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Article 6 in 2008
First published in ejcjs on 15 November 2008

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The 'Honne-Tatemae' Dimension in Japan's Foreign Aid Policy

Overseas Development Aid Allocations in Southeast Asia[1]


Fumitaka Furuoka

Universiti Malaysia Sabah


Iwao Kato

Wako University

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This paper employs the socio-psychological concept of 'honne-tatemae' to analyse Japanese foreign aid policy. Tatemae refers to the 'façade' or 'appearances' while honne signifies the 'real intention'. The Japanese government has pledged to use foreign aid to promote economic development and political stability in developing countries. On the other hand, Japan's official development assistance (ODA) program has been repeatedly criticised for being employed as a tool to promote Japan's own commercial interests. In this context, altruism could be a superficial principle of Japanese foreign aid policy which forms the 'tatemae' dimension while selfishness could represent a true hidden motive for the aid giving and form the 'honne' dimension. The present paper uses panel data analysis to examine which element – honne or tatemae – has influenced the decision-making process of allocation of Japan's ODA to Southeast Asia. The findings indicate that the volumes of Japan's exports to and income levels in the aid recipient countries had a significant influence on foreign aid distribution. The Japanese government tended to allocate bigger amounts of money to Japan's major trade partners in ASEAN. At the same time, the poorer nations in the region received more of Japan's ODA compared to the comparatively well-off nations. In other words, both altruism (tatemae dimension) and selfishness (honne dimension) characterise Japan's ODA flows.

Key Words: ODA, Foreign Aid Policy, Japan, ASEAN

1. Introduction

Japan's considerable economic power offers a good means for the country's active participation in international affairs and for developing foreign aid giving into one of the most important instruments of Japanese diplomacy.

Despite the important role that the Official Development Assistance (ODA) program plays in Japan's relations with the rest of the world, the country's aid-giving activities have attracted strong criticisms from abroad. For example, Hook and Zhang (1998) argued that humanitarian considerations for aid-giving were mere rhetoric while Japan's real intention was promoting its own economic interests. In other words, Japan has tended to allocate the main bulk of ODA funds to major trade partners while the needs of poor countries with weak commercial ties with Japan have been overlooked. Considering these criticisms a critical and pertinent question has to be raised, namely: Is Japanese ODA policy based on altruism or selfishness?

This paper assumes that Japanese aid policy is of a dual nature and has two dimensions, which means that while the Japanese government makes explicit pledges to use the foreign aid to contribute to poverty eradication and environmental protection, it does not reveal its own economic agenda hidden behind these pledges.

The duality of Japanese aid policy can be better understood by employing a socio- psychological concept of honne-tatemae. Tatemae signifies 'façade' or 'appearance' while honne means 'the real intention'. Japan ostensibly uses its foreign aid for altruistic reasons, such as the promotion of development and prosperity in the international community. This altruism can be viewed as a superficial principle of Japanese ODA, and which forms the 'tatemae' dimension. On the other hand, considering a reality that Japanese foreign aid policy has repeatedly come under criticism for being commercially-motivated and aimed at promoting Japan's own economic well-being, the selfish motives can be considered as the hidden principle of Japanese aid giving activities that forms the 'honne' dimension.

Apparently, Japan is not quite ready to discard selfish interests (honne) and fully concentrate on the pursuit of altruism (tatemae) in its ODA policy. In all likelihood, in the process of Japanese aid policy conception and implementation honne would continue manipulating tatemae. This article aims to explore which of the two dimensions – honne or tatemae – has had a major influence on the decision-making process regarding the distribution of Japan's ODA. The article carries out panel data analysis to examine the determinants of Japanese aid allocations in selected Southeast Asian countries.

The article has seven sections. Following this Introduction, Section 2 gives a brief explanation of the honne-tatemae socio-psychological concept. Section 3 contains an overview of Japan's aid-giving history while Section 4 reviews some of the available research studies on the determinants of aid allocation. The research methodology is presented in Section 5. Section 6 reports the results of the statistical analysis. Section 7 concludes the article.

2. Honne-Tatemae and Japanese Communication Style

A pertinent question that needs some consideration is: How unique is the honne-tatemae pattern of Japanese communication style? Robert March (1988) identified 'tatemae' as the notion of 'face'. As he wrote, 'Behaviour that is finally decided on as permissible, fit for public consumption … is called tatemae in Japanese … Thus, tatemae is equivalent to 'face', not indeed a fixed face, but the face that is suited to a particular occasion' (March, 1988, pp.142-143). However, an important fact that the Japanese use 'face' to hide the real intention (honne) seems to be overlooked. This duality of an apparently friendly 'face' and the hidden 'real intention' could constitute some uniqueness in the Japanese communication style.

