Comments

Hi Paul, Thanks for an interesting comment. Just a couple of quick thoughts in response. I agree with you about the need for aid transparency and think that aid doors could do more to educate publics in recipient countries as to how much money their governments receive (I even wrote a blog post on this on this site a couple of years back.). It's more or less true that PNG would be a better place with more trade (more or less because some forms of trade - the arms trade; logging - aren't beneficial) but the trouble is the country simply isn't at a level of development where more (good) trade is an easy ask. Plausibly aid has a role to play in helping overcome this. Even if it doesn't, other than a slight possibility of Dutch Disease, there is no good reason to think that aid impedes PNG's very wobbly path towards pro-poor export industries. I'd like to see the OECD countries give more aid, but definitely agree with you that quality is of critical importance. Thanks again Terence

Thanks Dimitri, I guess the Greek case shows that conditionalities (assuming they are the right conditionalities) are another tool donors have to promote reform. However: 1. My reading of the research on aid conditionality is that it often isn't very successful in prompting reform except when the recipient is on the edge of crisis (the Greek situation). And yet unfortunately times of crisis are often the worst times to try and reform for other reasons (while there's a good case to be made for trying to trim Greece's civil service, the last thing Greece needs right now is more unemployed people. 2. Even when conditionality might be a tool which we can use to bring about high level change it probably lacks the reach to bring about low level change (to organisational culture, for example). That being said, while it's track record isn't great, and while there are limits to what it can do, it is worth mentioning as a potential tool. Thanks for raising it. Terence

Terence, a wonderful article, especially after having spent the past four months living in Bosnia where the public service in dire need of reform. What is your take on a country such as Greece, whose recent bailout packages (aid) have been conditional to it's own (painful) institutional reform? Greece seems to be the exception rather than the norm (at least in Europe) as far as the conditionality of aid is concerned. Again, thanks for a wonderful read.

Its a great chance for a great change if the president of World Bank falls to Sri Mulyani. Her integrity is undoubtable. with her personality, leaderships, knowledge/skills and experiences I believe she would be very fitting for this position. It would also importantly change the image of the World Bank.

Hi Terence, thank you for your response and I appreciate the time you have taken out of your studies. I draw on nearly 40 years experience as a former bureaucrat in a number of departments and service in areas like PNG and Cocos Is. I have endeavoured to keep up to date with events in PNG and to a lesser extent in the Pacific. The essence of the problem is I suggest, its complexity but it is also essentially one of culture. That very aspect provides a rather grey and obfuscated vision and can allow those who wish to excuse sub optimal performance, an ideal environment to escape close scrutiny and clear responsibility. In his book, 'Minnows of Triton', former AFP Assistant Commissioner John Murray expounds of his first hand experience over many years of dealing with fluid Pacific concepts of malfeasance, law and order and accountability. There is a responsibility to the Australian taxpayers to spend our overseas aid in the most expeditious and effective manner. I suggest that even if the general public are blissfully unaware of the practicalities and relevant detailed information, the accountability and responsibility of aid workers and departmental staff are in no way lessened from the standards used in Australian operations. There is one more aspect that should be actively considered in the aid equation. Whenever we supply aid and support, we provide an excuse to the government we provide aid to, to spend their revenue in other areas. This is the harsh reality and it behoves all aid programs to then be absolutely transparent and ancillary to the local programs. It is reported that some 'developing' nations elsewhere are pleased to have large numbers of very poor people as an incentive to illicit continuing aid money. As one educated PNG person said some time ago: 'We need less aid and more trade!' Are we in danger of not listening or being subject to industrial deafness? Don't get me wrong. I support Australia's aid program. I just want to see the program better perform and achieve results, not just ever increasing expenditure figures that provide an excuse for some to quote how much we are doing without ever actually working at the coal face. Best wishes with your studies, Paul

Teaching and learning improvements cannot take place without appreciating the governance issues. For example USP Suva, Fiji is wasting a lot of money provided by donar agencies including Ausaid. You really feel sad seeing that this money is not reaching to needy people; instead greedy people at top are caring and sharing through corruption.

