Comments

I think it is a mistake to suggest that GNP is an indicator of development. Especially in a market driven economy. It is an indicator of economic growth only. Even though a country's GNP per capita is for example $3500, there remain many people who have income levels much below this, and many astronomically higher. There is still plenty of scope for development aid that is designed by outsiders and used properly to overcome poverty. The $4 per capita of development aid would be a much better indicator if it was compared to the headcount of those living in poverty or vulnerable to economic downturn. Then you can compare countries. And have you forgotten climate change and environmental degradation which will increase rapidly in the coming years. I think more detail is needed in this suggestive analysis. I agree that stronger partnerships and more "working down" is needed with aid funds, and I see Australia in a good position to do this.

Richard, Using procurement to develop critical skills, experience and knowledge capacity is to be commended and should be considered as a key element in all infrastructure and other projects. Your option of using the tender document to include a "specific set of skills transfer requirements which are costed separately. These costs are included in the contract as a ‘provisional sum’, and the skills transfer requirements are not subject to competitive tender" is supported. I would be interested to learn where this option has been used, especially in the Pacific. E. John Blunt

This is great news for the Members and their families. How many more houses will be bought in Australia with these funds? Thanks to the Development Policy Centre and Transparency Solomons for letting the world know. It is so sad to see the Government act in such a way.

The experiences of Asia's top 10 economies are driven by majority ordinary people whose creativity and skills bring in much income and allow them to take advantage of the tourism, internet and mass production of export goods and services (market). The economies are not driven by policies, and the good intentions of governments do not necessarily realise equitable distribution of resources, or aid money for that matter. Many people even in Asia are still poor today. Papua New Guinea will realise the potential of its people when market opportunities are available, transport, including internet services are cheaper and necessary infrastructures are in place to enhance that potential, Aid follows policies and achievement of the policies do not necessarily make aid successful for everyone. Aid money to date, if evaluated, will result in much of it been misused indirectly and did not necessarily impacted the beneficiaries who are understood to be a minority of people for the sake of donors good reporting purposes.

Great post. It's a really interesting topic. With increased knowledge must come freer movements to build human capital. By opening up migration possibilities, developed countries like Australia could complement the move from developing nation to middle-income country. David Phillips has a new book, <a href="http://www.anthempress.com/development-without-aid-hb" rel="nofollow">Development without Aid</a>, that explores migration in particular (albeit with a focus on the poorest developing nations).

Thanks Joel for this post which spookily combines two of the things I have been reading and thinking about recently - the future of aid (I've just read Aid 2.0 by Sumner & Mallett - review forthcoming) and how to share knowledge to improve policy making. In terms of the changing face of aid, as someone described it to me recently the Pacific is the 'hole in the doughnut' when it comes to aid 'theory' and that is borne out by the work you've referenced here - the thinking is driven by and derived by the Africa experience and then extrapolated to Asia. This is (it seems to me) partly because the thinking is largely done by the DFID/ODI grouping and its satellites, who have long been recognised as thought leaders in this space and with good reason. And, as I have also been reminded recently, the 'theory' is and can be different when your aid is going a long way away rather than just next door. So it is likely to remain the case that there will be some Pacific exceptionalism going forward. Having said that there is certainly the need to address the changing development dynamics arising from the fact that PNG and Fiji are now aid donors in their own right, Timor-Leste, PNG (and possibly Solomon Islands in the future) are resource-rich which means that aid is becoming increasingly less significant in terms of contribution to the overall budget and there is increasing awareness of the importance of taxation both domestically and in terms of addressing international aspects of the policy coherence imperative. As for knowledge strategies...maybe next time! Looking forward to hearing from others on this Tess

