Who receives Australian aid and Why?

The bulk of official development assistance (ODA) from Australia is provided to Asia and Oceania. Indonesia and Papua New Guinea together account for nearly a quarter of the total. Physical proximity to Canberra and large receipts of bilateral aid from the United States is a significant determinant of who receives this aid. The level of poverty is (statistically) a significant determinant of aid allocated by Canberra only after recipients have been chosen.aid

Rolling RAMSI forward: some ideas from the literature

A key challenge for the Regional Assistance Mission to the Solomon Islands (RAMSI) is accelerating the rate of growth of the economy. For this to happen, various economic reforms need to be implemented. While some of these are in train, many remain within the long and sometimes windy pipelines of the bureaucracy. Here we draw lessons from the extant literature on aid, economic growth and the political economy of reform. We also consider the need for the ‘deep-rooting’ of independent institutions that can mediate between vested interests as part of the reform process so as to ensure its sustainability. These lessons could be particularly pertinent given new administrations in Solomon Islands and Australia, who are keen for new ideas to accelerate the pace of development. Among our recommendations are the support of institutional structures that help build constituencies for reform and more effective types of assistance that are non-financial but which generate real economic benefit

How Soon Can Donors Exit From Post-Conflict States?

When can a donor (successfully) exit from an on-the-ground presence in a post-conflict state? The answer, according to the analysis presented here, is in decades: figures well beyond what was originally envisioned when peacekeeping troops were first deployed. In the specific cases of Liberia, Mozambique, Solomon Islands, and Timor-Leste considered here, the best case scenario for successful exit ranges from 15 to 27 years. Successful exit, for the purposes of this paper, entails the creation of the necessary fiscal space to fund the recurrent budget from internally generated revenues. This is a necessary, albeit, not sufficient condition for donor exit. Of essence, however, is the time rather than the dollar value of support provided. An extended donor presence, it is argued, provides the space for the creation, sustenance, and maturation of institutions that are finally able to undergird the state from rolling back into state failure on donor exit.Post-Conflict reconstruction; Public goods; State-building

Facilitating adjustment to the sugar woes in Fiji

The resolution of problems with lease renewals in Fiji, particularly in the sugarcane districts, has ramifications for private investment and growth in the entire economy. The impending withdrawal of subsidies to sugar as world trade is liberalised has increased the urgency of finding solutions to these problems. This paper draws on game theory to characterise the problems facing the Fiji sugar industry. The incentives for land and ethnic politics are identified. Separate proposals are put forward to facilitate secure access to land and to minimise adjustment costs from the erosion of preferences under the Sugar Protocol. The rationalisation forced upon the sugar industry if managed well, could induce land reforms that could improve the investment climate and the prospects for growth, whilst minimising pains of adjustment

Skilled migration and brain drain

This paper discusses the issue as to whether or not emigration depletes the stock of skilled workers in the country from which workers emigrate. Some proponents of the thesis that emigration leads to brain and skill drains argue that the country involved should not allow trained workers to emigrate. This paper argues that ‘trapping’ skilled workers is more than likely to be counter-productive, and concludes that if the emigration door is shut, the stock of skilled personnel is likely to fall in the source nations. The promise of jobs and higher income, particularly in a rapidly integrating global marketplace for skilled workers, provides individuals with the incentive to upgrade their skills, and this leads to investment in human capital in the source country. A ban on emigration of such workers will dissuade training in the skills and professions that are in demand globally.peer-reviewe

Labour mobility for sustainable livelihoods in Pacific island states

The chellenge of guaranteeing sustainable livelihoods in small isolated Pacific island communities remains a contested issue. Rising poverty within some of the Pacific island countries gives urgency to considerations of sustainable livelihoods. The increasing reliance on donor support for provision of basic services in a number of the Pacific island countries raises serious doubts on the sustainability of the status quo. This paper assesses the seriousness of the sustainability challenge and provides avenues to addressing this challenge. Rapid population growth with limited natural resources, renders subsistence as a dwindling source of livelihood in many of the Pacific island countries. Increased labour mobility for the region as a whole, thus, has considerable merit

How misaligned is the Australian real exchange rate?

This paper uses quarterly data from September 1981 to December 2000 to quantify the extent to which the Australian real exchange rate is misaligned relative to its long-run equilibrium value. Our modelling suggest, that as of December 2000, the real exchange rate was seven percent below its equilibrium value; this figure is modest in comparison to purchasing power parity indicators that suggest considerably greater misalignment. Furthermore, once short-run dynamics are accounted for, even this anomaly disappears