Hi Paul, Thanks for your comment. I'm a snowed under PhD student at present and while I've been meaning to reply to your original comment, I've struggled to find the time. The other comments were easier replies for me - not because they were esoteric or nebulous - but rather because it was clear to me from a quick read how I might respond to the comment. This wasn't the case with your comment, which I've been mulling over ever since. Speaking as a former bureaucrat I don't think it is completely true to say that bureaucrats are unaccountable to their political masters. This certainly wasn't my experience in New Zealand. In Western Melanesia on the other hand there is a problem to do with the interface between the political realm and the bureaucratic. It's not quite so simple as 0 accountability though, although in instances it may be close. This is what I was getting at with my dislocated incentives. There are feedback loops in the aid world: specifically monitoring and evaluation processes. They are imperfect, however. Often, not necessarily for anyone's fault, they tend to provide somewhat ambiguous messages -- and clearly can't tell us that much about sustainability into the future. Some aid agencies do quite a good job of publishing these evaluations too, which suggests to me that the problem of people in the aid 'game' wanting to avoid the spotlight is not true everywhere all of the time, although it can be true in instances. Rather, I think perhaps problems with the way aid agencies approach civil service reform stem from two key areas: 1. This is hard work with no clear solutions. and 2. We're still learning as we go along. This doesn't mean we can't do better. But I do think there are often reasonable excuses for less than perfect progress to date. Thank you for a thought provoking comment. Terence

‘Perhaps to make bureaucracies work better we need reform of the way we do public sector reform in the Pacific, more than we need another public sector reform program in the Pacific?’ Marcus P. I agree with you Marcus P. and the real problem is encapsulated in your statement above. To quote the aphorism constantly circulating the internet at the moment, ‘The real definition of insanity is to keep doing that which doesn’t work.’ I note that my recent previous comments on this subject have elicited a thundering silence whereas other far more esoteric and nebulous motherhood suggestions seem to be endlessly debated. Can it be that the simplistic enunciation of the problem doesn’t resonate with the accepted view that often appears to be; ‘If you keep hitting a square peg hard enough, it’s eventually going to fit a round hole.’ Billions of aid dollars have been wasted by continuing to pour funds into the ‘black holes’ of overseas government services in so called developing countries due to the wonderful rosy glow it appears to give those who feel they are achieving practical results without anything tangible and long lasting ever actually happening in practice. Government bureaucracies are by their very nature, not held accountable by those who themselves are not able to be held accountable. The CEO’s of these bureaucracies are appointed by governments and ministers who have their own agendas and know the voters neither have the ability nor opportunity to hold them and their appointed minions responsible and accountable. The essence of the debate should be simply one of logic. No aid program should be funded without first ensuring there is a practical and operational feedback loop to ensure the predicted objectives and achievement benchmarks are being met and maintained. Progress payments and a policy of ‘No results, no money’ might ensure we see ‘bang for our buck’. Reams of subsequently glowing reports of platitudes, motherhood statements and hyperbole are just a waste of paper. Understandably however, such a ‘results based policy’ might also reduce and restrict the operations of those in the overseas aid game who presumably don’t wish to have an objective spotlight turned on their own endeavors. Husat ilaik toktok nauya? (Anyone care to comment?)

Ross Garnaut is well-respected in both countries. He should be thankful that PNG has helped him build his profile and put him where he is now – one of Australia’s most influential individuals. However, among the many hats that he has been wearing, Climate Change and Mining are two challenging, yet hypocritical. Has the good Prof. become a sacrificial lamb for the gigantic MNC’s or has he misled himself in his career path and academic discourse mixing up his values, if he had some? Of course, losing a Chairman’s job won’t make him go starving in the new year since he is already rich given his prominence and wealth his many ‘top jobs’ may have given him over the many decades of his frolific life – yes check out Forbes! His real loss now is the “saga” created by the O’Neill-BHP Biliton connection – let alone the Chinese connection. O'Neill has definitely won the confidence of many citizens who want to end any form of Neo-colonialist connotations in today's vocabulary. However, any sober person (PNG citizens like myself, Australians with PNG connections and the Fly River landowners), would nod with Garnaut on his critical comments about mining taxes being misused by PNG politicians and bureaucrats. Since when has aid money or mining revenues and taxes been sustainably managed and used in PNG? Speaking on sustainability, is Garnaut “the person” to head a mining company when he has written immensely about Climate Change issues? On the other hand, is O’Neill “the person” to shut-off technical people/advisors and in this case, for a very “small” but honest comment by Garnaut that many see no major fault with it? Is O’Neill trying to do a cover up or is he doing a poilitical witch-hunt? All we know, for sure, is that PNGSDP has not delivered to expectations and Garnaut can take the blame for that. On the other hand, we must also know that O’Neill, as a person, CANNOT decide for the thousands of Fly River people nor for PNGuineans. His job as the PM does not give him all the rights to proclaim decisions that go beyond mining and development in PNG. However, that is how funny politicians respond in PNG politics – scolding at and rebuking critics while keep dipping their fingers into what they are seemingly there for. That is what defines their ego. Hence, are we seeing two hypocritical figures at play here; a Garnaut whose values and qualifications imply anti-mining and promotion of environmental sustainability and an O’Neill who plans to make 2013 a year to fight corruption. Although, Garnaut’s comments have been perceived by many as honest and somewhat “insensitive” to a government that is headed by a PM who is defensive and has taken unilateral action on someone who has been immensely attached to PNG. It is therefore, humble for O’Neill to swallow his government’s pride, accept criticisms and bring back Prof. Garnaut to continue what he is supposed to be doing – this time Garnaut should serve PNGSDP and the people of Fly River with honesty, dedication and some values of humanity. Thus, the critics that PNGSDP has not done much for the people should be the issue to tackle, not characters