Concealing one's feelings or intentions when communicating and negotiating with others is an acceptable and indeed widely-adopted mode of behaviour in many cultures. However, the extent to which the Japanese would go to conceal their own feelings has been described as unusual. According to Berton (1998, p.151), 'While many of the Japanese negotiating practices were found to have parallels in other countries, on balance the best way to characterize Japanese negotiating behaviour is to call it almost unique'.

The Japanese tend to avoid explicit communication styles practiced in other cultural settings. To discuss the differences in communication styles Edward Hall (1976, p. 79) used the concept of low context and high context communication. According to Hall, the Swiss-German communication style is the most explicit, or low-context, while the Japanese communication style is the most implicit, or high-context. This means that the level of discrepancy between what is said (tatemae) and what is meant (honne) is the highest among the Japanese. The Japanese use an acceptable 'for public display' language and the way of expressing oneself, while the actual message, which could be considered as less acceptable, remains obscured. This dual-layer approach to communication where the upper layer is appearances (tatemae) and the lower layer is the hidden real intention (honne) is a peculiar Japanese communication style trait.

Another distinguishing feature of Japanese society which needs to be mentioned here is a strong sense of collectivism among its members. As Hofstede (1991, pp. 260-261) wrote, 'Collectivism stands for a society in which people from birth onwards are integrated into strong, cohesive in-groups, which throughout people's lifetime continue to protect them in exchange for unquestioning loyalty'. This strong tendency to collectivism within Japanese society may offer an explanation as to why its members prefer to conceal their real intentions and feelings. Yamaguchi (1994) studied collectivism in Japan and concluded that expectations of reward and avoidance of punishment from one's in-group members fortified the collectivistic tendencies of Japanese society. This unquestioning loyalty to the in-group can be held accountable for a large discrepancy between tatemae, which is often the accepted values of one's in-group, and honne, which is the individual's own (hidden) values and preferences.

The strong sense of collectivism and loyalty to the in-group peculiar to Japanese society may offer a way to explain discrepancies between what is being publicly declared and what is being done in Japan's foreign aid policy. Japan identifies itself as a member of the Western democracies in-group (uchi). As a developed democratic country, Japan makes suitable and indeed expected announcements regarding its foreign aid program implementation. The Japanese government pledges to use the ODA funds to promote development and prosperity in aid recipient countries, which is the tatemae dimension, while at the same time using the foreign aid program as a tool to pursue Japan's own economic interests. Thus, differentiating between altruistic reasons (tatemae) and the pursuit of selfish interests (honne) boils down to the perceived acceptability of an action within Japan's in-group of developed democratic nations.

This paper employs the socio-psychological concept of honne-tatemae to analyse Japanese aid allocation patterns. It assumes that there exists disparity between the real intentions (honne) and superficial principles (tatemae) in Japan's foreign policy.[2]

3. Japan's Aid Giving History

In 1954, Japan joined the Colombo Plan and began accepting technical trainees from Asian countries. This marked the beginning of Japan's foreign aid-giving history (MOFA 2004).

It is interesting to note that Japan began providing economic assistance to developing nations when it was itself a poor country dependent on aid from foreign donors. Until the 1960s, Japan was one of the major receivers of foreign aid from the World Bank and other international organisations. This means that in the beginning of its aid-giving history Japan was a donor-cum-recipient country within the foreign aid regime. It was only in the year 1990 that Japan finally repaid all loans it had previously received from the World Bank (Furuoka, 2006, p.69).

As Japan's economy grew stronger, the Japanese government kept allocating bigger amounts of money for ODA activities. In the 1970s, the amount of foreign aid given by the Japanese government doubled. By the end of the 1970s, a more systematic and proper management of ODA money was needed. Therefore, in 1977, the first 'Medium Term Target for Japan's Official Development Assistance (ODA)' was introduced in order to streamline the distribution of Japan's foreign aid. Since then, five Medium Term Targets for foreign aid have been implemented.

