Comments

Thanks Satish, your excellent 2007 paper, which can be found <a href="http://peb.anu.edu.au/pdf/PEB22-1chand.pdf" rel="nofollow">here</a>, is a must read on the importance of governance, including combating corruption and government effectiveness, for growth. <blockquote>This paper argues for improved policy choices for growth of incomes as the priority for a reform-minded Papua New Guinea government due to take office following the elections in mid 2007. Amongst the policy initiatives are a committment to improved governance including a campaign to clean up corruption; greater investments in public infrastructure to deepen the trade and cultural bonds between the disparate parts of the nation; concerted efforts at reducing the costs of doing business to raise the level of investment and employment generation; and placement of an arms-length, results-based, evaluations and monitoring framework to track progress on each of the above-mentioned. Some thoughts on the role an active donor community could play are also provided</blockquote> I agree with you that the rate of growth has picked up in recent years, but this does not appear to be correlated with improved governance (at least not positively--see chart.) <img src="http://dl.dropbox.com/u/6190378/Screen%20shot%202011-04-19%20at%204.51.13%20PM.png" alt="" /> I agree with you that the link between growth and governance should hold for longer-term growth. However, this short-term upturn in growth can largely be explained by the upturn in commodity prices and investment in the LNG project. For welfare and longer-term growth, the important link is between governance and the delivery of basic services and investments in infrastructure.

PNG has never been short of excellent plans and superb policy recommendations. For Matt's information, I had created the Botswana, Malaysia, and Nigeria scenarios for PNG that was published in the PEB in 2007 (volume 22 (1); pages 70-82). The billion Kina question is if these excellent plans in the form of the PNGDSP and MTDS will ever be fully implemented. The past does not provide reasons for hope, but things may have changed in PNG. The rate of economic growth has!

Here is the powerpoint presentation on the PNGDSP from last year's Executive Update. http://peb.anu.edu.au/pdf/2010/PNG/policy_seminar_ppp/joe_kapa.pdf  

Thanks Peter - great comment.

Clara and Russell, Thank you for producing a summary of Papua New Guinea's Development Strategic Plan (DSP) and Medium Term Development Plan 2011-2015. There is a lot of interest in both of these development policy documents and your article will encourage people to read further and continue the discussion. The PNGDSP and MTDP set out ambitious targets for development in PNG. Meanwhile large revenues from the LNG sector open up a range of possibilities. One scenario is that the PNG government invests revenues well: allocating resources to services and programs with high economic and social returns, and implementing these both efficiently and effectively. As you point out, this could also be called the Malaysia scenario. Another scenario is business as usual. Misallocations of resources continue, implementation remains weak and fragmented, and services suffer. (My blog on the <a href="https://devpolicy.org/spending-wisely/" rel="nofollow">2011 budget</a> is along these lines.) In a worst case scenario, Papua New Guinea could experience a full blown resource curse, characterised by rising corruption and waste, loss of competitiveness, and possibly conflict. We could also call this the Nigeria scenario. While the PNGDSP and MTDP present a case for the first of these scenarios, the second two are possible, and some would argue more probable. In discussing the PNG government's new development policies, there are several questions that we might want to consider: 1) Are the policies set out in the DSP and MTDP likely to lead to the results envisaged? Do they represent good value for money? 2) Does the government have the capacity to delivery the DSP and MTDP? If not, what can it do to create an enabling environment for other partners (NGOs, churches, companies, donors) as part of a broader service delivery system? What is the role of aid? 3) Given that so much depends on implementation, what can be done to strengthen the accountability of service providers (and MPs?), especially to the people who are supposed to be receiving services? And what can be done to strengthen feedback from recipients to Planning, service providers and MPs on the availability and quality of services? (Also see <a href="https://devpolicy.org/feedback-on-png-development-plan/" rel="nofollow">Paul Barker's blog</a> on this.) These are just a few questions, to get a discussion going. Once again thank you for producing the summary of the DSP and MTDP and the documents themselves can be found <a href="http://dl.dropbox.com/u/6190378/PNGDSP%202010%202030.pdf" rel="nofollow">here</a> and <a href="http://dl.dropbox.com/u/6190378/MTDP%20final.docx" rel="nofollow">here</a>. Will PNG follow a similar path to Malaysia or Nigeria, or muddle through? I hope it is the former, and that's why we need a full discussion of policies, implementation and accountability.

Terence's piece gets right to the heart of a serious issue that confronts all donors, including NGOs. The DAC has created a beauty parade by publishing data on the proportion of each donor's ODA that is spent on management; donors respond either by cutting their management costs or, as Matt has pointed out, by massaging the figures to hide some of their management costs. And some NGOs try to attract more contributions by touting their relatively low spending on management. Yes - every cent spent on management means one less cent spent directly on the poor. And some bureaucracies are bloated. But let's get this in perspective. If I'm told that an airline can charge low fares because its overheads are low, I'm immediately prompted to wonder whether the low overheads include cutting corners on aircraft maintenance. The same applies to aid. Some forms of aid can proceed with very low overheads - AusAID could, for example, cut their management costs to virtually nothing: one person to sign cheques to be sent off to recipients. End result - budget spent, overheads virtually zero. That is why budget support is often attractive to donors. But, of course, the overheads have simply been transferred to the recipient government (unless the cheque simply goes into a Minister's Swiss Bank account). So let's get the business of "small is good" in proportion.

