Comments

Joel, I haven't heard any Australian names come up yet - for the IMF job Paul Keating and Peter Costello were mentioned! There have been some interesting suggestions made and those worth exploring would include: Luisa Diogo, Michelle Bachelet, Ngozi Okonjo-Iweala, Sri Mulyani Indrawati, Trevor Manuel, Jairam Ramesh and Kemal Derviş. Your comment though points to a big challenge - getting most of the countries outside the G8 to stand behind a single candidate. Even if this were to occur they would struggle to achieve the simple majority of votes required could consensus not be reached, thanks to the weighted voting system. On Summers, I could have referred to his more recent comments on women's lack of aptitude for science and maths and taken with the pollution comments these suggest that Summers may not have the diplomatic skills required to lead an international institution. However, his comments about pollution and promotion of financial deregulation in the US are even more pertinent as they give some insight into his view of what development is and how to achieve it. Susan

Thank you Chris and Garth for your comments. I agree with your comments that ideally, the poor in our communities should have a say relating to the effectiveness of our aid program. Such actions would reduce the incentive imbalances between the aid agencies and the poor. My suggestion, that we make public disclosure of evaluations a pre-requisite for NGO accreditation (and therefore funding), is one of the first steps that can be made to improve transparency. This is unlikely to be too difficult for AusAID to implement and administer. A next step could be ensuring that publically available NGO evaluations are up to a particular standard and that those NGOs receiving core funding from AusAID are evaluated by someone independent of both AusAID and the NGOs. These actions would allow any interested Australian to view whether their taxes are being spent appropriately – as arguably the Australian taxpayer is the most important (albeit on average the least interested) stakeholder. But these are not the only steps – other steps to improve transparency are as you suggest by “implementing, sharing and publicising innovations” and making activities accountable to the poor.

I think Chris has the right emphasis here. Evaluations are important (especially if we can get people to learn from them and apply the lessons - not often achieved), but shortening and strengthening the lines of accountablility to poor communities is more important. Dinuk cites profit as a critical motivator in the commercial area. Profit is not generally generated by the assessments of expert evaluators of the commercial transaction, but by the powerful choices of people on the ground. While there have been many improvements in AusAID processes recently, making activities accountable to the poor, seems to me, to need a lot more focus and work by AusAID management.

Thanks Stephen for this useful focus on AusAID's activity rating system. Yes - making as much data available as possible is necessary for contestibility and is likely to provide useful information for AusAID at the same time. This sort of rating scheme provides an important summary of activity performance but is not sufficient. It is good to see that AusAID's planned performance framework is going to include a lot more clear measures of output (eg x thousand children immunized) and outcome (eg achieve a y% reduction in child mortality). We've had too many years of satisfactory scores for activity performance but few clear and concrete measures of poverty reduction.

Susan, Thanks for this blog. Who might non-US candidates be? If the world rallies around a different candidate who has a great reputation, then there might be an interesting challenge. Maybe Kevin Rudd could be farmed out to lead the Bank...! And I'll throw in my two cents on Summers. I'm not a fan of his but I think bringing up a 1991 memo (that he claims he didn't actually write) to discredit him is not a very compelling argument. There are lots of things he has done that deserve critique but basing our reservations predominantly on that memo says more about the quality and relevance of pure economic thinking than it does about Summers himself. Joel

I certainly I agree with Dinuk that greater transparency amongst International NGOs is important. As the 'Promoting Voice and Choice' report (http://bit.ly/x3rUvT) - which I authored for ACFID in 2010 - noted there have been some improvements in this area but they were not sufficient. Much of the innovation in this area has focused as much on NGOs becoming more accountable and transparent to the people and communities they work with, as on transparency to the Australian public. However these experiences are inadequately shared and often done in a piecemeal fashion. A truly strategic approach to transparency and accountability would see more collective efforts to not only publish reviews and evaluations - which is starting to happen and is important - but also have a focus on implementing, sharing and publicising innovations which allow people living in poverty to be holding the powerful - including International NGOs - to account

Well I really enjoyed reading it. This tip provided by you is very useful for good planning.

