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The chance that the Australian Government would support a candidate with a development focus might be increased if the Australian representative on the Board of Governors were selected and briefed by an agency with a focus on combating poverty. This means the Australian Agency for International Development (AusAID) through the Department of Foreign Affairs, not the Department of the Treasury as is currently the case. This is now the practice in a number of countries including the UK (where responsibility lies with the Department for International Development) and Germany (the Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung).

For many years, the World Bank's approach to the region has not always been very clear, and in many of the countries it has had very little to no activity whatsoever (this is especially true in the northern islands). So I commend the Bank for its efforts to clarify its thinking on the Pacific. I agree that many of their observations serve to reaffirm what are already well recognized ideas and approaches for development in the region. I've yet to read the full paper, but from this summary it does appear that they've made a genuine effort to offer new "how to" approaches to some age-old challenges. Their discussion confirms the long-standing argument that when it comes to development in the Pacific, some degree of (cautious) "exceptionalism" is needed, especially in the smallest states where high "fixed-costs" and other endemic constraints are very real. But in the end, I totally agree with Paul that our own policies, institutions, and (let's be brutally honest!) quality of leadership are also major factors that add burden to an already difficult development situation. Yes, the islands face many real development challenges, but there's also much room for self-help and improvement.

I agree with you Paul. I don't recognise much that is new in the World Bank's approach. Pacific island countries and donors have long been discussing integration of transport and communication links, increased labour mobility, and regional approaches to regulation and public sector capacity in specialist areas like telecommunications, audit and statistics. The problem is not what needs to be done, it's how to reach agreement and then progress to implementation. The World Bank's 3rd prong, Maximising gains from natural resource industries, takes us back to the hardy perennials of governance, accountability and public sector capacity that have been the focus of aid programs for decades. Certainly innovative approaches to ensuring better outcomes from natural resources are needed and one such innovation in the World Bank's 4th prong is to increase the role of the private sector in delivering aid-financed goods and services. This suggestion draws on international experience over the past decade of the private sector in leveraging development outcomes. In the Pacific island region, there are many examples of private sector development activities that are delivering health, education and economic benefits. The private sector brings logistics, management skills and innovation to basic service delivery challenges and in the case of mining companies, can often reach remote and hard to access populations. But engaging the private sector in delivering goods and services also requires accountability and transparency. At present, it is difficult to tell from company reporting the extent or the cost of the services they deliver whether as part of a formal operating licence agreement or as a voluntary corporate social responsibility project. If donors in the Pacific were to move to having more partnerships with the private sector to deliver aid-financed goods and services, and they provided public reporting on the cost and effectiveness of these partnerships, this could pave the way for governments in the region to consider the private sector to supplement resources for delivering basic services.

Every country in which I have worked, and it is now close to 50, claims that it is "different". And of course, in a number of senses, each is correct. Each country has a unique history, culture, and institutions, which determine how people behave, the opportunities, and their policy choices. However, in another sense, many are depressingly similar. Policy actions and outdated institutions make achieving prosperity difficult. Most Pacific region countries simply do not have the fundamentals that effectively encourage private enterprise. Their policies do not promote investment or entrepreneurship. Many countries view business activity with suspicion and as something that needs to be controlled. Foreign investors have to have amazing persistence if they wish to invest. Yes, Pacific region countries are small and remote, but many of their actions amplify the disadvantages of size and distance. In turn, this makes many of them more dependent on aid, so a vicious circle is established. None of the suggestions in the "new" World Bank approach are are in fact new. What is needed, is not another initiative, but rather a renewed focus on fundamentals. Countries in the Pacific would do well to look at the example of Cape Verde for a small isolated country that has achieved high growth.

Thanks for the summary. Another point that stood out for me in the presentation, and which turns conventional thinking in the Bank on its head, is the claim that the public sectors of some (mainly micro) states will and should remain large relative to their economies. This focus on the “crowding in” effect of public spending contrasts with previous attempts to downsize the public sector of Pacific island countries. In my mind, this seems a sensible and refreshing approach, especially in micro-states like Tuvalu where aid money is likely to remain a large proportion of GDP. At the same time, it shouldn’t justify a deterministic approach, nor is it appropriate in larger countries.

No doubt, the choice of Dr. Iweala would be an excellent choice given her track record of outstanding success in turning around Nigeria's economic scene.