Thanks Terence for another thought-provoking blog. Perhaps a suitable analogy that helps us understand why public sector capacity building in the Pacific performs sub-optimally is the Soviet tractor gearbox factory? This factory produces tractor gearboxes of a type and number because it had been planned in Moscow to happen this way, many years ago. As it has occurred, the factory ends up with more gearboxes than it can dispose of, yet the workers are so badly paid that they cannot survive. So they trade gearboxes on the black market for milk and bread from the state dairy producer and state bakery. The state wheat farm that gets the tractors that use the gearboxes is grossly inefficient because the gearboxes are not the right type for the farm, and they break down regularly anyway due to poor quality assurance in the factory. And the bread queue for ordinary citizens in Moscow gets longer and longer every day. In short, the incentives for individuals working within the system are poorly aligned with outcomes for ordinary people who depend on the system to work. The intellectual framework that supports a different, nuanced, flexible and demand-driven approach in the public sector reform business model of donors, now largely exists. However there is a great deal of institutional inertia at an operational level that resists the operational implications of the adoption of these principles. This inertia is based around norms and incentives - precisely what is discussed in this blog. Tobias rightly points out (in this blog and his paper) that capacity constraints in the Pacific are often closely linked with a small population base. But most efforts in the past to regionalise, outsource or externalise capacity have hit walls built of passive and sometimes outright resistance. It is difficult to escape the proposition put forth by Acemoglu & Robinson (http://whynationsfail.com/) last year that endemic capacity challenges are a political problem, and not a technical problem. I don't think this means that donors can't do anything about public sector capacity in developing countries. For example, in Solomon Islands, Australia has about A$240 million of influence to play with through its agencies. That's a fair degree of influence in Honiara. But how it is allocated is far more important than how much is allocated. If we think the Solomon Islands Ministry of Health has the right conditions and incentives to deliver public goods, then directing many more tens of millions into that organisation will nurture and support the dominant paradigm within that organisation, and deliver exponentially more of what is already being delivered. Or alternatively if it is riddled with malfeasance and maladministration, and delivers very little in the way of public goods, then we should expect that we will further nurture that culture by directing more funds in that direction. Consequently donors need a far greater and nuanced understanding of how institutions change, and more importantly they need to follow up with the will to alter how they allocate resources, if they are to play a positive role in making bureaucracies work better in the Pacific. Perhaps to make bureaucracies work better we need reform of the way we do public sector reform in the Pacific, more than we need another public sector reform program in the Pacific?

This is a great report on these lectures. Duflo's methods are so important to ensuring that aid assumptions are challenged. Her work on the important influence grandmothers can have on their granddaughters' health with just a small cash transfer is still in circulation, 13 years later: http://economics.mit.edu/files/732

The Garnaut imbroglio poses something of a dilemma for the Federal government. There’s a plausible (and ethical) argument to propose that Bob Carr’s foreign policy approach to PNG should maintain a balance between building the relationship and making it clear it does not condone bad policy (although the diplomatic nuances of such a posture are complex). But real politik within Australia would dictate that the government steer well clear of the tangled issue of Garnaut, the Sustainable Development Program and Peter O’Neill’s sensitivities. In an election year, Gillard and Carr certainly wouldn’t want to do anything that might stimulate greater controversy around the Manus refugee camps than already exists (and O’Neill is already encountering resistance to the initiative from Belden Namah). But most of all they wouldn’t want to jeopardise the newly strengthened and energised friendship with the PNG government, with Peter O’Neill being central to this. Papua New Guinea’s strategic importance in the China-Pacific era has dawned on our politicians and the need for a stable, friendly PNG has become a paramount goal. Bob Carr learned last year than intervening, even rhetorically, in PNG government actions is a dangerous place to be. One can perhaps criticise the PNG government in its approach to the Ok Tedi issue, but it seems a pity that Ross Garnaut didn’t handle the matter a little more sensitively himself.