U.S.– Japan Relations and Official Development Aid

Abstract

There is no question that Japan’s foreign policy has been greatly influenced by the United States. The Gaiatsu (U.S. pressure) has affected not only security policies but also economic policies, such as trade and exchange-rate adjustments. Japan has been defined as a “reactive state” because of this characteristic;that is, Japan has failed to take major autonomous foreign policy initiatives, in spite of the fact that it has the power and incentives to do so. Moreover, Japan has often inconsistently and incompletely responded to Gaiatsu for making changes. Whether Japan’s aid policy has been influenced by the U.S. is also a controversial issue. On the one hand, some scholars insist that Gaiatsu exists everywhere, even in the official development aid (ODA) policy in which the U.S. does not have a direct interest. In contrast, others argue that Japan has undertaken proactive foreign aid policies, and thus the U.S.’s pressure is marginal. Using panel data from 1966 to 2013, this paper statistically examines the influence of the U.S. on Japan’s foreign aid allocation, addressing two major issues. First, Japan’s aid allocation is indeed affected by the U.S.; therefore, it shows the same tendencies as the U.S.’s aid allocation. However, the second finding is that Japan’s response to the U.S.’s policy changes is not swift.