Comments

Thanks Robin. A useful contribution. In my tell-tale “pithy” style, I’d like to offer a short observation. Giving Enterprise Challenge Funds a Chance. Youthful. Promising. Almost there. Really? If we’re to look forward to a glass half full, we should at least be clear that when looking back the glass wasn’t actually half empty. So let’s look back briefly… Looking back a little, the ECF hangs almost entirely off its face saving mobile banking project (WING Cambodia). Evidently, this one project (of 23) accounts for 93% of total ECF beneficiaries reached, and 78% of the net income generated. Strip it out and the cupboard is almost bare. Looking back a little further, according to a recent DFID report (“Meeting the challenge: How can enterprise challenge funds be made to work better”, April 2014) at least GBP 850mn has been invested in challenge funds over recent years. AusAID should be praised for subjecting the ECF to a CBA assessment, as none of these funds have come under anything like a similar level of scrutiny. But then again, why should they when they too can hang off their face saving mobile banking project (M-PESA)?! Looking back even further, again according to the above mentioned DFID report, challenge funds can be traced back in the UK to 1714, and the Longitude Prize. How did this perform? Well, none of the major prizes were ever awarded. John Harrison, the esteemed clock maker, cracked the challenge of measuring longitude with his sea clock, then marine watch. He did this through his, and other private investment and endeavour. He was finally awarded £10k by the British Government 50 years later in 1764, when at the ripe old age of 71 his best work was behind him. Innovation? Additionality? Leverage? Really? Youthful. Promising. Almost there. Isn’t 300 years long enough for researchers to learn something of value Robin? John Harrison’s marine watch allowed sailors to find their way through the maritime mists. Who’s finally going to step up and help the development sector navigate their way through the deep layers of Challenge Fund Fog?

Hi Michelle, Thank you that is a very good point, or actually two good points in one.. 1. On regular attendees of religious practice. Our data are census data and just tell us the proportion of the population who describe themselves as religious (or Christian - which we ran as an alternate model, getting the same results). As we discuss in the paper, the data give us nothing about frequency of attendance. And it is possible that patterns for regular attendance and associated giving might be different than those we see for people who are just nominally religious. Indeed, one oversees study has findings which suggest this is the case. 2. On the second point, about missing NGOs, we cover this a bit in the paper. It's true that Compassion aren't in the dataset, but nor are MSF, an equally large secular NGO. And we know that the NGOs in the dataset comprise a very large share of aid NGOs in Australia. And these facts, along with the fact we see the same negative correlation in surveyed support for government aid, suggest the finding is real. Although -- for both of the reasons just discussed -- I am very keen to test it using different data. Something we hope to do. Thanks again. Terence

Useful summation and discussion - thanks. On the matter of religiosity and ODA giving, it's also possible that those who are regular service attendees give quite generously, but to NGOs that are not ACFID members and thus are not captured in your raw data. I'm thinking particularly of Compassion which - from my vague recollection (I know someone will correct me if I'm wrong) - is not an ACFID member because it chooses to use its work as a platform for proselytising... but, if included among the usual size and income rankings of NGOs, would be among the top few NGOs in the country. Look forward to your further work on this topic.

Thank you very much for this discussion Robin. It is good to see this research debate and discussion in the field of challenge funds. It is important to consider the expected outcomes in advance for challenge funds and working in private sector development in general. Does the program intend to use the business as a vehicle to achieve development outcomes (such as innovative new products or to link to a particular supply chain) or to change the business to achieve these means? The ECF was a pilot program which means that the objective was intentionally broad in order to feed into discussions like this around what works best and in what context. Importantly, DFAT provided additional resources for strong monitoring, research and external evaluation – these are all available on the ECF website (www.enterprisechallengefund.org). The ECF ran in both Pacific and South East Asia – two very different regions demographically, economically and with very different in business environments – and the results were similarly differentiated. In the Pacific, the fund worked with more small-medium businesses. There were fewer larger businesses and the development outreach (also called employees, suppliers or customers by the companies) was smaller. Interestingly, the quality of outreach (the dollars that the beneficiaries earned) was higher. This approach was more consistent with an ‘enterprise development’ objective. In Asia, there was a much larger pool of businesses to work, larger populations of beneficiaries and it was easier to have a “business modification” objective in this environment. An independent review found that a future challenge fund would work well in Asia – and potentially it could be used to incentivise companies to expand into more remote areas; innovate new products for the poor and could potentially go some way to address growing inequality. This also raises a final point that it is important to consider the approach and the context not just at the design but during implementation. In smaller markets, operating a fund targeting only larger companies with a ‘business modification’ objective may quickly reduce the pool of eligible companies to work with – and as it progresses, the fund may need to consider either pulling out or changing objective to work with smaller firms.

