Once ministerial agreement was reached, the MFA began
talks with the recipient government, leading up to an official exchange of notes, which signified a Japanese Government commitment. The
Japanese note was drafted in the F*> st Economic Cooperation Division, checked in the Treaties Bureau and shown to other ministries.
Negotiations were undertaken in the recipient country by the Japanese Embassy. Cabinet approval of the exchange of notes followed, after which a loan agreement was concluded between the recipient government and the OECF. Payment of the loan was carried out in accordance with
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the provisions of the agreement.
The contribution of all ministries to decisions meant that bureaucratic initiative in loans policy was restricted. Responsibility rested with a committee, not with any one division. Loans policy was hard to quantify, built up on a case-by-case basis. There was no planning for loans policy as occurred, in a minor way, for grants or for technical assistance, except in that ODA disbursement targets required certain levels of commitment and implementation. Guidelines were very broad, even amorphous, and loans performance was hampered by delays at project sites, cost overrun and by the capacity of the OECF
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to implement efficiently. The officials, as later chapters will show, only came in towards the end of a long series of steps to begin a loan project, and their decisions were swayed by their own perceptions of the proposed project. Even at this point there was little consensus between ministries, for each had its own interests to guard and
objectives to pursue.
Conclusion: Aid Policy Coordination
Aid policy was piecemeal. Procedures plainly worked against the development of consistent and mutually reinforcing policy for the different kinds of aid. Each had its own group of officials and, more significantly, its own schedule and momentum, but the directions of loans, grants and technical aid were not necessarily in harmony, for there was no means of consciously producing policy acceptable to all officials.
Policy revolved around jurisdiction and coordination, although each separate aid process was subject to those problems to
varying degrees. Multilateral assistance was divided by jealousies and conflicts within and between ministries and the size of flows was determined in the budget context. Simple administrative patterns, reinforced by a widespread disinterest in grants as a policy option, isolated grants from conflicts concerning authority and grant
administrators depended on budgeting for coordination. There still remained, however, the dilemma, posed for grants by its minor
administrative and policy standing, of how it could expand in an aid program dominated by bilateral loans.
In areas where policy-makers were distinct from policy- implementers - loans and technical assistance - arguments about responsibility and the best policy course were loudest. This was because, in aid policy, the fate of aid contributions and the success of implementation affected the size, quality and direction of future aid flows. Aid policy did not end with payment; in one sense, it was only beginning at that point. Where implementation was removed from the direct control of ministries, problems of jurisdiction were heightened as officials competed to achieve as great an influence as possible over the original decisions. Technical aid policy was rife with issues of competence, and loans policy-making was structured on the premise that differences between ministries could not be resolved.
Coordination was not placed above other ministry priorities. Emphasis on procedures concentrated attention on the separate stages of the policy process and on participants, but not on goals. Officials relied heavily on budgeting to draw elements of aid policy together, although Chapter 6 will demonstrate that this was not effective. Even aid subject to attempts at planning, such as technical aid, could not be extracted from the short-sighted constraints of budgeting. Loans
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policy, which aimed at quantity rather than content, was isolated from coordination with other forms of aid.
The nature of aid policy as one encroaching on significant areas of government - tariffs, trade, industrial structure, for example - and, in Japan, a policy with no fixed bureaucratic "home" and no steady political support, meant that fundamental changes in aid policy depended on the extent to which coordination could be effected
(a) between aid and other national policies;
(b) between the kinds of aid to a particular country; and
(c) between different parts of the entire aid program.
This coordination could not come easily, nor quickly, for in all of these categories there was a prior need for a government statement of objectives in aid policy, some set of principles to underpin ministry
programs.
(a) Initially, an attempt had to be made to rationalise the relations between aid and other national policies, not to supplant them but to find an appropriate marriage of the policy interests of the main ministries. Accommodation between ministries, however, was premissed on consistency within ministries and we saw how difficult this proved. Coordination at the national level required some compromise between the positions of the MFA, the MOF and MITI, but here the MFA was at a disadvantage, for it had no domestic power base, was unskilled at domestic bureaucratic infighting and had few weapons to use in budget negotiations.