Review: Struggling for Effectiveness

Since the early 1990s, Japan has played an increasingly important and influential role in Africa. A primary mechanism that has furthered its influence has been through its foreign aid policies. Japan’s primacy, however, has been challenged by changing global conditions related to aid to Africa, including the consolidation of the poverty reduction agenda and China’s growing presence in Africa. This book analyzes contemporary political and economic relations in foreign aid policy between Japan and Africa. Primary questions focus on Japan’s influence in the African continent, reasons for spending its limited resources to further African development, and the way Japan’s foreign aid is invested in Africa. The context of examining Japan’s foreign aid policies highlights the fluctuation between its commitments in contributing to international development and its more narrow-minded pursuit of its national interests. The contributors examine Japan’s foreign aid policy within the theme of a globalized economy in which Japan and Africa are inextricably connected. Japan and many African countries have come to realize that both sides can obtain benefits through closely coordinated aid policies. Moreover, Japan sees itself to represent a distinct voice in the international donor community while Africa needs foreign aid from all sources.

This article reviews Keith Spicer’s 1966 book on Canada’s foreign aid program, A Samaritan State? External Aid in Canada’s Foreign Policy. Spicer’s essentially realist perspective on the reasons why Canada did and should provide development assistance is not only inconsistent with more recent views that justify aid at least in part on humanitarian grounds; it is also difficult to support even from the evidence he presents. The article concludes by comparing Spicer’s views with recent developments in Canadian foreign aid policy, suggesting that Spicer might well approve of the self-interested nature of current policy—but that he would be unlikely to embrace the narrow, short-term perspectives that underpin it, which could hurt Canada’s standing internationally.

This article presents a comprehensive discourse analysis of the Marshall Plan’s administration, shedding light on a facet of history that has often been overlooked in favor of discussions on aid effectiveness and outcomes. Central to our inquiry is the hypothesis that the institutionalization of U.S. foreign aid, initiated with the Marshall Plan, played a critical role in its success and laid the foundation for future aid initiatives. By focusing on the administrative strategies and decision-making processes, the study offers novel insights into how these elements contributed to the Plan’s effectiveness and the overall evolution of U.S. foreign aid policy. The analysis draws on a variety of primary sources, including historical documents, speeches, and policy papers, to provide a detailed picture of the Plan’s implementation. In doing so, we unveil the complex dynamics and challenges of post-war recovery efforts and the strategic decisions that shaped them. The findings reveal the intricacies of the Marshall Plan’s administration and provide valuable lessons for contemporary policy discourse, particularly in the context of Ukraine’s ongoing recovery and its significance to Kyiv’s international partners. This study contributes to the existing body of literature by offering a nuanced understanding of the Marshall Plan’s legacy and its enduring impact on international development and foreign aid. It serves as a vital resource for policymakers, scholars, and practitioners engaged in shaping effective and sustainable foreign aid programs in the modern era. This study also examines the evolution of U.S. foreign aid from the mid-19th century technical missions to the modern era, highlighting key changes in aid administration and objectives. By tracing this evolution, it contextualizes the Marshall Plan within the broader narrative of U.S. international development policy. The role of the Truman administration in shaping the plan and its broader foreign policy implications, including containment of communism and promotion of democracy, are critically analyzed. This article thus fills a gap in the literature by offering a comprehensive view of the Marshall Plan’s administration and its lasting influence on U.S. foreign aid policy.

Taiwan's foreign aid policy is largely a response to its China-imposed international isolation. Taiwan provides aid without stringent accountability conditions to countries in Africa, the Americas, and the South Pacific in order to maintain official diplomatic relations in the face of Chinese opposition. Often at odds with this is Taiwan's interest in seeking western support through being seen as a responsible aid donor. Domestic political constraints on Taiwan's aid budget accentuate the tension between these two interests. Taiwan's aid program can be seen as the product of these three competing and enduring pressures – maintaining the count of official diplomatic relationships, improving its international reputation, and containing aid spending.Taiwan President Ma Ying-jeou's tacit ‘diplomatic truce’ with China – part of a wider warming of intergovernmental relations across the Taiwan Strait – has reduced significantly the squeeze between these three pressures on Taiwan's foreign aid policy. It has allowed the Ma administration to improve Taiwan's reputation, while maintaining or even reducing its aid expenditure, and still retain the same number of official diplomatic relationships. Nevertheless, the Ma administration has not wanted to alienate recipient governments while the prospects for the diplomatic truce with China remain uncertain. There remains considerable continuity with past practices, and the government's handling of aid as a foreign policy tool is still largely opaque and unaccountable.

