Comments

Did you people read the same story that I did? Are you intentionally being obtuse to defend the place where you work (but have the luxury to eventually leave). Carmen wrote: "We have received a range of security devices that we carry around and keep in the car, we have adjusted our driving style, we use an armed escort for trips in the dark or into unknown areas, and we do not walk in public areas. In addition, we avoid certain areas within Port Moresby altogether and on the few occasions that we have travelled out of town, we have done so in a convoy of many cars. Our house also has several security features, in addition to its location in a secure compound." This sounds like an absolute nightmare and to compare this situation to ANYTHING encountered in the U.S. or Australia, as many of you did, is intellectually and otherwise dishonest.

Grant’s challenge is an important one. It cuts both ways, of course. Politics and politicians can and do undermine project plans but equally their strong support and leadership can make profound differences to impact, dissemination and sustainability. I think Sheldon’s first point about grounding reform in local institutional cultures covers Grant’s concerns, however, completely protecting plans from politicians seems a bleak prospect - just ask an Australian about education funding, the NBN or superannuation, for example. Nevertheless, the issue Grant raises also points to both the complexity and the importance of giving thorough and very careful attention to such matters at every step in the planning and design of development support.

Hi Sheldon, It is strange that you don't mention the importance of politics and political will in this blog. So often the best laid plans of bureaucrats and aid officials are undermined by politicians. And frequently education reform is driven more by politicians than anyone else - PNG's Tuition Fee Free policy, and subsequent ban on project fees, is one example of this. This omission makes this well intentioned advice fall a little flat. Cheers, Grant

Thanks Vinny, That's a great comment. I'll be brief here because I'd already tried writing a longer reply. And my computer keeled over as I was doing it. In general I agree: reducing volatility is not the only thing we should aim for in our aid giving. If volatility is the price we pay for delivering certain types of aid, assuming the aid we're giving is the right type of aid, then it is a price worth paying if we believe the benefits of the particular type of aid we are giving outweigh the costs of volatility. I also agree we can minimise the negative effects of volatility through careful planning with recipient countries. That said, I think we would agree that unnecessary volatility is still bad. As such our central difference is, I think, that you believe the volatility seen at present is an unavoidable part of the job, while I think it could be reduced (more staff, an easier domestic climate). Also, I haven't seen evidence that, in the NZ case, the cost of reducing volatility is being reduced by good planning. (As far as I can tell the partner country planning documents are not available publicly. If they were and planning matched spending I would happily concede the point on this.) What is more, I don't think all the volatility in spending is simply a function of the fact that we're now doing more dams, roads and runways. If you look at the two charts below, you will see (via CRS, imperfect but all I have) NZ aid (current USD, calendar year) to Samoa and Kiribati that *went via the public sector*. Still a lot of variation. Obviously, one can funnel aid for large projects via partner governments, but I'm not confident this is what's going on here. <img src="https://devpolicy.org/wp-content/uploads/2016/08/Kiribati-CRS-Public-Sector.jpg" alt="" /> . <img src="https://devpolicy.org/wp-content/uploads/2016/08/Samoa-CRS-Public-Sector.jpg" alt="" /> You've done a great job of arguing that volatility is part of life for an aid programme. And I am happy to concede aid programmes should be given leeway in their annual budgets etc. Nevertheless, I still think that when an aid budget as to increase year on year by 12% if an aid programme is to have any chance of meeting its triennial budget there are probably additional issues afoot. Nevertheless, I've learnt a lot from the exchange and am very grateful for it.

Hi Jo and Terence, Thanks for the interesting response. There are obviously a bunch of things for me to think about, and I will try my best to make some time to do that quickly. Again, some (strictly) personal thoughts that in no way reflect the views of my employer. These comments are purposely terse and technical for any avoidance of doubt that this isn’t an official plain-English response 🙂 1. The process of appropriating, allocating, expending and evaluating aid well requires optimization across multiple dimensions and constraints. These include a number of complex political economy considerations. This means that the solution set of “approaches” to how to deliver aid is vast, non-linear, and not entirely dependent on any one of those dimensions or constraints. 2. In other words, if lower volatility was the only thing worth caring about, aid could take the form of a pre-committed agreement to simply “transfer” resources across to aid partners (whether they were governments, organizations or multilateral institutions). 3. I have to think about this some more, but I am in the formative stages of wanting to say that volatile aid can still be predictable if there is sufficient up-front clarity about the nature of that volatility, and strong, continuous early communication of any changes. In other words, volatility might create first-order predictability problems, but managing that volatility might offer predictability. 4. This is important because the change from red to blue was accompanied by a structural shift that involved a move within the solution space of aid approaches. That move may have coincided with a political adjustment, but ultimately involved a large tradeoff between being close to the “just make a transfer” set of solutions and somewhere else within that set which may lead to either (a) a temporary; or (b) a permanent increase in volatility. It may be temporary because this new approach involved a learning curve and fixed costs that required time for us to “settle in”. It may be permanent because the types of investments are naturally bulky, discrete, and involve large degrees of decision-making under uncertainty. My suspicion is that it may be both. 5. Given that structural shift, forcibly smoothing volatility (e.g. by “washing-up” as described in my official response), may be sub-optimal in the short-medium term. Instead, it is more important to communicate this change of approach well and manage the volatility as described in my third point. 6. If aid investments are more discrete and lumpy in this new approach, and if those discrete and lumpy investments are occuring in a challenging, uncertain, and unpredictable environment, then it might well be that we encounter deviations that appear “large” even over a shorter planning horizon. 7. It also means that the 3-year horizon becomes a more relevant base to measure spending predictability. 8. Also there is an important policy question that is missing from your commentary: while the structural shift caused increased volatility, there was a (large) levels shift which meant more aid was flowing overall to the country. How should a recipient country assess the overall impact of those two opposing forces? I’m sure there is an easy, pithy, 50-word way to say all this, but who doesn’t enjoy a verbose and inefficiently long-form comment? It’s so much more fun. Again, all unofficial, formative thoughts. But I will continue to have a think with my official hat on. Vinny