In 1980, Japan gave USD3.3 billion as foreign aid and became the second largest aid donor in the world after the United States. In 1985, the amount of Japanese foreign aid increased to USD3.7 billion. Following the Plaza Agreement of 1985, when the Japanese Yen sharply appreciated against the US dollar, the total amount of Japan's ODA valued in US dollars soared, and in 1989, Japan achieved the status of the top provider of foreign aid in the world.

The emergence of Japan as the largest aid donor coincided with the onset of economic stagnation in the country. As the Japanese economy suffered worsening recession, Japanese taxpayers began to doubt whether disbursing huge amounts of money as foreign aid at a time of domestic economic hardship was a wise policy. To abate these public concerns and to utilise increasingly limited tax revenues more efficiently, the Japanese government made the process of ODA funds distribution more transparent and accessible to the scrutiny of the general public (MOFA 2002).

In the 1990s, Japan remained an important provider of foreign aid. However, in 2001, the total amount of Japanese foreign aid drastically declined to USD9.8 billion from the previous year's USD13.5 billion. This allowed the United States to regain its position as the top aid-giving nation. In 2002, Japan's foreign aid disbursement amounted to USD9.2 billion while foreign aid given by the United States was USD13.2 billion (MOFA 2005).

Table 1 reports the distribution of Japan's ODA by region in 2002. As the table shows, the allocations of Japanese aid were not geographically even. Asia was the main destination for Japan's ODA funds, receiving 60.7 per cent of Japanese bilateral aid. Furthermore, East Asian countries received 64.1 per cent of total Japanese bilateral aid given to Asia. For comparison, in 2002, Latin American countries were allocated 8.8 per cent of Japan's total bilateral aid. The share of African countries remained low as they received only 8.7 per cent of Japanese aid. Japan's foreign aid to the Middle East made up 3.1 per cent.

Table 1: Geographical Distribution of Japanese Foreign Aid in 2002


USD million

Share (per cent)

East Asia



Southwest Asia



Central Asia



Middle East






Latin America









Source: MOFA (2005)

It should be noted that the major recipients of Japanese foreign aid were Japan's major trade partners (Table 2). Thus, Asian countries with the strongest trade links with Japan – China, Indonesia, India, Vietnam, and the Philippines – were the top five recipients of Japan's ODA. Interestingly, Azerbaijan, a country that was not among Japan's top ten trade partners in the region, is featured in the list of the biggest recipients of Japan's ODA. This may be due to a fact that Azerbaijan, being rich in oil and natural gas, could be viewed by policy makers in Japan as an important alternative source of energy.

Table 2: Major Recipients of Japanese Bilateral Aid and Japan's Major Trade Partners

Top ten recipients of Japanese bilateral aid (2002) Percentage share of Japan's ODA Japan's top ten trade partners among developing countries Percentage share of Japan's exports
Country Per cent Country Per cent
1.China 12.32 1.China 7.7
2.Indonesia 8.00 2.Thailand 3.0
3. India 7.34 3.Malaysia 2.7
4.Vietnam 5.57 4.The Philippines 2.0
5.The Philippines 4.73 5.Indonesia 1.60
6.Pakistan 4.48 6.Panama 1.2
7.Thailand 3.31 7.Mexico 1.0
8.Azerbaijan 2.11 8.Brazil 0.6
9.Bangladesh 1.82 9.India 0.5
10.Peru 1.78 10.Vietnam 0.3

Source: Data on bilateral aid are from MOFA (2005). Data on exports are from JETRO (2008)

As Table 2 shows, no African country is included among the major recipients of Japanese foreign aid despite a fact that the region, especially Sub-Saharan Africa, is plagued by numerous economic, social and political problems and desperately needs economic assistance from foreign countries. In short, these data indicate that the Japanese government tends to give priority to Japan's major trade partners when allocating ODA funds.

Regarding Japanese aid to ASEAN, among eight low-income ASEAN nations selected for this study, Vietnam has been an important destination for ODA funds (see Figure 1). On average, it received more than USD400 million per year.

Figure 1: Japanese Foreign Aid Allocation in ASEAN from 1999 to 2005 (Million US Dollar)

Source: MOFA (2008).

Thailand received a considerable amount of aid from Japan in 1999; the aid was given to abate the consequences of the Asian financial crisis. From 2002 to 2005, the net balance of Japanese foreign aid disbursement to Thailand (i.e. the amount of foreign aid disbursement to the country minus the amount of loan repayment) was negative. Thailand paid back more than USD1,002 million as a loan repayment in 2003 (MOFA 2008).