"... it is only in the interest of the elite to cede power to inclusive institutions when they are confronted by something even worse." You imply, and I agree, that the elite will only act in their interest. They might be bribed for example. Otherwise, politicians are professional power brokers and cede power when they have to, when it is the least-worst option—i.e., when they fear that not ceding it would lead to even bigger losses of power. This is a most important matter, particularly in PNG where the ever-increasing shambles will only be halted by constitutional reform. I wrote at some length on this on the comments section in <a href="https://devpolicy.org/governance-in-png-what-can-donors-do-20130124/" rel="nofollow">this blog</a>. You suggest "a ‘fiscal cliff’, or a debt crisis or civil protest" but I doubt these things would lead to ceding power. I don't think they are fundamental enough. I know of no such instance. They might lead to change of policy which will likely be a manoeuvre toward keeping power. I think politicians cede power either (i) because they are bought, or else (ii) because they see it as a least-worst option. A classic instance of the former was the Scottish parliament voting itself out of existence in 1707—the members were bribed by Westminster. Comparable was abolition of the Queensland upper house in 1922 and the NZ upper house in 1950. In those cases a large number of members were suddenly appointed by the respective premiers to the house as a "suicide squad" and they voted to abolish it—as they were paid to do. (It may seem they relinquished power they did not have but when Premier Jack Lang tried the same tactic in NSW, the supposed suicide squad reneged and sat on as members of parliament.) For cases of ceding power as a least-worst option we have the transformation of Australian upper houses to proportional representation (Senate 1949, NSW 1978, SA 1963, WA 1987, Vic 2003). In each case the politicians of the major parties changed the constitution to allow minor parties to hold the balance of power. So the institution became, as you put it, more inclusive. By extension this ceded power to the voters since they became more accurately represented. As such, the changes were increments in democracy. In each of those cases the upper house voted to change the 50 to 150 year-old system, so that Democrats or Greens or Shooters would be able to win seats. Why? Because the alternative was worse. The alternative, in all cases, was that their political opponents might win great power in the future. But if Party A had an opportunity to change the system to prevent Party B from getting power, why did it not take it for itself? Why cede it to as yet unrepresented, almost non-existent minor parties? Because they had no choice. Because the only way they could take the power was if they didn't keep it. WA 1987 illustrates the idea. Labor and the Nationals together could out-vote the Liberals to change the constitution to introduce PR and thereby prevent (probably) the Liberals from ever getting a future majority. Of course, the Nationals were not going to permit Labor to get a future majority. The Nationals reckoned they could set themselves up for the balance of power if there was a PR system. Labor accepted that. I think that is the general rule: the members are either paid to relinquish power or they do it in circumstances where it is their least-worst option. (Note that in none of these cases was there any public crisis or significant public activism and for the most part the public took no interest whatever.) In the Pacific, parties are weak so there is little fear of domination by an opposing party. That would mean reform will require an appeal to members' pockets. It is very important. The political design in the Solomons, Vanuatu and PNG has never been known to work. Australia permitted that model to be installed. There was no precedent for it in the colonial design of the Australian and NZ parliaments and there were (and are) no successful precedents for it anywhere. There are several catastrophic failures. If Australia doesn't rectify it, RAMSI will be for nought and PNG will continue its decline into chaos. See the discussion <a href="https://devpolicy.org/governance-in-png-what-can-donors-do-20130124/" rel="nofollow">here</a>.

Hi Colin, Thanks for raising this very important subject. I echo the concerns raised by Rabunaf Levi. There are a number crucial factors that impact on the effective delivery of value for money at the delivery end of the public finance continuum. Firstly, there must be ongoing and continuing availability of public funding so that any project, resource or staffing is funded for the life of the project. That means effective costing and ongoing maintenance programs that don’t earn much ‘political capital’. The delivery mechanism and public administration officers must have the training, responsibility and opportunity to undertake what programs are funded and approved without being sidelined through political opportunism. An accountability mechanism/s must be fully funded and effectively operating to ensure any deviations from official policy and finance legislation is identified and entirely followed up within a reasonable time frame. ‘Justice deferred is justice denied’. Effective accountability includes government auditing and ombudsman operations. Those performing these roles must feel able to perform their roles without fear or favour. Look at how Judge Barnett was treated and how the last Chief Ombudsman was also attacked. Were their findings and efforts ever followed up and prosecutions made? All those in the service delivery process must know and expect they will be held responsible and accountable otherwise there will always be an expectation that any breach can or may be overlooked. Criminal activity is often due to 95% opportunity and 5% intent. Any deviations from finance policy and legislation must be followed up and if necessary, followed through to allow effective legal action to reclaim misspent funds and convict any or all that may be culpable and liable to prosecution. In the past, any public funds allocated for use in the MP’s electorate have been observed to often become a publically recognised slush fund to allow MP’s to promote their our re-election or to provide implied influence and prestige at the electorate level. Government cheques for public facilities have been reportedly presented amid much media attention and then the proceeds requested to be personally returned to the giver. While there has been a start at identifying previous malfeasance and Mr Koim’s Task Force Sweep has started to operate, this has only just scratched the surface of what needs to be done. Public statements encouraging positive action to overturn many years of official inaction and myopia cannot be overturned without practical plans and effective management starting at the top. We have yet to see this ‘new start’ commence operating effectively at all levels of the PNG Public Service. The delivery of effective government programs is dependent of the three arms of government, legislature, executive and judiciary being able to operate independently and without any blurring of roles and accountability. Government is therefore like a three legged stool. No matter what surface you stand such a stool on, it will be stable and stand up. ‘White ant’ or weaken any one of the legs however and as soon as any weight is put on the stool it will collapse.