Thank you Paul for your comment. Yes, in the words of Machiavelli 'the ends justify the means'. I see this as a challenge for PNG political thinkers to do more research in order to find a workable design capturing the vital elements of both traditional and contemporary political systems.

Thanks Terence for drawing attention to Nancy Qian's paper. It is bemusing that only when an economist makes an argument that adding up aid flows and expecting to draw global evidence of impact is flawed, there is a possibility of 'progress'. But its great that she makes the argument and anyone with experience 'in the field' is likely to agree. My book 'Capacity Across Cultures: Global Lessons from Pacific Experiences' highlights the relevance of diverse cultural values for aid work and thus for impact on poverty or any other developmental result. Cultural values influence perceptions of change, leadership, development, results and many other fundamental elements in the world of aid and development. The manifestation of these values differs in every context so that what works in one, is not likely to work in another. When added to the complexity and diversity of donor motivations mentioned by Qian (commercial and geopolitical), its not surprising that macro-level analysis is thus likely to be relatively meaningless. I'd like to propose that we save money on over-researching macro-economic impact of aid flows and put it into contributing to long-term, respectful, collaborative and learning-focused partnerships on the ground, because we know these are what really make a difference. When there are shared values among people focused on shared objectives, backed up with decent resources, its more likely there will be sensible ways of achieving improvements in development prospects.

In line with Joel's comment regarding the usefulness of regional breakdowns, readers may also be interested in the latest MDG Tracking Report for the Pacific region: http://www.forumsec.org/resources/uploads/attachments/documents/2014_Pacific_Regional_MDGs_Tracking_Report.pdf It is fairly clear in its assessment of progress: "Forum island country progress toward achieving the MDGs remains largely unchanged from the status reported in 2013. Only Cook Islands and Niue are on track to achieve all the MDGs, while Palau, Fiji and Tonga are on track to achieve at least four or more of the MDGs. Samoa and Tuvalu are on track to achieve three of the MDGs, with the Republic of Marshall Islands (RMI), Nauru and Vanuatu on track to achieve two of the MDGs. Federated States of Micronesia (FSM) is likely to achieve only one of the MDGs, while Kiribati, Solomon Islands and Papua New Guinea (PNG) are not on track to achieve any of the seven MDGs. With around 500 days left to the 2015 deadline, there is a relatively slim chance that the region’s progress next year will be any different. Even though some countries are continuing with MDG acceleration strategies, it is unlikely that these efforts will be reflected in the data by 2015".

Hi Bernard, your point is well made and could be summed up as: 'The end justifies the means'. Peter O'Neill has been determined to have a 'government of national unity' ever since as Opposition Leader he was prepared to join Michael Somare in much the same manner as now except with Somare as leader. The essence of difference between a democracy and a dictatorship has become somewhat blurred in many places. The real difference is how any government performs and then can be held accountable for their responsibilities. Has PNG been better off under this form of government? Has there been less corruption or more? Are many of the PNG political leaders now more accountable and do they do what the voters want? Do the voters have real choices and alternatives that are supposed to happen in a modern pluralistic society? If the answer is 'No!' then there's your answer. You only have to look at the traditional PNG village to see where many PNG's political leaders grew up and get their inspiration from. That's where they are comfortable and so want to recreate that harmony of purpose instead of sustained argument and confrontation that the Westminster system promotes. The real issue is one of design. The concept of a village council in PNG has worked well where everyone knows everyone and can see what is happening and can hold their Councillors individually responsible. They live among their own people and can easily accessed and challenged. This village paradigm demonstrably can't work when the people lose contact with their elected leaders and only see them every five years at election times or when they come back to hand out 'government' money or equipment. This form of government does however allow, when the opportunity presents itself, for personal gain at the expense of others. It also allows for the personal distribution of government funds and largesse as per the culture of the 'bikman'. You should judge a person (read political leader, system or government) on what they do, not what they say.