Many thanks for your post. In relation to comparisons between Fiji and Mauritius, I would like to highlight the importance of trade preferences for the development of industry in both nations. Subramanium and Roy (2003) found that export manufacturing was the foremost reason for the economic success in Mauritius and that furthermore, preferential access to OECD markets for garment manufacturers in Mauritius (particularly relative to Asian producers with obvious competitive advantages in terms of economies of scale and lower-cost production) was important for growth of the sector. Whilst the multi-fibre agreement, which had been important for Mauritus, ended in 2004, it had allowed Mauritius to develop an industry that could shift to more complex, and more value-added, manufacturing tasks. I won't go into the full details here (perhaps another blog piece is in order) but the preferential access to Australian and New Zealand markets for Pacific manufacturing exports, provided under SPARTECA, were also absolutely vital for the explosive growth of garment exports from Fiji from 1987 onwards (though Rabuka's incentives for foreign investors in the form of tax-free factories probably helped too). While maligned by many as an industry that was ultimately uncompetitive, by the late 90's 18,000 people worked in Fiji's garment export industry and it had overtaken sugar exports as the single greatest source of export earnings. Whilst the sector contracted significantly following the removal of subsidies for Australian fabric exporters in 2000 (which had been a key incentive for exporting fabric to often-Australian-owned 'cut, make and trim' operations in Fiji, which would in turn re-export finished articles back to Australia under SPARTECA preferences), and the expiry of the MFA (which had guaranteed a quota of Fiji exports to the US) garment exports from Fiji are still worth around FJD 90 million per annum, and the sector could yet remain a longer term prospect (particularly if the restrictive rules of origin requirements of SPARTECA are reviewed). Sorry to bang on, but the overall point is that meaningful access (and in many cases preferential access) to metropolitan markets has clearly been important for economic growth in both Pacific island countries and the African small island states. A lesson to be drawn is that Australia can do a lot more to improve market access for Pacific exporters.

Hi Stephen, Great blog - thanks. Perhaps you or colleagues have addressed this elsewhere but who is the ODE? It's internal to AusAID, right? So it's not independent assessment? Is that something you think AusAID needs or do you think an independent review every 5 years is sufficient. Most aid NGOs have independent evaluations for their projects - should AusAID have the same? Having AusAID staff evaluating AusAID projects for AusAID managers that they might work for in the future sounds a bit tricky... Would be interested in your thoughts. Joel

Steve's insights are very insightful and, in my opinion, very correct. The islands should be approached as any community development project should, an almost textbook approach. Consider approaches to develop micro enterprise and do not assume that islanders do not see the opportunity but face significant social constraints to entreprenership reflected by inadequate or poorly expressed public policy.

I think there are a number of wrapped issues here but all I am concerned with at the moment is the PNG context. - Firstly let me say that that the provision of a vehicle in Canberra is a very poor proxy for whether a vehicle should be issue in another country - you are comparing apples and oranges; - Secondly - let me ask how do you define "extensive private use" - maybe going to the cinema (isn't one) going for long country drives (not likely) ducking across to Lae (sorry the road doesn't go across the ranges) nightclubbing (crazy if you do). Much is made of the provision of a vehicle as if it is some sort of massive fringe benefit when the reality is that it is an essential component of ensuring a secure environment.. The problem I have with this particular issue is not so much that people make a contribution to the private use of provided motor vehicles it is that this is the same stream of thought process that has seen the non-APS adviser community largely stripped of the provision of motor vehicles without consideration of the full implications. The debate is narrowly focussed without full consideration of the implications. Well informed? Yes I wish some were!

The article that is posted here has already drawn several responses, not as comments here but as emails. Perhaps I should have posted a disclaimer. I’m not an economist, as is probably obvious to those who have read the article, but only a dabbler with a fascination in the history of economies on the world stage. Even in that area the reading list I can draw on is embarrassingly short. Most economists take a “where there’s a will there’s a way” view of national economies, while my article takes a “we’re all victims of our circumstances” approach to development. Anything is possible, most development economists posit. By the clock of world history, of course, it’s possible to imagine a radical change in circumstances. Tourists may begin flocking to Kiribati at some point in the future, or new and valuable resources may turn up off the shores of Yap, or the world may yet find the rare ingredients for a wonder drug in the coral flats of the Pacific, or the Cook Islands might become the next international call center. Maybe, but I wouldn’t count on it. Certainly not in the short term–and that is precisely how the future is defined in the Pacific. My own view is that some places are simply crippled by force of circumstances. Resources are scarce (especially the kind that can be traded on the world market), the marketing attraction of the location is offset by distance and small size, and the population is not likely to find top jobs in Silicon Valley. There are places in the world, like Haiti, whose time has clearly not yet come. Perhaps it never will. But there are other spots, like the Seychelles, who are doing much better. Is the difference simply that the economic planners in the latter did much better than in the former? Then, too, there are those places whose time has come and gone, like Nauru. You’d think that I, of all people, would believe in miracles. They can certainly happen, but most of us pragmatists wouldn’t put money on it. Meanwhile, the nations of the Pacific have to find a way of providing a costly government–not because their former colonizers told them they had to do so, but because this is what it takes to be a part of the modern world today. Education means good teachers who are getting a salary. Health means access to modern drugs and services, that are paid for in dollars or euros or yen. So the Pacific is doing what it can, under the circumstances, to hustle the money needed, even if this means packing off a third of its people to work abroad. If the jobs aren’t to be found in the islands, then send the people to where they are to be found. If there are no products to be sold abroad, then sell off-shore banking or whatever else developed countries will pay for. It’s a pragmatic approach by people who might like to believe in miracles, but don’t dare count on them.