Chapter 1: 
\nThis chapter studies the effects of bilateral foreign aid on conflict escalation and deescalation. We make three major contributions. First, we combine data on civil wars with data on low level conflicts in a new ordinal measure capturing the two-sided and multifaceted nature of conflict. Second, we develop a novel empirical framework. We propose a dynamic ordered probit estimator that allows for unobserved heterogeneity and corrects for endogeneity. Third, we identify the causal effect of foreign aid on conflict by predicting bilateral aid flows based on electoral outcomes of donor countries that are exogenous to recipients. We establish that the effect of foreign aid on the various transition probabilities is heterogeneous and can be substantial. Receiving bilateral aid raises the chances of escalating from small conflict to armed conflict, but we find little evidence that aid ignites conflict in truly peaceful countries.
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\nChapter 2:
\nWe use an excludable instrument to test the effect of bilateral foreign aid on economic growth in a sample of 96 recipient countries over the 1974-2009 period. We interact donor government fractionalization with a recipient country's probability of receiving aid. The results show that fractionalization increases donors' aid budgets, representing the over-time variation of our instrument, while the probability of receiving aid introduces variation across recipient countries. Controlling for country- and period-specific effects that capture the levels of the interacted variables, the interaction provides a powerful and excludable instrument. Making use of the instrument, our results show no significant effect of aid on growth in the overall sample. We also investigate the effect of aid on consumption, savings, and investments, and split the sample according to the quality of economic policy, democracy, and the Cold War period. With the exception of the post-Cold War period (where abundant aid reduces growth), we find no significant effect of aid on growth in any of these sub-samples. None of the other outcomes are affected by aid.
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\nChapter 3: We combine temporal variation in international drug prices with new data on spatial variation in opium suitability to examine the effect of opium profitability on conflict in Afghanistan. District level results indicate a conflict-reducing effect over the 2002-2014 period, both in a reduced-form setting and with three different instrumental variables. We provide evidence for two main mechanisms. First, the importance of contest effects depends on the degree of violent group competition over valuable resources. By using data on the drug production process, ethnic homelands, and Taliban versus pro-government influence, we show that on average group competition for suitable districts is relatively low in Afghanistan. Second, we highlight the role of opportunity costs by showing that opium profitability positively affects household living standards, and becomes more important after a sudden rise in unemployment due to the dissolution of large armed militias after an exogenous policy change.
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\nChapter 4: This chapter analyses how foreign military interventions relate to the internal cohesion of communities and the role of local institutions in times of conflict. I consider the case of Afghanistan where households have been exposed to conflict for decades. Given an environment where formal institutions are unstable or even lacking, the local community becomes more important. Relying on support from others in the community is thus a common strategy for households to cope with different types of shocks. At the same time, the success of security missions crucially depends on cohesion within communities as they are relevant partners in counterinsurgency and reconstruction activities. I address endogeneity by applying different estimation techniques, including a geographic regression discontinuity design. My findings suggest that households in districts where foreign military forces are present receive less help from others in their community, have less trust in community councils and participate less in those councils.

Foreign aid allocations are generally explained in ternis of international politics or state-centric models of foreign policy.1 In fact, foreign aid allocations were recently used as an empirical measure of how the end of the Cold War may have changed the underlying determinants of U.S. foreign policy (Meernik et al., 1998). While the entirety of research findings related to the various foreign aid programs around the world are too extensive to be briefly summarized, analyses have repeatedly demonstrated that aid allocations do tend to reflect the international political roles and interests of individual aid donors.2

The paper explores a number of long standing questions surrounding how foreign aid has influenced the fiscal behaviour of the PNG Government. This includes whether grant aid has encouraged the PNG government to be less fiscally responsible and accumulate higher levels of foreign debt; whether grant aid has tended to lower the PNG government's domestic revenue raising efforts; whether grant aid has drawn government expenditures away from key service delivery sectors; and whether budget support and project and program aid have had differential effects with respect to any of the foregoing questions. The analysis reveals several important insights regarding the interplay between foreign aid and public sector fiscal behaviour including evidence that grant aid has been an important source of debt reduction during this period. However, grant aid has tended to erode the domestic tax base, which has limited the government's ability to increase aggregate expenditure levels. Evidence is also found that suggests a significant portion of budget support was spent on key development sectors, although it also undermined domestic revenue collection. A number of policy implications follow.

