Comments

Great discussion. From a quick read of the review document and Government reponse, I find it puzzling that environmental sustainability and climate change did not seem worth mentioning. And while the strong endorsement of "predictable, multi-year funding" is extremely welcome, the documents read as if sectoral and general budget support was not part of the international development framework at all. If we are serious about country ownership, avoiding fragmentation, and improving the administration and delivery systems for the essential services that save lives, then surely we have to be looking carefully into providing more aid as budget support. Regarding the points made in this post, I largely agree that the focus on essential services and saving lives is a good way of framing the first priority of the aid program. However, @Chris, I think the point you make at d) is strong. What counts as spending to save lives is not always obvious, immediate or easy. I think that the relatively poor progress on the maternal health MDG highlights both Garth's point that insufficient funds are being invested *and* Chris' that the inter-related and negatively-reinforcing systems of poor governance, discrimination, lack of access to services and infrastructure are part of the story of "health" for women. @Chris, I'm not sure that I see the force of your objection in c), though. How is arguing for greater emphasis on "health" and "saving lives" necessarily abdicating responsibility for leading a process of education and transformation in Australian understanding of and attitudes towards development issues? Surely it could just serve as an (intellectually and emotionally) accessible doorway to enter into that journey of discovery?

I too have written on this at Inside Story, responding only briefly to Hugh White's comments; see: http://inside.org.au/cause-and-effectiveness/ Michael

Hugh White's article is generating some great constructive debate on the issue! Have a look at Annmaree O'Keeffe's <a href="http://www.lowyinterpreter.org/post/2011/07/20/Theres-more-to-development-than-money.aspx" rel="nofollow">critique</a> on the Lowy Interpreter for another opinion on the importance of Australia's aid program.

Hi Satish, Thank you for an interesting blog post. And for what promises to be an interesting paper. I look forwards to reading it once I'm back in Canberra. At this point I just want to highlight what appears to be a minor shortcoming of your work - something that is common to a lot of papers that examine the determinants of aid allocation. This is that you appear to have (and please correct me if I'm wrong) regressed total aid to a country (the dependent variable) against quality of governance (one of the independent variables). Yet, I would argue that the more appropriate comparison is total aid delivered to the government of a country (DV) vs quality of governance (Indep Var). I suggest this because there is a strong correlation between poor governance and poverty. Meaning that from a poverty targeting perspective it makes sense to give aid to poorly governed countries, even while we might doubt the wisdom of giving aid to the governments of these countries. When Sarah Bermeo undertook an exercise disaggregating aid into flows to governments and flows delivered outside governments she found that, on average, donors did actually give less aid to the governments of poorly governed countries, often compensating for this by giving more aid to NGOs etc. She also found that this strategy paid dividends in terms of poverty reduction. Her working paper is here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1681104 cheers Terence

Garth, I still think you've reduced the problem too much to one of resources -- specifically a target for aid to health. It also seems to let AusAID off the hook too easily: achieving a spending target is much easier than actually saving lives, which would require AusAID to present compelling evidence on the impact of aid. (And the Aid Review cites evidence of instances where spending targets have actually undermined aid effectiveness.) A good interpretation of Owen Barder's analysis is that aid works, but that it could work a lot better, which is why he provides a useful ten point plan on how to improve the effectiveness of aid: 1. Spend more aid through the multilateral system. 2. Make aid more predictable. 3. Make aid transparent, accountable and traceable. 4. Build the accountability of governments to their parliaments and citizens 5. Focus on results and simplify aid 6. Invest more in global public goods, especially new technologies 7. Focus aid on women and girls and chronic poverty 8. Leverage the private sector 9. Use innovative finance to increase the productivity of aid 10. Learn more and fail safely This list could also useful for a discussion of how Australian aid can save more lives..

In response to Garth’s article and in the spirit of healthy inter NGO debate I think it is worth noting the following risks in running this type of argument: a. it potentially undermines the case that developing countries and their citizens, rather than donors and aid advocates, should be in the driving seat regarding sectoral spend, b. the focus on saving as many lives as possible can play into an impatient, non-strategic, unsustainable agenda. If this approach was really driving the aid program why not simply spend all of the of the aid budget on emergencies, now? c. the idea that this is the sort of program that will garner the ‘greatest support’ from the Australian public seems to abdicate responsibility to take Australians on a educational journey and to enhance their understanding of effective development, and their (positive or negative) contribution to it, as well as their deeper engagement in promoting positive social change, d. it could contribute to a fragmented approach to development. Fixing maternal mortality in PNG is not just a matter of support to the health sector, as important as that it, it is also a matter of gender inequality and associated gender based violence, it is a matter of governance, corruption and weak civil society, it is a matter of poor infrastructure, and a just distribution of mining royalties etc etc. A narrow short term sectoral focus on health is not going to address these social economic and political determinants of the problem. Haven’t we moved beyond a stale debate about whether its aid vs trade (Hugh White in today’s Age), or whether its health vs economic development? Chris Roche, Oxfam Australia