Thanks to Grant and Paul for their thoughts on my comment. Paul the utility of my recommendations because he says (no doubt correctly) that it is highly unlikely that PNG would prosecute its nationals for stealing Australian aid money. He thus suggested other ways Australia could sanction those who corrupt its aid projects. Australia should prosecute PNG nationals in its courts for stealing Australian aid monies. I would be surprised if Australian law does not permit such prosecutions, and if it does not, I would add a fifth recommendation to those in my initial comment: amend the Australian criminal code to allow it. Of the measures Paul suggests instead of prosecution, three should be added to mine -- deny those who corrupt an assistance project from: 1) buying Australian assets with the proceeds of corruption (which may already be the case under Australia’s Proceeds of Crime Act) and 2) visiting Australia (the U.S. has refused to issue visas to corrupt foreign officials since 2004), and 3) publicly humiliate them by widely publicizing their wrongdoing. Grant says that while my recommendations were “important first steps . . . . addressing corruption in an aid program doesn’t root out corruption per se.” It is critical to address the larger issues in PNG, he notes, because thanks to a growing economic boom fueled by the exploitation of its resources. Australian influence over PNG will diminish sharply in the coming years as revenues from resources outstrip aid dollars. Grant fears that the PNG is about to catch a serious case of the resource curse, enriching elites while leaving the rest of PNG’s citizens no better off than they are now. “What role,” he asks, “can Australia play to help ensure that this [resource] largess gets through the government system to benefit the grassroots, rather than being siphoned off by elites?” My response is twofold: One, don’t underestimate the spillover effects from rooting corruption out of aid programs. A vigorous anticorruption program will not only set a salutary example of what can be achieved but will require training and employing hundreds of accountants, auditors, and other corruption prevention and enforcement personnel. Their skills can later be put to use by the Ombudsman, Auditor General, and other PNG agencies to arrest abuses generated by the resource boom. Two, be realistic. The cure for the resource curse lies primarily with PNG citizens and the strength of their governing institutions. But Australia can certainly help. Aid dollars should be targeted on strengthening the critical institutions of governance, and if this money is actually spent for the purposes intended, rather than siphoned off into corrupt officials’ pockets (another reason anticorruption controls on aid dollars is critical), it can make an important contribution to institution building. PNG’s Ombudsman and Auditor General have made enormous strides in recent years thanks in no small part to Australian support and the justice sector SWAP is beginning to pay dividends. This reply to Grant and Paul appears in a longer form that explains the context on GAB: The Global Anticorruption Blog. I hope the cross-fertilization enriches the discussion on both blogs through.

Bal, China has proved that the alternative can work. I concur with Minister Marape and Governor Parkop. Sometimes we need to think outside the box in order to find a way forward. Enough of looking at the world with a Western lens. The "A vibrant Opposition is critical for PNG" statement is Politics 101. China has shown the world that a one-party State can transform a nation. That does not mean that there is no opposition in China. The Communist party has factions namely; the Princelings (decedents of the Revolutionaries), the Tuanpai (members of the Chinese Communist Youth League), the Shanghai gang (followers of Jiang Zemin) and the Tsinghua Clique (Tsunghua graduates). Xi Jingping is from the Princeling faction while Li Keqiang is from the Tuanpai faction. In US foreign policy decision making, you have the Kissinger and Brzezinski factions. Both Harvard scholars have created schools of thought that are followed by their students. The various factions pursue the principles that are fundamental to their view. Thus they do disagree with each other. Likewise, the various parties in the PNG government can form factions within government to influence decision making. My point is factional politics can maintain the balance in the absence of an opposition. So my answer to the question is yes PNG can survive without an opposition but that will require major constitutional amendments and reforms. But then again, are the parliamentarians serious in pursuing this path or is this trend reflective of the forces at play in this particular term of parliament?

Hi Del, Ron Duncan actually raised the same point when I delivered my findings at the 2014 Pacific Update. Unfortunately this can't be captured in census data, but would be an excellent topic for future (possibly survey based) research. Jonathan

What about the cultural factor, for instance the melanesian culture is quite distinct from the polynesian, melanesians have the tendency to return to their country after living abroad for a number of years, this might influence the pattern of migration