7
21 Japan
2.4 3.4
4.6
1.9
4.5
0.4
5.4
3.2

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Hajime Furuta, “ODA report unfairly portrays Japan’s efforts,” Asahi Shumbun, September 8, 2003; YasuyukiSawada, Hirohisa Kohama, and Hisaki Kono, Commitment to Development Index (CDI): Critical Comments,Discussion Paper on Development Assistance No.1, Foundation for Advanced Studies on International Development(Tokyo: 2004).

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I am the first to say that there are many problems with the CDI. It is more valuable as acommunications device than a scientific measurement. Each component was designed by anAmerican expert, and was very much limited by what data are available and what weunderstand—or don’t understand—about how rich-country policies affect poorer countries.
Still, the broad pattern of results is meaningful. Once, my father visited a Toyota factory in Japan.
A manager there told him that finding a defect in a Toyota part was like finding a butterfly: itgave him insight into their production process and showed him how to make it better. Japanese
products are of such high quality because Japanese companies are extremely good atincorporating information about failures into in a cycle of continuous improvement. I think theJapanese government should do the same thing with the information we are presenting. The CDI
is a butterfly. Japanese officials and thinkers should criticize the CDI, yes, but they should also
try to learn from it, to help Japan improve itself.
Space and time permit me only a brief review of the CDI results. Complete data anddocumentation are available at www.cgdev.org. Here are the highlights:
Aid. All rich countries give development assistance to poorer countries. But the design ofdevelopment assistance programs means that some dollars or euros are more effective thanothers are. So the CDI aid component rewards countries not only for the quantity of theirdevelopment assistance, but also for the quality. It subtracts development assistance that comesright back to donors as debt payments. It penalizes donors for “tying” development assistance—
requiring that it be spent only on goods and services from the donor country-or funding manysmall projects that can overload the staff of poor-country governments. It rewards selectivity—
giving development assistance to countries that are particularly poor and particularly wellgoverned. The index also rewards tax incentives for charitable donations.
Japan scores low on the aid component of the CDI, with a 2.4. Only Greece, Portugal, Spain, andthe United States do worse. The main reason is that Japan gives only 0.2% of its GDP in aid, netof all debt service received from developing countries. That’s about 19 yen per day per person.
The CDI, unlike the standard “ODA” aid measure of the Paris-based Development AssistanceCommittee, nets out interest as well as principle payments received from developing countries.
And Japan collected $1.7 billion in interest from developing countries in 2002, far more than any
other government. Some have argued that subtracting out interest is not “logical,” but I disagree.
When a thousand yen leaves Ghana and goes to Japan, it has the same affect on development
whether it is an interest or a principle payment.
On measures of aid quality, Japan actually does well. It appears to tie very little of its aid, andalmost always disburses its aid in large amounts, which reduces project overload.
Trade. Trade has been a part of economic development for centuries. As the experience of Japanshows, it has the potential to be a significant force for reducing poverty by spurring economic
growth, creating jobs, reducing prices, and providing export markets. The highest trade barriers(tariffs and quotas) in most rich countries are on imports made predominantly in poor
countries—agricultural goods, textiles, footwear, and other light industry goods, the productionof which is the first step to job creation and economic growth.

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Japan scores very low on trade. Only Switzerland and Norway do worse. This is mainly because
Japan imposes high tariffs on agricultural goods, which shuts out produce from countries such as
India, Vietnam, and Thailand. According to the data we use, Japan’s average tariff on rice is409%—meaning it multiplies the cost of imports by a factor of 5. For wheat, the tariff is 250%,
for cattle and sheep 150%, and for dairy products nearly 300%.
Investment. Rich-country investment in poorer countries can transfer technologies, upgrade
management, and create jobs. For example, Singapore could not have raised its per capita
income from $2,200 in 1960 to $29,000 in 2000 without ample investment from Japan and othercountries. However, some investment dollars do more good than others. While a manufacturing
giant modernizes a light bulb factory in Hungary, the petrochemical industry has indirectlyfinanced exploitation in Nigeria. The CDI’s investment component is based on a checklist ofpolicies that support healthy investment in developing countries. Do rich-country governments
offer their companies insurance against “political risks,” including the possibility ofexpropriation by developing-country governments? In giving the insurance, do they screen forenvironmental and labor standards problems? Are they participating fully in internationalarrangements to reduce international bribery? Do they have rules to prevent profits earned
abroad being doubly taxed, in countries on both sides of the investment?
Japan scores about average on investment, with a 4.6. It could raise its score by no longer
providing political risk insurance in all industries; by cracking down on bribery by Japanesecountries doing business abroad; and ceasing to lobby against enforcement of labor andenvironmental standard in countries such as Bangladesh.
Migration. When workers move from poor countries to rich ones, they aid the development of
their home countries by sending home money. Also, migration can raise wages at home: theeasier it is for a Vietnamese laborer to work in Japan, the more Nike will have to pay her to sew
clothes in the company’s Vietnam factories. The CDI’s migration component is based almost
entirely on the net flow of legal immigrants from developing countries as a share of host-country
population. Weight is also given to the share of foreign students that are from developing
countries, and to aid for refugees and asylum seekers. A lack of data prevented an examination ofwhich countries discriminate in favor of skilled workers (often thought to cause brain drain indeveloping countries).
Japan’s migration score of 1.2 is very low—only Switzerland’s is lower. Japan scores low
mainly because there has been little increase in the number of migrants from developing
countries living in the country. In the years ahead, because of the aging population, pressure willprobably grow to allow more foreign workers in. There is one bright spot in Japan’s migration
profile. 95% of foreign students in Japan are from developing countries, the highest of any richcountry.