Christopher, thanks for your insider’s assessment of the state of the ‘reporting culture’ within AusAID. You note that the Office of Development Effectiveness (ODE) has poor quality data and systems to work with. An important issue is the timing of the release of the country annual program performance reports (APPR). I have recently travelled to a number of countries in the Pacific to present a workshop. I sought information from the AusAID website for each country, only to find APP reports were up to three years out-of-date. Tonga’s report for the financial year 2007-2008, was released in November 2008, but the reports for Samoa and Nauru was for 2008-09, released in June & July 2009 respectively. For Kiribati, the APPR is for the year 2008, released in November 2009. For Solomon Islands, no APPR was on the website, only an undated document on the two countries Partnership for Development. No report was available for Fiji although reports on three specific program dated 2011 were available. Information has to be timely to be effective. It may be partly to do with the uneven capacity of its staff in its country posts, as you highlight (‘most officers are still lacking the skills to really make the assessment work’). It may be to do with the extended internal processes AusAID has vetting these reports before handing them to an external consultant to validate. You also note that AusAID’s self-assessment system is ‘riddled with faults and limitations’. ODE needs to provide this feedback, and report publicly on the extent of improvements in staff capacity and system performance. AusAID and ODE need to appreciate that there is an audience out there who want more than superficial assessments of aid activities. We want up-to-date information on results achieved. We also are looking for a good situation analysis of each country, based on honest assessments of limitations of program design and delivery, host government shortcomings and the lessons learned. Richard Curtain

Hello Robert, I see your argument has shifted from regulation to trade. Trade can, indeed, help with development. However, it seems exceptionally unlikely to me that the linkages created by the small number of visits promoted under the scheme will have an influence on poverty that is significant in any way when compared do that which can be done through market forces alone in the trade arena. With regards to NZ growth rates. The reforms commenced in the mid 1980s. Economic growth stagnated for about 10 years followed by a brief period of improvement (mid-late 1990s), followed by further recession. Recovery really kicked off in the new millennium under the rule of a government that was decried as socialist by its opponents. Even then growth rates achieved have been less than those of many Asian economies. Including ones that score much lower on ease of business rankings. Moreover, our economy while performing alright hasn't done any better than it did in the 1960s (for example) under a much more regulated regime. This isn't to say that regulation doesn't matter - but clearly it isn't the only thing that does. Otherwise the New Zealand story would be quite different. Cheers Terence

The term 'blue economy' is not only used to describe a 'marine version of the green economy': Gunter Pauli, (2010) The Blue Economy-10 Years, 100 Innovations, 100 Million Jobs http://www.clubofrome.org/?p=1625 For those who are time challenged or suffering from bibliophobia, 'The simple show' explains Pauli's 'blue economy': http://www.youtube.com/watch?v=1af08PSlaIs

Hello Robert, Thank you for your comment and apologies in advance for my limited reply I don't have good internet access at present. You state:"It is not clear what benefit you are asserting NZ businesses get from this program." The anticipated benefit is clear enough. It is in the quote I used in my post and on the webpage I linked to. To reiterate, the desired benefit is "the establishment of lasting and progressive trade and business relationships". This, if it works, will benefit New Zealand business. It may even benefit New Zealanders more broadly. Perhaps, even, it will be one of those relatively rare moments where the government can use its material resources in a planned manner to generate economic outcomes that are better than those produced by markets alone. Perhaps. But these are benefits first and foremost for New Zealand - they aren't aid. As for the potential for visiting business people to learn about NZ's light touch regulations and then take this information back to their own countries, subsequently enhancing economic growth which in turn helps the poor. This is unlikely for the following reasons. 1. It does not seem clear that the visiting business people will be taught anything about the NZ regulatory environment. They are being brought over to visit businesses not government departments. 2. It is unlikely that the views of a few business people could really bring about regulatory reform - political economy is much more important here than what a few people might learn during a 10 day jaunt. 3. It is unclear that New Zealand really has a regime worth emulating. In the immediate aftermath of our adoption of it, NZ's economy stagnated for more than 10 years. Since then it's performance has been average at best (contrast this with most Asian economies, which have boomed). Cheers Terence

