ODA is classified into bilateral ODA and multilateral, and the former is decomposed into grant (financial and technical) and loan. Under the Japanese aid administration, each ODA component is implemented by a different ministry and/or agency. Aid agencies are under joint control of several ministries. Those ministries, in their capacities as supervisors are engaged in formulation of Japan's overall ODA policies. This dispersed responsibility and diversified implementation are characteristic of the Japanese aid system. Out of ministries responsible for ODA activities, the Foreign Ministry naturally has been quite eager to promote Japanese ODA as part of foreign policy pillars, and their position as ODA leading ministry is enhanced in the Administrative Reform in December, 1997. The relation between the government and an aid institution is comparable to that of principal and agent, where asymmetry of information is compensated by monitoring of aid agency's operations, but at the same time there takes place “reciprocal substitution”, where ministries concerned undertake part of responsibilities pertinent to an executing agency, and on the other hand, an agency acts as surrogate for the government on various occasions. This reciprocity of activities is effective in terms of sharing experiences and acknowledges. However, it tends to make blurred divide of responsibility between two parties, and to cause duplication and overlapping of activities. It has been observed that aid personnel in the government including aid organizations are short of continuously increasing workload. Japan as a dominant supplier of ODA for a decade has been expected to take the lead in addressing major developmental issues. The initiative role requires well-experienced and highly knowledgeable staffers. More delegation of operations to aid agencies and less intervention by the government would be conducive to more efficient reallocation of scarce aid personnel for effective aid policy formulation and execution, which is what the international community demands.
