2 Enhancement of Strategic Approach and Fine-Tuned System Design
(1) Strengthening Alignment of Policy Formulation and Project Implementation
A. Policy Framework on Development Cooperation
Under the Development Cooperation Charter, which sets out Japan’s development cooperation principles, the Ministry of Foreign Affairs (MOFA) formulates the Country Assistance PolicyNote 15 for each recipient country and the Sectoral Development Policy.Note 16
The Country Assistance Policy identifies the priority areas and direction of Japan’s development cooperation for a developing country, taking into account its political, economic, and social situations along with its development plans, development challenges, and other relevant factors. The Rolling Plan is developed in addition to the Country Assistance Policy as a compilation list of all ODA projects at various stages of implementation, organized by priority area of assistance, the development issue, and the cooperation program with the visualized implementation schedule, in order to increase correlation and forward planning of development cooperation.
Japan also formulates a Sectoral Development Policy in light of international efforts on development, such as the Sustainable Development Goals (SDGs).
To implement Japan’s development cooperation more effectively, Japan shares its medium-term priority areas and development cooperation policies with partner governments, while also strengthening policy consultations with them and promoting efforts to achieve mutual recognition and understanding.
B. Implementation Architecture of Development Cooperation
In the implementation of development cooperation in accordance with the relevant policies, the government and implementing agencies work together to effectively utilize different modalities such as grant aid, technical cooperation, and loan aid. With a view to maximizing development impacts, Japan aims to implement development cooperation with the optimized combination of bilateral cooperation and multilateral cooperation through international organizations and NGOs and toward co-creation in partnership with various actors.
In order to strengthen the posture that benefits project formulation, selection, and implementation, Japan holds the country-based ODA Task ForceGlossary in each ODA-recipient country, comprised mainly of the Embassy of Japan and the JICA office, who have first-hand knowledge of local development needs and operational realities in consideration of the status of the bilateral relations and political, economic, and social situations. In addition, the ODA Task Force participates in the process of drafting the Country Assistance Policy and the Rolling Plan, formulating and shortlisting project candidates, strengthening collaborations with other donors, international organizations, Japanese companies, and NGOs with active local presence, and recommending and reviewing development cooperation modalities.
Japan also provides follow-up support after the project implementation period to ensure that each project is widely recognized and properly appreciated by the government and people of the recipient country long after its completion.
C. Improving Management and Ensuring Accountability for ODA
From the perspective of improving the effectiveness and efficiency of development cooperation and ensuring accountability to the Japanese public, it is important to carry out proper evaluations and use the results of evaluations for better policies and projects. In order to improve management and fulfill the accountability for ODA, Japan has taken the following measures: (i) enhancing the PDCA cycle (policymaking and project formation (Plan), implementation (Do), evaluation (Check), improvement (Act)), (ii) strengthening program approaches, and (iii) reinforcing “visualization.” With these measures, Japan has been striving to ensure strategic consistency in the PDCA cycle of its development cooperation.
The ongoing efforts toward the enhanced PDCA cycle include: (i) formulating Country Assistance Policies for all ODA recipient countries, (ii) convening the Development Project Accountability Committee, (iii) setting impact indicators for each project, and (iv) strengthening the evaluation mechanism.
For more effective and efficient ODA operation, it is essential to strengthen the PDCA cycle not only at the project level but also at the policy level. To this end, MOFA carries out evaluations of economic cooperation policies in line with the “Government Policy Evaluations Act (GPEA).”Note 17 It commissions evaluations to third parties in order to ensure objectivity and fairness. The recommendations and lessons learned from these evaluations are fed back to ODA policy for further improvements in ODA management.Note 18
The ODA evaluations by third parties are implemented both from the “development viewpoints,” which concern whether ODA is contributing to the recipient country’s development, and from the “diplomatic viewpoints,” which determine what desired impacts ODA has on Japan’s national interests.
Evaluations from the “development viewpoints” are carried out against three evaluation criteria; how the ODA policies are aligned with Japan’s high-level policies, global priorities, and local needs of the recipient country (Relevance of Policies); how much impact ODA has delivered (Effectiveness of Results); and what processes have been taken to ensure ODA’s Relevance of Policies and Effectiveness of Results (Appropriateness of Processes). Evaluations from the “diplomatic viewpoints” are conducted against two criteria: how ODA is expected to contribute to Japan’s national interest (Diplomatic Importance) and how ODA has contributed to the realization of Japan’s national interest (Diplomatic Impact).
In addition, following the recommendations from the “Review of Japan’s ODA Evaluations from FY2015 to FY2021,” conducted in FY2022, MOFA strengthens ODA evaluations in line with the priority policies, approaches, and implementation principles of the Development Cooperation Charter.
MOFA publishes the evaluation results on its websiteNote 19 to ensure accountability to the Japanese public while promoting public understanding and support for ODA through increasing transparency.
At the project level, JICA mainly carries out evaluation by modalities - grant aid, loan aid, and technical cooperation - as well as by the theme field. Having established a coherent evaluation mechanism for each modality, JICA conducts evaluations for each project ex-ante, mid-term, and ex-post. As for projects whose cost exceeds a certain threshold, JICA commissions third-party ex-post evaluations. JICA also invests in impact evaluationsNote 20 in recognition of the importance of quantitatively examining projects.
MOFA and JICA conduct ODA evaluations primarily based on the Evaluation Criteria of the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD).Note 21
- Note 15: Country Assistance Policy and Rolling Plan for Respective Countries https://www.mofa.go.jp/policy/oda/assistance/country2.html
- Note 16: Sectoral Development Policy https://www.mofa.go.jp/policy/oda/sector/index.html
- Note 17: Other than at the policy level, ex-ante evaluations are conducted on loan aid projects in which the maximum amount of loan offered through an Exchange of Notes (E/N) is 15 billion yen or more and on grant aid projects in which the maximum amount of aid offered through an E/N is 1 billion yen or more. In addition, ex-post evaluations are conducted on “pending projects” and “incomplete projects.” (“Pending projects” are projects for which the loan agreement has not been signed or loan disbursement has not begun after five years have elapsed following the decision to implement the project, etc. “Incomplete projects” are projects for which loan disbursements have not been completed after 10 years have elapsed following the decision to implement the project, etc.)
- Note 18: Since FY2017, in addition to policy-level ODA evaluations, grant aid projects in which the maximum amount of aid offered through an E/N is 1 billion yen or more are subject to third party evaluations while the project in which the aid amount falls between 200 million yen and 1 billion yen are internally evaluated. Japan strives to ensure that the results of these ex-post evaluations are utilized to improve the formation of ODA projects in the future.
- Note 19: ODA Evaluation https://www.mofa.go.jp/policy/oda/evaluation/index.html
- Note 20: Evaluation method verifying the effects of development projects by using methods from statistics and econometrics.
- Note 21: DAC evaluation criteria: In December 2019, coherence was added to the criteria of relevance, effectiveness, efficiency, impact, and sustainability that had been in use since 1991.