By contrast, three countries, namely Cambodia, Myanmar and Laos, were minor recipients of Japanese foreign aid. Cambodia received approximately USD100 million worth of foreign aid from Japan; Laos was allocated approximately USD80 million, and Myanmar received less than USD50 million of Japan's ODA per year (MOFA 2008).

4. Japan's Foreign Aid Allocation

Although foreign aid giving is an important pillar of Japanese foreign economic policy, quantitative research studies that systematically examine determinants of Japanese foreign aid allocation are still lacking. Many previous studies have examined the US foreign aid allocation model and mainly focused on establishing whether there exists a linkage between US foreign aid distribution and human rights conditions in developing countries (Schoultz 1981; Stohl and Johnson 1984; Cingranelly and Pasquarello 1985). The findings of these studies yielded contradictory results.

Shoultz (1981) used cross-country data and concluded that there had been no connection between the amounts of aid given by the United States and the human rights conditions in the aid recipient countries. In a similar vein, Stohl and Johnson (1984) maintained that no obvious relation could be detected between the aid recipients' observance of human rights and US foreign aid allocations. On the other hand, Cingranelli and Pasquarello (1985), who also used cross-country data, argued that the human rights situations among the aid recipients did influence the amounts of US foreign aid given to these countries.

Trumbull and Wall (1994) conducted pioneer research that employed panel data to analyse foreign aid allocations. Their study established the existence of a positive relationship between the observance of human rights and the allocations of aid. Trumbull and Wall recognized that the results of their study could be unexpected since many of the previous inquiries on the topic pointed to the lack of a positive linkage between foreign aid allocation and the recipient countries' human rights practices (Trumbull and Wall 1994).

Recent research studies included other determinants for the provision of foreign aid, such as economic governance, economic policies, and the level of poverty in recipient countries. Canavire, Nunnenkamp, Thiele, and Triveño (2005) focused on total disbursement of aid over the period 1999-2002, as reported by the Organisation for Economic Co-operation and Development (OECD). They concluded that poorer countries received larger allocations of development assistance from both bilateral and multilateral donors. Also, their findings suggest that well governed recipient countries tended to receive 'significantly more aid' from the aid donors (p.30). A study by Dollar and Levin (2004) examined allocations of foreign aid by 41 donor agencies from 1984 to 2002. The authors found that while in the late 1980s the donors gave foreign aid 'indiscriminately to well governed and poorly governed countries alike', the latest trend in aid giving activities favoured allocation of larger amount of aid 'to poor countries that have reasonably good economic governance' (p.13). Furuoka (2008) examined aid allocations by aid donors over the period 2000-2005, using both the static and the dynamic panel data model. The findings revealed a complex nature of aid allocations. Thus, the static panel data models indicated that the poorer developing nations were allocated larger amounts of aid by the donors. The dynamic panel data models showed contradicted results, wherein relatively wealthy developing countries have received larger amounts of foreign aid.

Some researchers have focused on Japanese foreign aid (eg., Hook and Zhang 1998; Katada and McKeown 1998; Furuoka 2005; Neumayer 2003). Hook and Zhang (1998) coined the terms 'Ministry of Trade and Industry (MITI) discourse' and 'Ministry of Foreign Affairs (MOFA) discourse' to distinguish two different trends in the decision-making of Japanese ODA funds' distribution. As the researchers argued, in the process of discussing ODA allocations, MITI would focus on Japan's economic relations with the aid recipient (eg., Japanese exports, imports and direct investments), while MOFA would scrutinize human rights practices and socio-economic conditions in the aid recipient country. Hook and Zhang found that the MITI's criteria were positively and significantly related to Japan's aid flows while MOFA's criteria did not influence the decision-making process.

Katada and McKeown (1998) included socio-economic conditions of the aid recipient countries, such as per capita GDP, among the variables in their study. They detected no significant relationship between the per capita income in the aid recipient countries and Japanese aid flows. In the study by Dollar and Levin (2004) cited above, the authors maintained that while Japan was selective about giving aid to the donors with better governance and economic policy, it did not consider the poverty index in the recipient countries. As they concluded, this reflected Japan's 'pattern of giving large amounts of aid in Asia to countries that are well governed but in many cases not poor' (p.1).

