Comments

Thanks for this background Anthony. I wish Figure 4 was on one axis and aid was really climbing ahead of defence expenditure! That might justify the especially strong focus on cost effectiveness that aid seems to receive from MPs in comparison with other areas of government expenditure. At just 1.4% of total budget expenditure even if one could double aid's cost effectiveness this won't make much difference to the effectiveness of government overall. Why do you say: Failure of the government to control overall spending represents a significant risk to the aid budget in terms of further delays to achieving the 0.5% target or removal of the target completely? Why do you not also talk about the level of revenue in this regard?

An interesting article, but a few words of caution might be useful: ICAI is far from a proven public good - their reviews are often patchy and ill informed, (see comments <a href="http://www.simonmaxwell.eu/blog/reflections-on-icais-first-year.html" rel="nofollow">here</a>) whilst draining huge amounts of time from the country teams they descend on. The Queen's speech last week failed to confirm the commitment to 0.7% - and this highly visible growth in the budget has earned DFID some very powerful and vociferous enemies in the Tory camp, and in the press. this might all come back to bite them in the form of a re-merger with the FCO or a cut in budget (the burgeoning xenophobic UKIP party, currently stealing many Tory votes, wants to switch it off completely). The increase in budget might have been more managable and useful if it had been accompanied by a streamlining of management burden and greater use of sector budget support or EU-style MDG Contracts. instead it has been accompanied by a retreat to 1980s style project micro-management, a neurotic approach to corruption, and a growing mismatch between budget, management capacity and principles of aid-effectiveness. On this latter point, DFID has gone from leading the field in demonstrating good practice, to having effectively dropped harmonisation and alignment like a hot potato. If one looks at their quality assurance guidance for Business Case design, whilst it is very strong on fiduciary risk, vfm, etc it is silent on any of the good-donorship principles of Rome, Paris, Accra or Busan. This means that all the DFID funds programmed in the last 2 years will have been done with no consideration of these hard-won principles of effective aid, but will instead be strong on narrow, projectised and attributable short-term results. That may be "aid", but it is not "development". And I won't even start on Mr Cameron's efforts to remove a commitment to inequality in the post 2015 agenda... So yes, lots to learn from UKAid, but not always lessons to emulate!

As far as noticable in the press, Indonesia in not under threat from any other country. They spend so much on armaments that it would lead some to question how they qualify for more aid; when cutting their budget for armaments would probably be of more benefit. Is Australia keeping on the right side of the big kid by handing over a few lollies.

In 2012, according to OECD DAC data (converted at today's exchange rate), the entire New Zealand aid spend was AU$467M. Less than your annual increase. So you'll have to forgive a Kiwi at least a little bit of trans-Tasman aid envy...

Thanks Stephen - going to be a very interesting evening tomorrow. But I would have to say that a nearly $500m increase in the aid budget is a good outcome (and one that I was not expecting). I'm sure most commentators will protest the delay in reaching 0.5% rather than noting the huge increase in overall spending. Will be a big challenge for AusAID to spend an additional $500m (though I guess it depends on what the asylum seeker costs are capped at). Thanks as always to you and your team for helping to decipher all of this. Joel

Recently, we <a href="http://scholar.google.com/citations?view_op=view_citation&hl=fr&user=qwQSRdAAAAAJ&citation_for_view=qwQSRdAAAAAJ:d1gkVwhDpl0C" rel="nofollow">argue</a> the existence of negative relationship between aid and governance. Stephen knack thinks that aid has diminishing returns on governance, because it creates corruption opportunities. But, with the advent of threshold theory in economic and econometric methodologies, we found that aid has negative impact on governance in excess of fixed level, that make up the absorption ability of the country.

Based on the work of Samoan consultants that was commissioned by ADB for the Capacity Development study a few years ago and my own discussions and visits to Samoa, I understand the land reform process in Samoa to have been largely funded by external agencies but fully lead and participated in by Samoans. However, I think the best person to comment on this would be Hinauri Petana.