4Environment. A healthy environment is often dismissed as a luxury for the rich, distinct from andsecondary to economic development. Yet poor nations would struggle hardest with the effects ofclimate changes, such as drought, flooding, and the spread of infectious diseases. The index’senvironment component penalizes high per-capita emissions of greenhouse gases, consumptionof ozone-depleting substances, and subsidies for fishing (which spur overfishing in international
waters). It rewards high gasoline taxes, ratification of major environmental treaties, andcontributions to international funds that assist developing countries in complying with suchtreaties.
Here too, Japan’s record is mixed. Its greenhouse gas emissions are low per person—Japan’s
economy is quite energy efficient—but just as it protects its agriculture from foreign competition,it also heavily subsidizes its fishing industry, spending some $3 billion a year. This spurs overfishing in international waters, which causes fish stocks to collapse, and deprives fishers fromdeveloping countries of an opportunity to make a living.
Security. The index tallies the financial and personnel contributions that governments have madeto peacekeeping operations and forcible humanitarian interventions. Because the value of many
military interventions has been hotly debated, the index filters out operations lacking approval
from the U.N. Security Council, NATO, or some other international body. The index considers
ten years of history in assessing a country’s current willingness and ability to contribute.
The current design arguably reflects an American point of view, with its emphasis on militaryspending. Japan, with its strong constitutional and cultural commitment to peaceful conflict
resolution, comes out poorly by the measure. I think that this result should lead Japan to ponder
whether it ought to take a more active military role in the world, under UN auspices; and I know
there has been an active debate in Japan about this question. On the other hand, I also believe
CGD needs to continue improving this component to reflect a broader notion of security. Next
year we hope to include a measure of small arms production or exports.
Technology. Technology is an essential factor in development. Vaccines and antibiotics led tomajor gains in life expectancy in Latin America and East Asia in the 20th century, achieving infour decades improvements that took Europe almost 150 years. Cell phones have revolutionizedcommunications in poor countries such as Nigeria. The Internet also helps developing countries
access and disseminate information, form civil society movements, and do commerce with richworld economies. To capture government’s role in encouraging innovation, the technology
measure counts total government subsidies for research and development (R&D)—whetherdelivered through spending or tax breaks—as a share of GDP. It discounts military spending on
R&D by 50 percent because, while some military innovations have useful civilian spin-offs(including the internet), much military R&D does more to improve the destructive capacity ofrich countries than the productive capacity of poor ones. Unfortunately little data is available on
the amount of R&D funding in areas most relevant to the world’s poorest, such as malaria
vaccines and tropical agriculture.

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Japan scores above average on technology, with a 5.4, thanks to strong government spending on
R&D.
The average of Japan’s seven component scores, from aid to technology, is just 3.2. What pulls
the average down are low scores on aid, trade, migration, environment, and security. While one
can debate whether each of these scores is “right”—indeed, we encourage debate about
methodology—what cannot be disputed is the overall picture they paint. Compared to other richcountries, Japan has a strong inward orientation. Yet we live in a time when there is generalagreement that a growing interconnectedness among nations (“globalization”) can be good fordevelopment. Compared to other countries, Japan maintains high barriers to foreign products andforeign people. Japan also provides heavy protection to traditional industries such as fishing andfarming, which does substantial harm to fishers and farmers in developing countries. And Japan
rarely ventures abroad militarily, even when that military intervention would have international
backing.
There of course would be significant costs for some Japanese if the country were to open up
more, reduce protection to old industries, and become more engaged militarily. This should not
be minimized. But moving in this direction will be good for global development, and that will
ultimately be good for Japan. I submit that a fundamental choice that Japan faces in finding its
identity in the 21st century is in squarely facing the trade-offs between inward orientation andglobal leadership.

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