Why Japanese Aid is Ineffective in Reducing Poverty

Abstract

Japan is expected to become the largest donor of ODA (Official Development Assistance) in the world, due to the rapid increase of its ODA budget in recent years, high yen rate, and decrease in the ODa of the United States, erstwhile the biggest aid donor. The quality, however, of Japan's ODA has come under fire: the proportion of grants to loans is low; its beneficiaries are said to be Japanese corporations; and instead of helping the poor in the Third World, it has contributed to socio-cultural problems and environmental destruction. This paper discusses the allocation of ODA, Japan's policy on aid, the implementation of ODA, and recent trends.