The objective of this study is to investigate thevolatilities and business cycle characteristics of three components of foreignfinancial aid into developing countries, namely emergency, program and projectaid from the viewpoint of both recipients and donors. Results show thatemergency aid inflows are more volatile than both program and project aid inboth African and non-African countries and program aid is found to be morevolatile than project aid in both subsamples. Although the volatility of totalaid inflows is lower than component-wise volatilities, it is still higher thanthe volatility of GDP for recipient countries. The volatility of donors’ totalaid outflows is also found to be greater than the volatility of their GDP.Results further showed that total aid is acyclical for the African countries inthe sample. The same finding applies to emergency aid, project aid, and programaid. For the non-African countries, project aid inflows were found to beprocyclical. Emergency aid and program aid were acyclical while total aidinflows to the countries outside Africa were found to be procyclical/acyclical.The final result that emerged from the analysis is that donors give foreign aidin an acyclical fashion to the recipients in the sample.

<p>This paper examines the role of China’s national identities and the impact on its foreign aid policies and practices. The multiple identities shape China’s role as a development partner in pursuit of economic cooperation with aid recipients and that seek to engage with traditional aid donors in terms of aid delivery. To explore the influence of national identities-the victimhood identity, the developing country identity and the rising responsible power identity behind China’s foreign aid policies and behaviors, this thesis uses a solid theoretical foundation-Constructivism. It analyses two empirical cases, the Fiji and the Cook Islands from 2006 to 2013, drawing from a large chunk of literature from English and Chinese publications, government documents, and relevant websites. The thesis finds that China’s aid policies and behaviors are mainly consistent with its victimhood and developing country identities. The country regards itself as a development partner rather than an aid donor and places great emphasis on mutual benefit and non-interference principles with a large proportion of its aid focused on infrastructure, construction-based projects. However, it also uncovers that China has started to address aid recipients’ demands. The country has also learned how to handle aid programs from other donor countries, such as Australia and New Zealand, which is incorporated into China’s new rising responsible power identity. The research aims to challenge the dominated rationality-based analysis and hopes to trigger further discussion about China’s aid and development.</p>

Introduction More than a decade ago, the World Bank argued that “underlying the litany of Africa’s development problems is a crisis of governance.” Poor quality institutions, weak rule of law, an absence of accountability, tight controls over information, and high levels of corruption still characterize many African states today. Aid levels have been reduced in many parts of Africa during the past decade. Yet in many of the countries with poor governance records, aid continues to contribute a very high percentage of government budgets. This article explores the institutional impact of these high levels of aid and the way that large amounts of aid are delivered. There are many reasons why governance is poor in much of sub-Saharan Africa. Colonialism did little to develop strong, indigenously rooted institutions that could tackle the development demands of modern states. Economic crisis and unsustainable debt, civil wars, and political instability have all taken their toll over the past 2 decades and more. It is difficult to separate the impact of these problems from the possible impact of foreign aid, which is often high in countries that suffer from precisely these problems. Theory provides conflicting guidance here. On the one hand, aid can release governments from binding revenue constraints, enabling them to strengthen domestic institutions and pay higher salaries to civil servants. Aid can provide training and technical assistance to build legal systems and accounting offices. In many countries, aid personnel (sometimes expatriate) manage important government programs, and the infusion of resources and technical assistance can give an important boost to the efficiency and effectiveness of governance, if only in a partial sense. Yet despite these likely benefits, it is also possible that, continued over

Anti-Presidential Bipartisanship in U.S. Foreign Policy Under Trump: The Case of the International Affairs Budget

