Abstract
With Japan set to become the world’s largest aid donor, this paper assesses Japan’s capacity for leadership in international aid policy. It appraises the strictures in the domestic aid system alongside Japan’s poor performance in many areas of aid activity. Longstanding dominance in aid to Asia, and recent growth in Japan’s aid profile in the Pacific, suggest the potential for Japan to be seen as a regional leader in aid. Recent initiatives in increasing its aid flows, raising its contribution to debt relief, are also positive, but Japan’s leadership position is yet to be reflected in most international financial institutions. External leadership capacity remains inhibited by domestic structural weaknesses in the aid system and insufficient political and popular support. There is little immediate prospect of Japan taking other than a limited leadership role in the foreign aid area. “Cooperative hegemony” between Japan and the U.S. is still the likely option for Japan.