At the opening of the Regional Development Forum in Lae last Thursday the former Treasurer and local Member, Bart Philemon, highlighted the great skepticism with plans in PNG, listing a long series and their serious lack of application and complete lack of subsequent evaluation, to provide feedback to subsequent planning. I was able to point out that there had been a review of the MTDS 2005-2010 (a strategy which had provided some useful focus but could have been markedly more effective if applied more seriously notably with tangible resources); however, the review (undertaken by ANU's Ron May) never saw the light of day, with it's presentation being cancelled on the morning it was meant to be held! once again a valuable opportunity for consultation wasted, but again an apparent fear of constructive criticism, or perhaps feeling that the process was irrelevant, as a newer model of plan was now being launched....which all smacks of a serious discord not only between some central planning agencies with the wider public, but also with the other Government agencies, which needs to be addressed if resources are to be planned and managed more effectively in future.

Thanks Satish, I agree with you that we need to think about the problems of planning, and the poor quality of data. I'd add that these two issues go hand in hand. If the planning process builds in and encourages better feedback from stakeholders, as Paul suggests, then this can help planners to verify and improve data. Part of this is for the government to make information and data more readily available. Government collects large amounts of MIS and survey data--very little of which ever sees the light of day. Making data publicly available is a necessary step to enable stakeholders to help government to identify errors and improve data collection processes. Similarly, stakeholder feedback is essential for the design of policies to tackle complex issues. Yet key reports, such as the evaluation of the MTDS, the DSP and MTDP, are not yet readily available and this impedes public discussion. Publication of these reports on the <a href="http://www.planning.gov.pg/" rel="nofollow">Planning website</a> would help raise awareness of the government's thinking and encourage valuable feedback--e.g. from NRI, INA and CIMC--that would help planners and policy-makers.

Paul's critique of the DSP is on two fronts. It would help to think of these as, (i) on the problems of planning itself, and (ii) on the poor data used in the models to generate forecasts. On the first, plans have moved from tallying outputs to the creation of incentives as part of economic reforms geared at raising production and productivity. As one example, lower transportation/communication costs and security to property and person raises returns to investment and effort. The DSP tries to quantify the impact of these changes on production and income. On the second, poor data is a perennial problem in all developing countries. Addressing this deficiency requires investments into data collection, and finetuning of the parameters used in the plan. So let us be clear on which of the above deserves attention.

Thanks Claudia - an excellent comment. The other thing I think worth noting is that, in in many countries, most aid from government aid agencies flows through the partner government. To my mind the main reason for wanting information on this type of aid flow to be pubicised is that it helps citizens in aid recipient countries hold their own governments to account. (Which is a type of feedback but perhaps a little different from what we think about when we talk about aid project feedback). What would be interesting would be to see how resistant (or not) aid recipient governments might be to this type of transparency. They quite probably would be (at least in more poorly governed countries) which could be a potential hurdle. But as no one really seems to have pushed this yet, we don't know. And it at least seems worth a try.

Thanks Peter, In a range of areas, thus far I think the Minister's main achievements to date have been to do the exact opposite of what he's stated he was going to do. So, while he's spoken boldly of reducing overheads, they've actually gone up. Similarly, he scrapped the Koha fund in the name of transparency and efficiency, and replaced it with a fund that currently can't get money out of the door and is now to be overseen by three political appointees.

Thank you Terence for your post! I feel very much "at home" with this discussion. You are right, why on earth is aid transparency at project level, accountability towards beneficiaries not done? Take the example of the International Aid Transparency Initiative (IATI). The whole process is very encouraging on the one hand - donors agree an international standard to publish more detailed and timely information. But the standard is far from providing "full disclosure" at project level. It does not demand information, that would allow citizens at project level to know what exactly is going on in a project. Even this transparency standard is a big challenge for donors. At the outset of IATI there was a workstream on accessibility, which was supposed to assure that information published according to the IATI standard would actually reach citizens in partner countries. There has not been much progress in this workstream - partly because donors see their responsibility limited to providing the data. I think transparency at beneficiary level involves two major challenges. 1) For transparency to be relevant and useful at beneficiary level and to encourage feedback it would have to be far more comprehensive than e.g. IATI. So transparency at this level is more difficult and demands more courage for openness. For donors, tax payers in donor countries and researchers general information about a project may suffice. For citizens at project level details matter. 2) If detailed information at project level were given, citizens could provide detailed feedback. But how can such feedback be incorporated into existing project procedures? What if feedback challenges the project policy - is a project manager willing and able to change a project policy? What would happen to scheduled disbursements? Critical feedback may upset a smooth running system and cause a lot of additional work and hazzle. Aid transparency at beneficiary level is only the first step in creating a new culture of accountability. If donors are not willing to change the way they work and to allow citizens' feedback to have an impact on their processes, it is understandable why they are not keen on doing the first step.