I think the recent debate directed at the limitations of Australian Aid effectiveness data is helpful and important. However, I also think the heavy criticism hoisted upon ODE and AusAID misses the point a little on the development effectiveness agenda within the organsation. As one of the few professional evaluators to have worked in AusAID, I think it is important to acknowledge the limitations of what ODE has to work with. The reporting culture in AusAID is traditionally and continues to be weak. Datasets are poor, good baselines are rare and the political imperative of reporting in sound bites is common. This means strong, rigorous and thorough impact reporting is virtually impossible for most programs due to the poor systems and structures built into the aid delivery model. ODE and the Operations Division of AusAID has begun to tackle this by driving a cultural change built around the 'self-reporting' performance system of the agency. This system is based largely upon a World Bank model that looks to regular reflection on how programs are tracking against standard DAC measures (relevance, effectiveness, efficiency, M&E, sustainability and gender). While this reporting is completed by AusAID officers, there is a moderation process carried out by the Operations Division and then a realism review carried out by an independent consultant through ODE. The quality and robustness of these reports varies enormously and they range from the abysmal to the impressive. What is important when we critically dissect the process is to remember that it is still new, most officers are still lacking the skills to really make the assessment work, and we are going from virtually no discussion of accountability and performance to a dialogue now informed by a call for better skills and greater rigour. The system is riddled with faults and limitations, but there are a range of committed individuals working hard to make it work. To single out one good example, the Inodnesia program in AusAID has instilled an impressive M&E regime in the last three years. Working on many fronts, they have built in protocols for evaluation report release, they insist on management responses, they have a set of M&E standards, they have a professional development program supporting staff in the Jakarta office and they have a Minister Counsellor committed to cultural change. This is impressive for a program that was publishing less than 5% of its evaluations four years ago. Having recently joined the World Bank, I continue to be stunned by the poor datasets that exist in the development aid world. I argue that part of this is driven by an obsession with data, indicators and information that does not mean anything, does not help anyone and is not utilised in interesting ways. We should remember that part of the performance mandate is about what we learn and how this is used. Yes, ODE have missed some opportunities to more strongly impose themselves on the effectiveness agenda, but I believe the analysis they conduct on the APPRs and on the annual quality at implementation (QAI) reports is actually very good. The sampling is sensible, the consultant has worked on the review for each of the four years the system has been in place, and there have been identified changes in the quality of the regular reports. Yes, the process is qualitative and yes the tracking data is still limited, but the report is a review of the existing system and at this stage I don't think it warrants constructing an in-depth range of tracking information. To do this would mean further challenges to an already stretched and inexperienced staff and the danger that they freeze like deer in headlights. I believe there are enormous opportunities for stretching the work ODE does and inviting them to be involved in an informed discussion on approaches and methodologies would be a good place to start. Believing that people, organisations and stakeholders will always make good use of data and the transparency charter is naive as the regular press articles by Steve Lewis will attest. Having a robust discussion of the best ways to make aid programs more 'effective' is a much bigger challenge than simply hoping that ODE can lift its game in its very limited mandate. Now that I am outside the public service I look forward to being more involved in this discussion. Christopher Nelson is a M&E Specialist with the World Bank based in Sydney. He previously worked in the Performance Effectiveness and Policy Division at AusAID.

I agree wholeheartedly with Stephen's first three proposals - reduced fragmentation, improved evaluation and greater aid transparency. Hopefully in each of these areas significant improvements are currently being implemented: by cutting sectoral spread in each country, through a simpler, easier to understand and outcome-focused performance framework and through implementation of the Aid Transparency Charter. Yet as Stephen points out there is much more to do in each of these areas. Aid transparency for me particularly stands out. When at least the ten biggest country programs have updated web pages with the promised new level of detail and when the IATI activity data is complete and just one quarter behind then I think we can say there has been some real movement in terms of transparency. I'll pass on Stephen's fourth and fifth priorities and instead suggest two others: ensuring accountability to affected communities and getting serious about the aid program objective of "saving lives". AusAID is working to improve accountability to Australian civil society, the Australian Cabinet and to partner developing countries - we need a similar effort to build accountability to the communities touched by our aid - in the interests of both justice and effectiveness. The first strategic goal of the aid program is "saving lives". The intrinsic importance of action in this area and its proven effectiveness demands that it be given a greater share of aid funding. Health should join education as the second flagship funding area of the program and all country strategies should ensure that health assistance is adequately covered by the donor pool before considering support for any other sector. We wouldn't neglect health in budgeting for the Australian population and we wouldn't in planning emergency aid, yet this is what is happening with Australia's long term development assistance. Aid for health needs to rise from around 14% of the program to around 20% (25% when including funding for sanitation and water) if we are to meet the commitments we have made to cut maternal and child deaths, to provide universal treatment for HIV/AIDS, TB and malaria and to provide family planning.