Cambodia Development Institute

Title:
DUAL DETERMINANTS: AID DISBURSEMENT AND VOLUME, WITH A 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. Using Japanese data, in comparison with other donors, this study first analyzes the determinants of Japanese aid disbursement, with an emphasis on the 1960s and the 1970s periods. It is found that Japan’s aid disbursement pattern in the earlier period is different from that in the rest. War reparations and lacking clear aid objectives during that period may explain this discrepancy. The second part of the study examines what determines aid volume before its disbursement. Using several donor-based variables of Japanese data, we find an inverted-U shape between income and aid with a turning point at around $28,000. This relationship is more transparent than any other donors due to weaker ties with its former colonies and wider income spectrum.