Furuoka (2005, p. 125) who examined Japanese aid allocations for the period 1984-2001 concluded that 'the findings reveal the lack of evidence to prove that human rights condition in aid recipient countries has influenced the allocation of Japanese aid'. This conclusion is in contrast to Neumayer's (2003) study that identified Japan as an aid donor country that allocated larger amounts of foreign aid to developing nations with better human rights records.  

5. The Japanese ODA Allocation Model

This article uses panel data to analyse the allocation of Japan's ODA funds to selected Southeast Asian countries over the period 1999-2003.[3] The panel data include eight low income ASEAN countries: Indonesia, Cambodia, Laos, Malaysia, Myanmar, the Philippines, Thailand, and Vietnam.[4] The advantage of the panel data analysis is that it offers a better insight into the complex nature of aid allocations. The empirical model in this study assumes that Japanese foreign aid is determined by three factors:

  1. Japan's economic interest,
  2. The recipient country's income level,
  3. The recipient country's human rights practices.

It should be noted that the current study does not include the amount of foreign direct investment (FDI) from Japan among the determinants. This is because four of the ASEAN countries – Cambodia, Indonesia, Laos and Malaysia – did not receive substantial amounts of foreign direct investment from Japan over the period 1999-2004 (see Table 3). Japanese FDI in Myanmar over the period 2001-2004 was also insignificant.

Table 3: Japanese Foreign Direct Investment in ASEAN from 1999 to 2004 (Billion Japanese Yen).





































The Philippines


















Source: MOF (2008)

Japan's economic interest, the first among the three factors listed above, could be viewed as the honne dimension within the Japanese ODA program. Taking the criticisms of the Japanese aid program into consideration this study assumes that the Japanese government allocates bigger amounts of development aid to the countries that represent important markets for Japanese companies.

The second determinant – the recipient country's income level – can be considered as the tatemae dimension of Japan's aid program. Income level could be among important determinants of Japan's aid-giving because countries with low per capita incomes would need larger amounts of funds to promote economic development compared to lower-middle income countries. This study hypothesises that countries with low per capita Gross National Income (GNI) received bigger amounts of development aid from Japan.

The third determinant – the recipient country's human rights practices – could also be considered as a tatemae dimension. Many aid donors, such as the United States or the European Union, have used their foreign aid to promote the so-called 'universal' values of human rights, freedom and democracy. The Japanese government has set the promotion of human rights as an important principle of Japan's foreign aid policy (MOFA 2003). Therefore, this study assumes that the Japanese government would suspend or reduce the amounts of ODA funds to the recipient countries with repressive regimes and poor records on human rights while more of the aid money would be allocated to the aid recipients with better human rights practices.

To incorporate the three determinants, the model will include one dependent and three independent variables. Thus, Japan's ODA allocation could take a form:

ODAit = f (Exportsit, Incomeit, Human Rightsit), (1)

where ODA is the natural log of Japan's ODA to recipient country i in the year t; Export is the natural log of Japan's exports to recipient country i in the year t; Income is the natural log of per capita Gross National Income (GNI) in recipient country i in the year t; Human Rights is the human rights condition in recipient country i in the year t. This study uses the Freedom House Index of political rights to measure human rights conditions in the aid recipient countries.[5]

Three separate methods are used in this study to analyse two models:

  1. The Restricted Model, and

  2. The Unrestricted Model.[6]

First of all, in order to examine the determinants of Japanese ODA policy, the restricted model could be based on the following equation:

ODAit = a + b1 Exportsit +b2 Incomeit +b3 Human Rightsit + eit , (2)

where a is the intercept; b1, b2, and b3, are slope parameters; eit is the error term.

To incorporate period effects, the unrestricted or fixed-effects model could take a form:

ODAit = at + b1 Exportsit +b2 Incomeit +b3 Human Rightsit + eit, (3)

where at is period-effects.

If there exist period effects in the regression model, the pooled OLS, or equation (2), cannot effectively estimate the linkage between the independent variables and Japanese ODA allocations (Greene 2003, p. 289).

6. Empirical Results

Results of the panel data analysis are presented in Table 4. The multiple coefficient of determination (R2) in the pooled OLS is 0.517. Controlling for period effects causes R2 to increase considerably to 0.575.

