Comments

Thanks Frank I’ll be in contact to get a copy of the policy as it isn’t available on any websites. There appears to be general agreement that the SME sector is important for more inclusive growth in PNG – and I certainly share that view. The leadership challenge is putting that objective into practice – both in policy formulation as well as implementation. Unfortunately, the new policy sounds as if it may be quite close to the scheme <a href="http://www.businessadvantagepng.com/return-of-png-government-sme-scheme-encourages-business-development/" rel="nofollow">described by Minister Maru</a> early in 2015 which the Prime Minister subsequently described as “unfortunate” – so it would be good to get more details. The <a href="http://www.adbpsdi.org/2013/11/getting-settings-right-on-sme-policy-in_11.html" rel="nofollow">ADB’s work on SME policy</a> suggests that broad business policy settings are vital – making it easy to start up and run a small business; creating an environment in which successful businesses are able to grow; and supporting the development of human capital through education and training. “Special policies can have unintended consequences and can ultimately undermine the broader objectives of social and economic development.” I hope that relevant organisations in PNG can make clear to the government the likely consequences of any policy based primarily on taking over existing businesses rather than growing new ones (as implied by your comment). There will be an active debate on the issues – this <a href="http://asopa.typepad.com/asopa_people/2015/02/we-must-ensure-that-protecting-small-business-will-deliver.html" rel="nofollow">Crocodile Prize entry</a> and subsequent discussion indicates some of the passion and issues. When reading the media reports of the policy, I was gobsmacked by the objective of creating 500,000 SMEs by 2030. This sounds great but appears based on some very, very optimistic modelling. PNG’s business community should ask for such models to be peer reviewed. My experience is that “money tree” models lead to poor policy decisions. A distinction between the informal sector and the SME sector may also be important in any revisions to the 1992 IPA Act. Pending getting more details, it is not clear from media reports that there has been the necessary hard headed analysis of what actually delivers on the goal of improving well-being for the citizens of PNG. There is much to be learnt from PNG’s own experience with the “reserve list”, on its experience with failed forms of protectionism especially on “infant industry” arguments, and learning from other Asian nations of what actually stimulated inclusive growth. I’ll also be interested to see if the policy talks about removing the foreign exchange restrictions and addressing the over-valued Kina which are hindering the opportunities for PNG’s small businesses to export. Cheers. Paul. PS I'll pass on the Zimbabwe comment. The Australian Financial Review headlines last month got me into trouble. Time will tell. But the SME policy, as well as the recent agriculture policy, seem to be more “muddling down” rather than “muddling through”.

Thanks Jo. My inclination is that it's norm confirming not competition. (Would people really sacrifice their taxes just to say they were better than the British?) That said more research would be great for fleshing out the picture.

Your title suggests you think the UK example has impact because of global norms and the idea of being a good global citizen. I'd like to think this, but wonder if experiment three simply highlights a desire to compete and be better than other countries, rather than any commitment to a global norm. (Although, arguably, it could be competition over achieving the global norm.) I'll be interested to see what further inquiry shows. What it does highlight is how little we really know about how publics approach these issues of global citizenry, and what are the key factors driving or influencing their thinking.

Dear Paul, Last Friday Minister Richard Maru and the Prime Minister issued a new SME Policy aimed at making 70% of the companies nationally owned through the required sale of these companies to PNG Nationals. This is probably the most devastating policy we have ever witnessed. All companies with less than 200 employees, K20M in investments, or K15M in Sales are aimed for confiscation. I say confiscation as if we have several thousand companies for sale with the only purchasers| PNG Nationals the price may tumble to 5-6% of book value. Once taken over where is the technical experience to run these companies|? It would appear that we are on a path of Zimbabwe. All is worthwhile of your investigation and printing of a new blog.