Whilst I agree entirely that Australia ought facilitate better access to employment opportunities in Australia, the opportunities will only ever directly benefit a very small percentage of the population. Currently over three quarters of the population are directly dependent upon agriculture for their livelihood. Strategies that focus on improving agricultural production, diversifying and value adding (eg through making tofu/tempeh from locally grown soybean) timber production with rural based timber and bamboo milling and local furniture making, more intensive cattle production, mini dams to capture wet season water to use for year round vegetable crop production are a few examples of the ways in which the long term employment and prosperity of Timorese can be grown in country. I also think it is fanciful to imagine that the Australian horticultural Industry that lobbied for years to get better access to the labour market would be at all grateful if the incentives for backpackers to work in agriculture were to be removed. I agree entirely with the other reforms to the seasonal worker scheme suggested. It's a powerful disincentive for potential employers if they have to front for an airfare for sight unseen workers , especially given that Timorese workers generally have poor english language skills and close to zero experience in modern commercial horticulture. The existing demands for pastoral care put a further impost on potential employers.

Great article and while I support 100% that participatory processes are key to successful projects in SIDS. I disagree with your mention of "land reform in Samoa" being a good example. I beg to differ and ask this: Participation for whose benefit? In most cases, it is for the development partner's and for economic development that overlooks the holistic and the overarching concerns of the indigenous person/locals/culture. These participatory processes are therefore very rarely for the sake of the locals who have been summoned to "participate".

Thanks for this post. I remain unconvinced that aid will be a significant issue in terms of the forthcoming election in Australia but it is good to see the Greens doing their bit to get it on the agenda. As for the Cameron government's activities in the UK... it is something of a good news bad news story. Whilst it is fair to say that making the commitment to the money is more important than debating legislative language it's important to remember that enshrining the 0.7% commitment in legislation was part of the commitment. Plus, and possibly more importantly, if <a href="http://www.newstatesman.com/politics/2013/03/cutting-aid-budget-and-skipping-meetings-cameron-still-global-leader" rel="nofollow">this item</a> from the New Statesman is correct, then the devil really is in the detail

Both examples Dan Moulton cites illustrate 'Campbell’s Law'. This states: “The more any quantitative social indicator is used for social decision-making, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor”. In the case of Indonesia, I led a study of the national examinations in late 2009 (available <a href="http://inovasipendidikan.net/research/An%20Exploratory%20Study%20of%20the%20Ujian%20Nasional%20in%20Indonesia%202010.pdf" rel="nofollow">here</a> [pdf]) That study found extremely serious weakness and argued that the quality of examinations was undermined by four factors: 1, A weak foundation of professional knowledge about student assessment across the education workforce; 2, Poor professional and ethical standards with widespread, systemic and entrenched malpractice; 3, Educational and technical weaknesses in assessment design; and 4, Unacceptable educational risk from high stakes testing. Recognising that it was most unlikely that even such a poor system would be abandoned, the study made specific recommendation for reform based on four factors targeting 1: A professional, integrated and aligned national examination system; 2: An ethical education system; 3: A better quality, credible and flexible credential at the end of schooling. Strategies to lower the stakes for schools and children should yield positive benefits. Your comment about school based tests could help with this but also, unfortunately, reduce test reliability. Well-intentioned suggestions by some for more and external assessments will likely make a poor system even worse. Hence my repeated calls for caution.

This topic is most timely for Indonesia where a major controversy about the national exams is taking place. Passing rate is nearly 100% and there is always some leakage. Is there an alternative to high stakes national testing for a country like Indonesia? Would school based performance evaluation be any more valid as a determinant of passing or failing? In USA where local control of education is sacred, my state of Massachusetts introduced a high stakes state wide exam as a final determinant for graduation from high school. In the first year of the exam a principal was caught giving out answers so that her school would not look bad in the final results. It seems high stakes always is an opportunity for fraud. Would a national low-stakes exam be useful for Indonesia for determining overall performance if held on a sampling basis and the student name and school is somehow made anonymous to prevent cheating?