Table 4: Japanese ODA Allocation Model

Dependent Variable: ODA

Independent variables:

Exports, Income, and Human Rights

Model 1 Model 2
Restricted Model:

Equation (1)

Unrestricted model with period effects:

Equation (2)











Human Rightsit








Adjusted R2



Overall significance




F Test for Model Specification

(Model 2 vs. Model 1)


  • ODA = natural log of Japan's ODA to the recipient countries

  • Exports = natural log of Japan's exports to the recipient countries

  • Income = natural log of per capita GNI in the recipient countries

  • Human Rights = Human rights conditions in the recipient countries

  • Numbers in parentheses are t-statistics.
  • * indicates significance at 0.01 level

To compare the restricted model with the unrestricted one, the null hypothesis that at (period effects) equals zero could not be rejected at the 0.05 level of significance. This indicates that the restricted model could be better suited for the purposes of this research.

As the findings from the restricted model show, two independent variables – Exportsit and Incomeit. – are statistically significant while another independent variable – Human Rightsit – is not statistically significant. This means that Japan's exports to the selected ASEAN aid recipient countries had a significant and positive relationship with Japan's ODA funds distribution; the volume of Japanese exports to the recipient countries was positively correlated with Japan's ODA flows. Thus, Japan's trade partners in ASEAN received greater amounts of developments funds from Japan. Regarding income levels in the selected ASEAN countries, the analysis detected a significant and negative relationship between per capita income and the ODA allocations in the eight low-income ASEAN countries. This implies that the Japanese government allocated more ODA funds to poorer countries.

These results reveal that Japan's ODA policymakers did not consider the condition of human rights in the selected ASEAN countries as an important prerequisite for providing foreign aid. On the other hand, the volumes of Japan's exports to the aid recipients as well as income levels were important determinants for the allocation of ODA funds.

As a next step, this paper estimated the 'hysteretic effects' on Japanese aid allocation. The presence of the 'hysteretic effects' indicates that aid allocation in the year t or ODAit is influenced by the allocation in the previous year, i.e., in the year t-1 or ODAit-1. A model with the 'hysteretic effects' can be estimated by a dynamic panel data analysis which includes a one-year lagged value of the dependent variable, ODAit-1, as another independent variable.[7] The present paper employs a dynamic panel analysis developed by Arellano and Bond (1991) to estimate the 'hysteretic effects' in the Japanese aid allocation model.[8] Results of the Japanese aid allocation model with 'hysteretic effects' are presented in Table 5.

Table 5: Japanese ODA Allocation Model with the 'hysteretic effects'

Dependent Variable: ODA


Independent variables








Human Rightsit






Numbers in parentheses are t-statistics.

As the findings from the restricted model show, there is no independent variable which is statistically significant. Thus, Exportsit has a non-significant and negative relationship with Japan's ODA distribution in the selected eight ASEAN counties. Incomeit, has a non-significant and positive relationship with the allocation of ODA funds. Human Rightsit has a non-significant and positive relationship with ODA funds flow. Finally, ODAit-1, has a non-significant and negative relationship with aid allocation. These findings indicate that there were no 'hysteretic effects' in the decision-making process on Japan's ODA allocation.

In short, the findings of the panel data analysis show that Japan's ODA allocations to the selected ASEAN countries were influenced by both altruism (tatemae dimension) and selfishness (honne dimension). Japan tended to give bigger amounts of foreign aid to the poorer ASEAN countries, which reveals the presence of altruism (tatemae) in Japan's aid program. Selfishness (honne) was also evident because Japan's major trade partners received bigger amounts of foreign aid than less commercially important countries. The dynamic panel analysis indicated that there were no 'hysteretic effects' in the decision-making process on the allocation of ODA funds.

7. Conclusion

Foreign aid giving is an important part of Japan's foreign economic policy and one of the pillars of Japan's diplomacy. The Japanese government has repeatedly pledged to use its ODA program to contribute to economic development and prosperity in the world. However, Japan's ODA has been a subject of harsh criticism for being used as a tool to promote and advance Japan's own economic interests.

This paper employed the panel data analysis to examine the underlying motivation for the provision of foreign aid to eight ASEAN countries, i.e., Indonesia, Cambodia, Laos, Malaysia, Myanmar, the Philippines, Thailand, and Vietnam. The study aimed to explore whether altruism or selfishness was the driving force of Japan's ODA program.

