Comments

Garth -- I imagine you're familiar with <a href="http://www.nyudri.org/wp-content/uploads/2011/10/driwp37.pdf" rel="nofollow">this </a> 2008 paper by Bill Easterly and Tobias Pfutze, 'Where Does the Money Go? Best and Worst Practices in Foreign Aid'. Perhaps it's not quite the kind of nitty-gritty, comprehensive analysis you had in mind but it's an interesting, if sometimes contentious, read. It concludes that, while the available data are terrible, they 'tend to confirm a number of long-standing complaints about foreign aid', including that 'the aid effort is remarkably splintered into many small efforts across all dimensions—number of donors giving aid, number of countries receiving aid from each donor, and number of sectors in which each donor operates'. In addition, 'a lot of aid still goes to corrupt and autocratic countries and to countries other than those with the lowest incomes'. And 'aid tying, the use of food aid-in-kind, and the heavy use of technical assistance persist in many aid agencies, despite decades of complaints about these channels being ineffective'. Not to mention that 'some agencies have remarkably high overhead costs'.

Cash transfers start with one clear advantage over many other types of aid - at least the money (or most of it) goes to the developing country and not to people from wealthy countries. I have never found a comprehensive analysis of where global aid dollars get spent - does anyone know of one?

Hi Tony, Stephen, and Ashlee. I agree there's a tricky balance to be struck. My essentially bureaucratic instincts and experience lean toward pressing others (interlocutors!) to meet any mutual obligations with as little fuss as possible. I'd accept that only ever focusing on preserving relationships in pursuit of outcomes while totally disregarding behavior and intent (to the extent that’s fathomable) could lead to rationalizing the indefensible or the sort of perverse incentives you’re concerned about—one occasionally needs to jump up and down. My argument for not doing so in these four cases partly rests on an assessment—admittedly unscientific—that Peter O’Neill’s single-minded, unsentimental, focus on the national interest is good for Papua New Guinea and good for Australia’s partnership with PNG. His willingness to go along with helping PM Rudd from last July and later Mr Abbott seems to me a case in point. I’d no more choose the four paths O’Neill has than you would, Stephen, but PNG’s voters haven’t, in their wisdom, asked me to divine their national interest. I’m sympathetic to O’Neill being a person in a hurry given all he wants to achieve and the pressures stacked against him. I also think Jenny Hayward-Jones makes an important point in Friday’s Interpreter about O’Neill’s credo of giving all Papua New Guineans a stake in the resources boom. And although I’m worried PNG may abandon its sovereign wealth fund, I’m conscious even rich Australia found it irresistible to return much windfall resource rent straight to the public in the form of tax-cuts and middle class welfare (though we’ve preserved our own Future Fund). PNG’s investment of current and future revenue in social and physical infrastructure to try to prime the economy seems riskier, and possibly misconceived, but understandable. I think you’re right to be concerned that entangling PNG in our asylum-seeker issue has the potential to distort the relationship or harm public opinion. And as costs to O’Neill for helping us rise, there’s a risk it could distract him from other priorities. But the introduction of this element seems to me to have done the relationship as much good as harm so far. The press conference you mention is preoccupied with Manus but there’s a journalists-will-be-journalists aspect to that: they fixate on MH-370 too. Every reader will have a slightly different take on Canberra’s wisdom and rectitude in asking Port Moresby to help with this difficult and contentious issue, according to their judgment, conscience, and views on off-shore processing. I’m hopeful PNG will be able to maximize the advantages and minimize the risks of assisting.

