The foreign aid program began in the 1960s out of the reparations payments Japan was obliged to pay to other Asian countries for war damage.
The program's budget remained quite low until the late 1970s, when Japan came under increasing pressure from other industrial countries to play a larger role.
These measures were generally welcomed abroad, although some countries felt that the steps taken were not executed as rapidly or were not as extensive as similar efforts by some other advanced industrialized nations.
Japan's share of total disbursements from major aid donors also grew significantly, from nearly 11.8% in 1979 to about 15% in the mid-1980s, and later to more than 19% in 1989 dropping back to under 17% in 1990.
In 1990, Japan also pledged large amounts of assistance to Eastern Europe, but most of that aid was to be in the form of market rate credits and investment insurance, which did not qualify as ODA.
Nevertheless, by 1987 Japan had become the largest bilateral donor in twenty-nine countries, nearly double the number in which that had been the case ten years earlier.
Japan's foreign aid program has been criticized for better serving the interests of Japanese corporations than those of developing countries.
Bilateral assistance was concentrated in the developing countries of Asia, although modest moves took place in the 1980s to expand the geographical scope of aid.
These large aid amounts made Japan the largest single source of development assistance for most Asian countries.
For the Association of Southeast Asian Nations (ASEAN) countries, for example, Japan supplied 55% of net ODA received in 1987, compared with 11% from the United States and only 10% from the multilateral aid agencies.
Within the category of social infrastructure, education absorbed 6.7% of the bilateral aid in 1990, water supply and sanitation made up 3.4%, and only 2% went for health.