The findings of the panel data analysis indicate that the volume of Japan's exports to and income levels in the aid recipient countries had a significant influence on the distribution of ODA funds. This means that the Japanese government tended to allocate bigger amounts of money to Japan's major trade partners and to the poorer countries in ASEAN. The fact that the Japanese government tended to give bigger amounts of foreign aid to the poorer ASEAN countries indicates the presence of altruism (tatemae) in Japan's ODA policy. On the other hand, selfishness (hone) was also evident in Japan's aid giving mechanism because countries that are commercially important for Japan received more foreign aid than the countries that had weak trade links with Japan. In other words, Japanese aid allocations have been motivated by both altruism (tatemae) and selfishness (honne).

To conclude, the main reason as to why Japan practices both honne and tatemae approaches in its aid policy could be that the country's government understands that, as an aid donor, it needs to act in concert with other aid-giving countries and include humanitarian considerations and promotion of 'universal values' into the country's ODA program. Tatemae helps to highlight the altruistic side of the aid-giving as fit for a developed democratic nation. However, the necessity to ensure 'political correctness' in Japan's ODA program does not mean that the pursuit of Japan's own economic interests is abandoned, as the presence of the honne element in the distribution of aid funds attests. The duality of Japan's ODA policy impairs the effectiveness of Japan's ODA program in that it has the potential to undermine its consistency.

A gap between words and action in Japan's ODA policy sends confusing signals to aid recipient countries. The recipients' drive for reforms and implementation of desirable social and economic policies could be weakened if they have a strong perception that despite the rhetoric 'business' is conducted as usual. Japanese aid policy-makers need to overcome the honne-tatemae approach to aid-giving to make Japan's ODA program more effective in fighting poverty and bringing prosperity to aid recipient countries.

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[1] An earlier version of this paper was presented at the International Conference on Japanese Relations with ASEAN Since the Fukuda Doctrine, on December 3-4, 2007, in Rumah Universiti, Universiti Malaya.

[2] There has been an on-going debate as to whether Japanese culture and society are indeed unique. This debate is known as nihonjinron and focuses on 'theories about the Japanese'. According to John Dower (1986), the debate started during World War II when Japanese scholars came up with a variety of concepts to assert special traits of Japan and its people. It has been argued that until now Japanese scholars prefer using Japan-originated concepts to analyze communication patterns. For example, a Japanese psychologist, Takeo Doi (1981) used one such concept, amae (dependency), and maintained that amae is the key to understanding the behaviour of the Japanese. There have been both critics and supporters of such attempts. As Befu (2001) argued, the discussion of Japanese identity as a species of cultural nationalism can be found everywhere. Some researchers (eg., Dale 1986) described the efforts to uphold the notion of Japan's uniqueness as cultural nationalism which is hostile to both individual experience and the notion of social diversity. Dale dismissed Doi's (1981) work as another attempt to establish the uniqueness of Japan. On the other hand, some scholars (eg., Johnson 1993) considered Doi's work as a contribution to the field of social psychology.

[3] The data on Japanese ODA from 1999 to 2003 was obtained from the MOFA ODA homepage, [accessed on August 2, 2005]. The data on the condition of human rights is available from Freedom in the World Historical Rankings Comparative scores for all countries from 1973 to 2006 [accessed November 5, 2008]. . The source for data on aid recipient countries' income levels and size of population is the World Bank's EdStats, [accessed August 2, 2005]. The data on Japan's exports was obtained from the Ministry of Finance's homepage. [accessed August 2, 2005].

[4] Singapore and Brunei are excluded from the panel data analysis because they cannot be considered as low income countries. Singapore's per capita Gross National Income (GNI) is approximately USD27,000, while Brunei's per capita GNI is USD17,000 (World Bank 2005). This study employs a similar method to the one adopted by Trumbull and Wall (1994) who analysed the aid allocation of all aid donor countries over the period 1984-1989, and by Furuoka (2005) who analysed Japan's aid allocation from 1993 to 2001.

[5] The index uses a one-to-seven scale and assigns higher numbers to countries with worse human rights conditions.

[6] The restricted model includes only a common constant. On the other hand, the unrestricted model includes fixed effects; therefore, it can be called the 'fixed-effects model'. This model is better suited for the cases where there exist unobservable time-effects (e.g., volatility of foreign exchange rate, or fluctuations in the aid budget size).

[7] For a detailed discussion on the dynamic panel estimation, see Baltagi (2005).

[8] This panel data estimation uses Dynamic Panel Data (DPD) software for Ox written by Jurgen Doornik, Manuel Arellano, and Stephen Bond.

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Copyright: Fumitaka Furuoka and Iwao Kato
This page was created on 15 November 2008.

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