No Matt, the problem is not simple but the evidence is clear that aid can improve essential services such as health,water and education for people. There is less evidence that aid can predictably improve governance or generate sustainable economic development. Owen Barder provides a recent brief summary at http://www.cgdev.org/content/publications/detail/1425286. The experience over the last few years with vaccines, bed nets, AIDS treatment is that aid has been able to improve and save the lives of people in a wide range of physical, social and political environments. Of course not all health projects are perfect, but overall, as these programs have shown, the main obstacle to preventing the deaths of millions of people is now the lack of finance. I am not advocating that all aid be spent on essential services such as health, but that Australia's aid program should ensure in the development of its country plans that the provision of essential services is the first priority. Of course other sectoral areas are also important and contribute to the adequate provision of essential services, but based on the historical experience of Australia's aid program there needs to be an operational strategy in place to ensure that essential services are not underfunded. The other important reason to broadly reach our fair share of total health aid funding is that,just as with climate action, Australia is much more likely to generate action by other donors and developing countries when we are seen to be doing our share.

In this article the problem is simple: donors aren't giving enough aid and as a result millions of people are dying. According to the post, the solution is also simple: spend more aid on health and set targets for the amount Australia should contribute (e.g. 20% of Australian aid or $1bn p.a.). In another <a href="http://www.theage.com.au/opinion/politics/were-not-really-helping-20110718-1hlhr.html" rel="nofollow">article</a> today in The Age, Hugh White argues that aid isn't helping, instead it is economic growth that is lifting people out of poverty. <blockquote>Helping people in need is a good thing to do, and there are always more people who need help. But spending money in ways that makes no difference doesn't help anyone, and there is no virtue in aid that makes donors feel good but doesn't help the needy.</blockquote> What are your thoughts on this? Who is right?

Mark Baird's reflections of the Aid Review carry weight, not just because of his extensive experience on aid and development policy, but also because of his sharp and insightful analysis. In his latest post for the Development Policy blog he gets to the crux of the scaling up challenge: consistent and disciplined implementation of the agreed reforms -- in other words, sticking to the path. I share Mark's assessment that some of the impetus will come from within AusAID, yet this alone will not be enough to achieve the Aid Review's vision. It will also need more active engagement with the aid program from outside AusAID -- to keep the aid program 'honest' and to foster 'genuine debate'. And that's why the aid transparency agenda is so important. AusAID is moving in the right direction, yet needs to be mindful that aid transparency is not just putting more stuff on the website, but putting in place systems to provide up to date and COMPREHENSIVE data on where aid is going, more detailed information on projects and better data on results, and routine publication of evaluation reports. This is important work -- and as the Aid Review report notes, it is the 'foundation' of a good aid program not an optional add on. In my view, how well AusAID delivers on this reform will be a litmus test for its commitment to implementation of the Aid Review. The Government has agreed with the Aid Review's recommendation to produce a 'Transparency Charter' by the end of the year and last week the Director General promised consultation with partners on the 2011-12 budget. Presumably AusAID will also consult on the four-year aid strategy and the medium term aid budget. These are important first steps in the implementation of the Aid Review, and it will be important keep a keen eye on these issues and share fresh ideas and feedback, including through forthcoming posts on the Development Policy blog.

And a postscript to this. The Lowy Institute is convening a panel next week (Wednesday July 20) with review team leader, Sandy Hollway, Jack de Groot, CEO of CARITAS, and Rowan Callick, The Australian's Asia-Pacific editor. In the wake of the release of the review team's report and the government's response, the discussion will look at how the aid program is placed to respond to evolving development challenges. This is linked to our paper, "The Future State of the World: what it means for Australia's foreign aid program" which was commissioned by the review team (see my blog and the Lowy Institute website) and released by the government for publication this week.

You missed us - we're there. Check out my piece which went up on the Lowy Institute's blogsite, The Interpreter, yesterday. To give you a bit of a flavour of what I say, here's a preview: "The report is a solid, comprehensive piece of work with recommendations based on sound analysis of current and emerging trends and challenges, drawing on the lessons and practices of other donors and even taking into account lessons learnt by Australia’s own aid agency. It acknowledges that Australia’s aid program is already in good shape – a point reinforced by Kevin Rudd when he released the report last week. But the aim of the review wasn’t to give the current program a brick or a bouquet. Its purpose was to advise the government on how to make the program better, stronger and more strategic as the aid budget moves towards $8 to $9 billion in 2015-2016. And the government is listening to its review team."

Thanks Jane, It turns out that we agree on much. I definitely agree that development is prone to fads, and I'm something of a SWap sceptic (although I do think that the right SWap at the right place at the right time may work well). My preferred approach for an aid agency working in any particular area would be: First do the research: find out what the binding constraints on welfare are, study what's been done in the past, and then carefully choose (from all the available options) an approach most likely to help the poor in the recipient area. I think that before the research is done everything should be on the table in terms of sectors and modalities and so on. Then run the activity carefully and monitor and evaluate it well. And then change it if it's not working. Where private sector engagement was suggested by preliminary analysis and where evidence suggests it could work, I'd be in favour of it every bit as much as I would an NGO intervention if that's what context suited. The one way that I do think the private sector is different from most other development 'tools' is in the area of donor country political economy risks. The existence of such risks doesn't mean that donors should ever engage with home country private sector agents. But - to get back to my original point - let's make sure we've thought carefully about the risks. Thanks again for your comments Terence