Very interesting post Karl on a fascinating area for discussion. But I can't help but feel that mutually assured destruction is already happening. Not for the respective Prime Ministers or their governments. But for the people locked up on Manus whose already tattered lives are further damaged. For the PNGans who can't access the drugs they need at health clinics. For the young people in PNG whose chance at leapfrogging out of poverty on the back of a carefully managed resource boom is being shot by relegating robust bilateral discussion of the serious public policy issues that affect their lives and futures to whispers behind closed doors (or perhaps to silence). Even on the person to person level of calling on a mate to help out, I think there's a difference between asking someone to help you move house or asking them to help you bury a body. With Manus, PNG is helping Australia to do something that is very questionable from both a policy and moral standpoint. So how can Australia criticise next time the PNG government wants to make a questionable decision that is going to impact on the most vulnerable in its society? How can Australia criticise the next time PNG wants to formulate a policy based on convenience or political expediency that breaches the obligations that the government has to its people or its obligations under international agreements? Australia is not only giving up its leverage, but also any credibility it has when calling on other governments in the region to do the right thing. I don't think we can disregard the nature of the favours in considering the impact on the PNG-Australia relationship. I agree with you that there may now be more ballast to keep the relationship on an even keel during squabbles, but if the squabbles don't consider the human costs of policy decisions nor carve pathways for positive reform, does it matter?

Karl, It's great to get your contribution, but I would invite you to read the transcript of one of the Abbott-O'Neill press conferences <a href="https://www.pm.gov.au/media/2014-03-21/joint-press-conference-port-moresby-papua-new-guinea" rel="nofollow">here</a>. It is totally dominated by Manus Island and asylum seekers. Do you really think this is good for PNG? Whatever leverage we have over PNG (and we do still have some; for example, as Abbott mentions, PNG is hosting APEC in 2018 and will need lots of help from Australia to do that) we should be using to promote good policy in PNG, not to get what we want in relation to asylum seekers.

Dear Roy, Thank you for your comment. I have placed an update in the post directing readers to it. Terence

Let's Set the Record Straight: This story was first reported by The Guardian newspaper in the UK, who merely repeated the allegations made in the film. Once it was brought to their attention that their story was wrong, and after their own investigation, The Guardian <a href="http://www.theguardian.com/theguardian/2013/dec/12/corrections-and-clarifications" rel="nofollow">published</a> an apology to Operation Blessing and made a substantial donation for relief efforts..."Operation Blessing - An Apology: In an article entitled "Mission Congo: how Pat Robertson raised millions on the back of a non-existent aid project" we claimed that Pat Robertson ran an almost non-existent aid effort in Zaire, now the Democratic Republic of Congo. Operation Blessing actually sent six medical relief teams to Zaire, between July and December 1994, and arranged for 66,000lb of medicines and supplies to arrive in Goma on an aircraft it chartered from Amsterdam. In addition, the article referred to a report by the Virginia Office of Consumer Affairs (OCA) without making clear that there was a further report by the Attorney General's Office (AGO) which found no evidence of wrongdoing by Operation Blessing or Pat Robertson and no evidence of intent to defraud. Operation Blessing has asked us to make clear that the report was signed off by four individuals at the AGO, none of whom received any donation from Pat Robertson or Operation Blessing. The article claimed a school and farm set up by Operation Blessing in Dumi had failed. We have been informed that the school is thriving and the farm remains operational to this day. We are happy to clarify the position and apologise to Operation Blessing. We have agreed to make a contribution to Operation Blessing to be used in its relief efforts for victims of the typhoon in the Philippines."

Karl, A fun read and great contribution to the blog! I'm sure the quality of diplomatic cables has declined since you've been out of the system. While I agree that M.A.D can add to political stability I also think that it can lead to political entrenchment - a brand new hospital or four-lane highway paid for by Australia lessens the likelihood that constituents in PNG hold their MP to account. From a strategic perspective I think the issue is not whether Australia jumps up and down to push a point but whether it pulls the support that helps keep MPs that have contributed to PNG's woeful development record in a job. I have heard Julie Bishop mention the phrase "mutual obligation of partner governments" a few times. Hopefully these obligations are about partner governments pursuing good public policy in their own country and not just being there for Australia when we need help dealing with our domestic problems.

