Previous research suggests that ideology, material interests, and moral values drive citizens’ preferences over foreign aid policy. Little attention has been paid to how perceptions of the international environment affect these preferences. We examine the extent to which citizens in a traditional donor country consider donor competition when deciding whether to impose aid sanctions on governments engaged in human rights violations. Employing an information experiment conducted among Japanese adults, we find that the prospect of another donor ready to act as a substitute aid-provider reduces support for the use of aid sanctions. This effect runs most strongly through a pathway privileging security concerns, and the effect is larger among respondents who have preexisting concerns about the other donor. These results highlight the way in which public desires for foreign aid to bring about material returns can hinder a government’s ability to use aid to promote good governance ends.