Thanks Garth, You've made a couple of very good points. On survey mode (the second point): you are correct that the populations that online survey companies sample from are potentially atypical in unobservable ways (i.e. ways that cannot be treated by weighting). That said, (a) online surveys don't involve self-selection, but use random sampling from a large 'population' of willing participants, which is not nearly as bad as samples constructed simply by self-selection. (b) of course, the population may still be atypical in some unobserved sense. (c) but this is only an issue for experiments if the unobservable difference is something that interacts with the treatment effect. (So not just the fact that participants in online surveys are different from Australians in general, but that they're different in the extent to which they respond to treatment effects.) This is fairly unlikely. (d) also, the regression analysis we've run using online data has produced very similar results to that we've run using data from the ANU poll (which is phone based). (e) there's a recognised issue with face to face surveys (covered by an English team of researchers in the aid conference) in so much as that respondents may give answers biased by their desire to seem nice to the person sitting across the other side of the room interviewing them (social desirability bias). So your concern here is a technically correct, and definitely worth considering. But I don't think it's too much of an issue for our work at present. That said, we are planning to place a suite of (non-experimental) questions in the AuSSA, which is a gold-standard Australian postal poll. This will give us separate data from a different survey mode. Which will be a good check. On your first point--once again it is a good point. There are limits to what we can do here because we have finite amounts of funding. However, that said we are going to try and conduct some experiments where respondents are presented with a richer, less artificial, suite of information before answering questions. Good points, and thanks again for engaging on this. Terence

It's great to see a methodical approach to these questions Terence. Can I suggest as well as testing other additional information in the questions (eg information about what aid has achieved) that Devpolicy also compares results from one-off questions in general surveys with questions in dedicated surveys on aid where a respondent has time to give more thought to the question of aid through a range of aid related questions. I would also test online polling against telephone or in person polling. These online polling panels often receive payment for participating in surveys which may influence participation and results despite sample weighting corrections.

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Hi Deniss, Contact me on email.

Thanks, That's a great question. We chose to look at aid volume-related questions because, as mentioned in the post, other research suggested that over-estimation of volumes was associated with lower support for aid. Seeking to know if we could correct this gave us question 1. From there is made sense to work following a theme and to add two different frames of reference (the past, and someone else). The UK comparison didn't give us a groundswell but it has afforded an interesting insight into how volume related information works. I totally agree there are other types of information we should experiment with. We are hoping to do this later this year. Thanks again for a very good question. Terence

Thanks John and David. Having also worked in the PNG Dept of Finance from 1988 to 1991, and again from 2001 to 2003, it was interesting (and disappointing) to get this update on the state of PFM. But I do think we are expecting too much from a single instrument like the PEFA. Political economy issues are clearly a major and binding constraint for PNG, and the PEFA is simply not designed to diagnose these let alone suggest how to address them. I have found this in various African and Pacific Island ministries of finance that I have been able work in over extended periods. In only a couple of cases (Tanzania and Samoa) could I clearly see progress, and in both these cases there was strong and sustained political ownership over a long period from both a President or Prime Minister, together with consistent engagement from committed DPs in the PFM space. Civil servants in MoF's can subtly detect the difference in political rhetoric that is intended just for DP consumption, and when it is a serious statement of intent from their political masters - and they behave and respond to PFM reform accordingly.

Hi Terence Thanks for this interesting insight. It's great that you can compare three different methods and see the response to each. Unique opportunity. I'm curious as to how you picked the 3 different methods to explain why Australia isn't giving enough aid. It seems to me that they are all numbers based arguments. They also don't explain to the public what aid actually is, or how it helps. Even the most successful of the 3 options only had about 23% of people thinking that Australia doesn't give enough aid. Sure, that's a big change from the control group, but hardly enough for a campaigner to feel like we're creating a groundswell of support. How did you come to the 3 different wordings that you provided? Thanks heaps.

I don’t follow the political landscape of Nauru, Marshall Islands and Solomon Islands to have an opinion on their political leadership. However for PNG, I beg to differ. A change of portfolio is not a political upheaval. In fact, it’s a commitment to pairing the right skills set and strength to a particular role. We do that in business all the time. It’s called business alignment. With all due respect to Dr Transform Aqorau, PNG has enjoyed stability in Government for the past 2 terms with Prime Minister Peter O’Neill at the helm. We have seen the greatest infrastructure development in this period than in the 20 years prior. True, the distribution of wealth still needs to trickle down to the rural remote communities where the majority of the population reside but in a country with 800+ different languages, as many tribes and cultural backdrops against a challenging landscape, you can’t sit in Australia’s political glass house and throw rocks at PNG. Afterall, is Australia not in the Pacific? Why too was Fiji not included. The write-up is on political intrigues in the Pacific is it not? Kind Regards, Beatrice Mahuru