Dual determinants: Aid disbursement and volume, with special reference to Japan

Abstract

While variables for recipient countries are taken into considerations when aid is disbursed, how the amount of aid volume is shaped before it is disbursed is determined by factors within donors. In this regard, this study examines dual determinants of the Japanese aid. It is dual in the sense that determinants for both aid disbursement and aid volume are examined – the former based on recipient-side variables and the latter, on donor-side ones. In the first part where determinants for aid disbursement are considered, with an emphasis on the 1960s and the 1970s, this study finds that Japan's aid disbursement pattern in the earlier period is different from that in the rest. War reparations and lacking clear aid objectives in those period may explain this discrepancy. The second part of the study examines what determines aid volume before it is disbursed. Using several donor-based variables, we find an inverted-U shape between Japanese income level and the amount of its aid volume with a threshold at around $28,000. This finding is compared with other donors. © 2017 College of Management, National Cheng Kung University