This is a very timely article on this increasing trend to fast-track the participation of the private sector in "aid" delivery or development. First of all, let me make it clear that I have nothing against the role of the private sector in development. I find this interesting for many reasons. I was just teaching a module on international cooperation for students in Cali Colombia who are doing a specialization on Public-Private Partnerships. We are a few miles away from the reach of Australia's priorities but Colombia's economic growth is also focused on the extractive industries and the increasing role of the private sector in development. There are human rights violations coming from all over the place but little is done to correct the situation.....some court hearings....some financial compensation but the laws are hard to apply when it comes to the legal system's ability to apply outside of their own jurisdiction. I think that the work that is being done in Bangladesh after the accident that killed a group of workers hired by Loblaws (a Canadian company) should also be used during the inquiry...there are good examples of why many companies still refused to sign the accord on Human Rights...not that they don't believe in human rights...but it just exposes them to more legal pursuit. It's also interesting to note that the three countries that are generating the most wealth in Latin America...are home to 60% of the poverty for the whole region -- that should take care of the first assumption in the Terms of Reference. The counter argument would be -- well things would be worse without the private sector. (But maybe there is another way to stimulate growth and respect human rights). There is no mention of John Ruggie's Guiding Principles on Business and Human Rights. This would be a good place to start for the inquiry. Developing countries are still having difficulties making sense of what the 26 OECD donors are doing when it comes to impact....how do we expect them to make sense of this hyper-individual approach to development? Growth normally comes from a local approach to development; there are no cookie cutter approaches to development. I also think that the Inquiry should look at the Open Private Sector work of the World Bank. Once these tools are in place...maybe there will be a fair chance to measure impact. Clearly....there are no risks for Australian's private sector to go abroad and definitely no long term commitment outside of their ability to remain profitable....if there are any signs of economic slowdown, it's not hard for a foreign company to close its doors and let the communities deal with their needs. Maybe Australia could help developing countries implement strong disclosure on lobbying activities by foreign companies. I could probably write the final report before the inquiry starts but maybe I am wrong and we will see something exciting, innovative and thought-provoking come out of this! Keeping my fingers crossed here!

The inquiry into the role of the private sector in development is an important step to ensuring accountability and transparency. This will unearth the reality of private sector impact in the Indo-Pacific region, and inform government policy directions. This process could also be an entry point for other countries to learn from. Lessons from this inquiry could be relevant for Africa, where several non-governmental organizations use donor funds in the name of poverty reduction in poor African communities. More often than not, the non-governmental organizations in Africa are left on their own to manage donor resources leaving out national governments. Overhead and administrative costs sometimes far outweigh the actual funds put in development projects among beneficiaries; hence development workers get richer at the expense of poor communities rather than alleviating poverty -- the purpose for which donor countries use their taxpayers' monies. Though it is not a bad concept to allow non-governmental organizations and private sector directly to implement projects in poor communities, it is important to ensure that such interventions are aligned with host governments' key priorities such that private sector interventions are targeted in areas where government has less comparative advantage to invest. Although this inquiry is happening in the Indo-Pacific region, its outcomes could be very important as lessons learned for other regions like Africa, hence the need to share such outcomes at the end of the inquiry.

As an update to the post, over a recent holiday I read (most of) George Scialabba's book of essay reviews, the Modern Predicament (http://www.amazon.com/The-Modern-Predicament-George-Scialabba/dp/0983197563). If anyone is after a truly nuanced and informed critique of modernity this book is it. It isn't development studies -- but it is a very impressive set of literary essays examining what modernity has and has not delivered. Very highly recommended.

Interesting that Colin sees the 'project-based' funding as a key handicap for SPC, undermining as it does longer-term and strategic planning, and the maintenance of staff/expertise. As I have said elsewhere: It seems to me that the work of the SPC ameliorating biosecurity-related market access issues for Pacific island produce is a regional public good that should be supported on an ongoing basis. On the face of it, pooling the highly specialised expertise needed to help island states maintain compliance with quarantine measures in destination markets (in areas such as entomology and plant pathology for example) makes sense. Providing 'core funding' for SPC to provide this service should have widespread and lasting development benefits across the region.