International Development Theory and Japan's ODA in the Post-Cold War Era

International Cooperation during Systemic Transformations

Abstract

The dichotomous approach to the political economy of development, which was especially prevalent in the context of the bipolar relations of the Cold War, no longer provides us with an adequate framework for finding solutions. Instead, a triangular or tripolar model may help overcome some of these difficulties.
It is argued that sustainable development needs to be conceptualized using a triangular schema, with liberal, social and environmental democracies at the poles. These three poles are associated with a three-level differentiation in terms of political spatiality, ranging from an inward-looking “closed nationalism” to “open nationalism” (internationalism) and “supranationalism” (globalism).
This schema will be used to examine Japan's ODA. In so doing, this article presents a descriptive overview of changes in the disaggregated dependent variable (volume and form, geographical distribution, sectoral allocation, and terms and conditions) of Japan's ODA.
The average ratio of bilateral ODA in total ODA volume dropped, when Japan increased its payments to the regional financial institutions. Since then the position has remained around 70 percent in the bilateral-multilateral dimension, but the relative predominance of yen loans in bilateral ODA was rapidly eroded by a constant increase in bilateral ODA grants. Thus, Japan's ODA activities moved from the less open nationalism to more open nationalism in the 1970s, although the shape of the triangle became more balanced when accompanied by a moving back to the strengthened bilateralism.
The changing inclination of the vector towards the pole of market-oriented economies differs across time and space. Loan-centrism remained relatively high in Asia. In the Middle East loans and grants were almost balanced in the early years, and loan-centrism quickly emerged and remained after the 1970s. By contrast, the share of grants for Africa gradually increased, although yen loans still shared almost half and again increased in the late 1980s. In this process, the shape of the triangle changed from that of an acute-angled one with a low grant element to resemble an isosceles triangle with relatively balanced grant and loan elements. The change in the direction of ecological sustainability has just begun and the majority of Japan's ODA program is still heavily targeted to capital-intensive projects.