Great to know that you're going to use this in teaching, Gerard. It has been a fun and interesting exchange, and got me thinking a lot about the challenges of improving aid predictability (and reducing volatility). I think there is the potential to do much more to stimulate informed discussion about aid policy, particularly in NZ. Maybe you could also assign students to make comments on these blogs to join in the discussion? For many issues in aid policy, and public policy in general, I think the winner has to be the policy at the end of the day: the discussion is only as good as it informs efforts to improve policymaking and implementation, with the ultimate goal of improved development outcomes. These are complex issues and there are layers to their discussion. In discussions with others, I think there is still more to say on the predictability issue, such as the need for careful partner country analysis (including public financial management and absorptive capacity analysis), and how to translate this into realistic planning. It also raises the question regarding whether more money should go to multilaterals rather than bilateral relationships, etc. And it raises issues about who makes decisions about aid policy and expenditure, and how a donor country can create quality aid policy. But I've been forbidden to write any more blogs (or blog comments for that matter - oops!) until my PhD is finished, so hopefully somebody else will in the meantime.

Thanks Gerard, To be fair, Jo can dance; I'm the only one with the issue there. Great to know you'll use it as a teaching example. I'll be very interested to see what the students make of it. Not just in a who won sense, but also in terms of what the students think the impediments are to informed public v govt department debate about aid, and what might remove these. Terence

This is really cool to read at two levels. First, for the content by Jo/Terence and by Vinny reply, and the reply to that from the people-who-cant-dance. Insightful, and I enjoy trying to get my head around this. Second, so great to see constructive engagement. Almost a text book example of what dialogue can do for the *public* policy-making process. No, not almost. it actually is a textbook example. I can say that because I'm going to use this back-and-forth in the teaching of 41 postgraduate Development Studies students. Thanks!

What would happen to Solomon Islands country if RAMSI leave the country?

Thank you Pauline and John. Pauline, please do free to share links to the debate. Kind regards Terence

Hi Tess, Thanks for the good questions (and sorry about the delayed reply - for some reason the system did not notify me a comment had been left). Nationally, income inequality decreased between the 2008-09 and 2013-14 household income and expenditure surveys, after having increased between 2002-03 and 2008-09. There is a lot going on underneath those headline figures, however. Poverty has declined in rural areas, but increased in urban areas (hence the focus on squatter settlements etc). Note that this is likely to have contributed to lower inequality nationally, given that rural areas are generally poorer than urban areas. Regionally, poverty rates have declined in the West, but have increased in the Nausori-Suva corridor. So it is a mixed story overall. You can read more <a href="https://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0ahUKEwi9vIjghZ_OAhXDsJQKHYxhCL0QFggfMAA&url=http%3A%2F%2Fwww.statsfiji.gov.fj%2Fcomponent%2Fadvlisting%2F%3Fview%3Ddownload%26format%3Draw%26fileId%3D1381&usg=AFQjCNFhtnSYGHSHGqpR_-giPT-FerYwyw&sig2=xgv7FwRgYNZNqk9VOQrSnA&cad=rja" rel="nofollow">here</a> [pdf]. On the investment question – these are Reserve Bank of Fiji figures, which are not accompanied by an RBF definition. That said, the distinction would be generally understood as follows: ‘government’ includes any investment by government departments, whereas ‘public’ includes investment by state-owned enterprises. Matt

Very good analysis and response to Vinny's blog. Twenty million is definitely not small change. We put a link to Vinnys blog in the July edition of our e-newsletter Update. The August edition could include your reply.