This chapter discusses Japan’s increasingly significant role in global multilateral economic institutions (MEIs) with particular reference to the changing relations between Japan and the World Bank from the perspective of global governance. Japan’s foreign policy has typically been seen as passive and reactive (under domestic political pressure and the external pressure of the US) and as constrained (by the international circumstances in which Japan has found itself). However, relations between Japan and the World Bank in the 1990s and the early 2000s suggest a more proactive effort by Japan to mobilize its official development assistance (ODA) policy, with increasing emphasis being placed on multilateral aid. This proactive role in the provision of multilateral aid is in stark contrast to most of the existing literature on Japanese ODA, which still focuses on bilateral ODA relations. What is now needed is an extension of ODA analysis to take into account multilateral aid. Undoubtedly, Japanese ODA has been an integral, and perhaps the only visible, political and economic component of Japan’s national interest as expressed through the foreign policy pursued. Certainly, in the postcold war period, Japanese ODA has become a strong measure of foreign policy activity. This chapter argues that, despite the existence of many constraining factors, Japan’s foreign economic policy has recently begun to emphasize the country’s international responsibilities, with a new focus on MEIs. In terms of the implications of these trends for the emergent system of global governance, it is clear that Japan’s stronger role in the World Bank has given it an opportunity to contribute more positively and more assertively to the functioning of governance on a global scale. Japan’s role is especially significant because it derives from a primarily economic basis rather than from any overt politico-military role (although, as seen later, in the 1990s it became much more difficult to draw a clear dividing line between economics and politics); and it builds upon Japan’s strong past record as a provider of bilateral ODA. This raises the key issue of how Japan actually exercises its influence within the World Bank and how political that role is, for example, in the development of World Bank policy through interactions with World Bank officials and the representatives of other governments, especially the US and the countries of the European Union (EU). The links between Japan’s
national policy-making institutions and networks, including its powerful Ministry of Finance (MOF, which is in charge of Japanese operations at the World Bank and other MEIs but delegates much decision-making power to the Ministry’s International Finance Bureau, IFB), the Ministry of Foreign Affairs (MOFA), major ODA agencies in Japan, and the international policy-making level at the World Bank, are especially important in this respect. This involves the roles of both elected politicians and appointed officials. In the case of MOF, it is noteworthy that its aid decisions and actions are relatively unconstrained by political bodies, including the Japanese parliament.