Hi Tess Thanks so much for your comment and other commentary on related posts. You raise a very good point about opportunities for improved accountability with MPs likely to spend more time in their districts to make decisions, ensure their projects are on track and of course, give the keynote speech at the launch when their projects are eventually completed. While I agree there will be more dialogue about local issues that could extend to national level policy, I also think there will be a lot of frustration with the time it will take to implement projects. This could lead to a lot of finger pointing and perhaps create an incentive to work outside the system to try and get projects completed faster. Another very important accountability mechanism for devolved funding that is often overlooked is the requirement for a ‘bottom up’ Five Year Development Plan starting at the ward level. JDP/BPC decisions are supposed to be based on priority projects in these plans rather than the JDP committee or MPs themselves. If there is genuine community dialogue in the formulation of these plans, I think it could be an important tool to promote community engagement and accountability for JDP projects. Cheers Colin

Dear Rabunaf Thank you for your encouraging comments. I also appreciate your questions about the implications of devolved funding for the public financial management act, particularly in regards to implementation and accountability processes. Specifically, you mention a major roadblock to effective spending might be the length of time it takes to procure projects through the Provincial Supplies and Tenders Board (PSTB) and the Central Supplies and Tenders Board (CSTB), depending on the amount. I agree this will be very challenging, especially for larger provinces like the Eastern Highlands that have 8 districts and therefore 8 JDP/BPCs receiving K10m each, not to a mention a PSIP allocation of K40m and LLGSIP funds. Added together, that is a lot of project funding to procure in one province in one financial year, which I think will mean significant delays between deciding on projects to be funded and actual implementation. Both JDP and JPP projects will also be dependent on the Provincial and District Treasuries to access funding, many of which probably do not have the capacity to manage much larger volumes of funds. You also raise another important point about the limited financial delegations of District Administrators even though they are CEOs to the JDP/BPC and responsible for implementing its decisions. The District Administrator will need to rely on the Provincial Administrator, who has higher financial delegations and is therefore ultimately accountable for approving spending on larger projects that were agreed by the JDP. I am not sure that all Provincial Administrators will feel comfortable approving spending on large projects when they were not part of the decision making process. I will continue to look into these issues more specifically as the year progresses. Thanks again, Colin

Dear Collin, Thank you for the post and I hope Papua New Guineans can grasp and understand the underlying facts in your post; but critically, I agree that drastic base level developments need to start in the country. It is the implementation aspect in terms of the financial procedures and processes of accountability within the PFMA and concurrently with the provisions of the OLPG&LLG that need to be consulted. Firstly, how can the provisions of Section 33A & 33B of OLPG&LLG be implemented when PFMA does not recognise JDP&BPCs as it does with PSTBs and the CSTB? This will mean that to comply with PFMA, all projects above K100,000 Certificate of Works level will be referred to PSTB (below K3 million level) and to CSTB (above K3 million and less than K10 million)...how long will that take? Secondly, does the JDP&BPC have financial powers to deliberate upon how much is allocated against projects? If so, do they and their MP have financial powers such as Section 32 or 29 within PFMA to execute decisions with financial implications. Thirdly, does the District Administrator have Section 32 financial powers of PFMA to be CEO to JDP&BPC and advise on finance above the delegatory limit of K10,000? Finally, given the large shift of finances to Districts and Local Level Governments and the large roles given to MPs as Chairpersons the following legislatures have to be amended to instill greater accountability and governance: 1. 89 Electorate MPs should cease to be given Ministerial Portfolios but become ordinary MPs; and, 2. 22 Governors be automatically made Ministers and from within them they vote a PM and DPM since they are the only ones voted in by the whole province! Collin, accountability and governance are not the same face of the coin...the latter smiles while the other grinds like the edge of a K1 coin. God Bless Brother, Speak loud and strong for PNG!

Hi Colin, Thanks for another great post which I found very thought provoking on a number of levels. One area that I have been thinking about since reading this item is that of accountability and whether the governance arrangements for devolved spending can indeed improve it. Accountability is, I feel, a bit like development - it is a process rather than a product. But the framework outlined here could add to that process I feel. It seems to me that one of the spin-offs of putting the MPs at the heart of the decision-making processes at various levels is that it would be reasonable to expect that MPs will spend more time in their constituencies than might previously have been the case (to do the decision-making, allocating, etc). This, in turn, creates an opportunity for MPs and their constituents to have ongoing dialogue about issues (sure starting out with local but possibly extending to national and even international) and thus a culture of accountability can be nurtured. Accountability is a two-way street. Constituents need information to inform their scrutiny and support to take on an assertive role in holding their elected representatives to account. MPs need information in order to address the questions raised by constituents and possibly learn to be comfortable with being asked questions. Facilitating dialogue around how these funds have been allocated and spent strikes me as a great way to develop improved political engagement more generally