Nearly 30 years have passed since the government of Japan unveiled its first Official Development Assistance Charter. Although it sets forth fundamental guidelines for the government’s foreign aid policy, previous studies have downplayed the influence of the ODA Charter. By contrast, this study argues that the ODA Charter changed Japan’s aid allocation behavior in relation to a number of issues. First, regarding military matters: since the introduction of the 1992 ODA Charter, testing of weapons of mass destruction by developing nations, as well as military expenditures for conventional weaponry by developing nations outside of Asia, have had a negative effect on aid from Japan. Non-military cooperation with military personnel was newly introduced as a principle in the 2015 Development Cooperation Charter, and that type of cooperation increased from 2015 on, a clear indication of the influence of the Charter. Foreign aid designed to serve Japan’s own interests was first discussed in the 2003 Charter, and the proportion of that type of aid has since increased. The aims of avoiding military force and returning economic benefits to Japan, which have long had strong domestic support in postwar Japan, were seamlessly incorporated into the ODA Charter. By contrast, the aims of promoting democratization and protecting the vulnerable—international norms for foreign aid, imported from abroad—are duly set forth in the ODA Charter, which ostensibly guides Japan’s foreign aid policy, but they have had no impact on its actual aid allocation behavior.

Foreign aid plays an important role in promoting economic development in Africa. Recently, several countries, most notably China, have emerged as alternative sources of foreign aid. However, their motives for providing foreign aid have been questioned. The present study examines and compares determinants of China's and Japan's foreign aid allocations in Africa. It assumes that the distribution of foreign aid was determined by the aid donors’ self-interest and also by the aid recipients’ needs. Three panel model methods, namely, the pooled OLS method, the one-way fixed effects method and the two-way fixed effects methods, were employed to examine and compare the patterns of China's and Japan's foreign aid allocation in Africa. The main finding was that the provision of foreign aid by China and Japan was primarily driven by the aid donors’ self-interest. Additionally, the size of population in a recipient country was an important element to determine China's and Japan's aid allocations. The findings also suggest that Japan tended to pay more attention to the aid recipient countries’ needs as well as to the quality of governance and institutions in these countries. Overall, the findings indicate that there was no considerable difference in the motives for the provision of aid between the two aid donor countries.

Preface. I: Some Theoretical Aspects of Foreign Aid. 1. Foreign Aid and Employment Policies in LDCs P. Hatzipanayotou, M.S. Michael. 2. Altruism, Trade Policy, and the Optimality of Foreign Aid S. Lahiri, P. Raimondos-Moller. 3. Foreign Aid and the Welfare Cost of Inflation E. Asem, K.L. Gupta. II: Foreign Aid, Some General Policy Aspects. 4. Foreign Aid and Global Environmental Policies C. Jepma. 5. International Development Assistance and Food Security A. Matthews. 6. Is There a Link Between Aid and Trade Flows? An Econometric Investigation M. McGillivry, et al. 7. Politicising Development? The Role of Participation in the Activities of Aid Agencies H. White. 8. Technical Expertise and Indigenization L.S. Wilson. III: Case Studies: The Donor Experience. 9. Danish Aid Policy: Theory and Empirical Evidence F. Tarp, et al. IV: Case Studies: The Recipient Experience. 10. Can Aid Generate Growth in Africa? A. Bigsten. 11. Cost Benefit Analysis of Foreign Aid for a Highly Distorted Economy: The Case of Sudan K. Han, E. Tower. 12. Foreign Assistance and Development in Bangladesh A.M. Islam. 13. Main Phases and Salient Features of Turkish Foreign Aid Experience F. Senses. 14. The Macroeconomics of Foreign Aid in Sub-Saharan Africa: Dutch Disease Effects Reconsidered J. Rattso, R. Torvik. Index.

China is emerging as a key state actor in international development – a sector that has been dominated by the United States for decades. US and Chinese foreign aid programs can be compared on the basis of several benchmarks: 1) official state definition and accounting of foreign aid programs; 2) historical foundations and origins; 3) sectoral distribution, particularly in terms of the professed goals and objectives of the aid program; 4) nature of targeted recipient actors; 5) institutional mechanisms for delivery in recipient countries. Notwithstanding particular differences, Chinese and US foreign aid portfolios demonstrate their respective strategic political and economic interests in two ways: they shape the domestic politics of recipient countries in ways that accommodate the donor government’s policy preferences, and they enhance the social reputation and legitimacy of the donor state in the international system.