Why are aid projects less effective in the Pacific?

Abstract

Motivation The Pacific is the world’s most aid‐dependent region, yet available data suggest aid projects are less effective on average in the Pacific than elsewhere in the developing world. Purpose This article examines the most likely explanations for lower aid project effectiveness in the Pacific. Explanations include poor governance, restricted levels of political freedom, poor economic performance, isolation, and small populations. Methods and approach Three approaches to causal mediation analysis are used to identify which explanatory variables best explain why aid projects are less effective in the Pacific. Aid project effectiveness data come from a multi‐donor dataset of individual aid projects. Data on potential explanatory variables comes from a range of international datasets. Findings All three causal mediation approaches point to the isolation of many Pacific countries, alongside comparatively small populations, as being the main impediments to project effectiveness. These findings hold even with a suite of project traits being controlled for and within an analysis in which all the key country variables of interest are controlled for. Policy implications Project effectiveness in the Pacific appears to be primarily constrained by variables that cannot themselves be shifted (the region’s countries cannot readily be made less remote or more populous). Improved project effectiveness in the Pacific will require donor practice to carefully adapt to the region’s context. A structured process of donor learning will be needed.

How can aid be decolonized and localized in the Pacific? Yielding and wielding power

“…The issue of geo‐strategic distraction, is seemingly more and more inevitable in the current context of escalating geo‐strategic insecurity, and which underpins Australia's defence discourses. This further undermines the effectiveness of aid and development in the Pacific, because interests tend to be weighted with “mixed motives,” as Wood et al (2022, p. 21) aptly put it. An example would be Fiji's Black Rock military and defence facility, which was rebranded by the Australian government as a Peacekeeping and Humanitarian Assistance & Disaster Relief Camp, after the Chinese had demonstrated keen interest in supporting the development of such a camp (Ivarature, 2023; Tarte, 2021).…”

“…The Pacific region houses 10 of the world's most aid supported countries (Wood et al, 2022). Australia is responsible for 43% of all Pacific aid (Lowy Institute, 2023), but other significant multilateral organizations such as the World Bank, the Asian Development Bank and other countries have a significant imprint in the region.…”

“…Australia is responsible for 43% of all Pacific aid (Lowy Institute, 2023), but other significant multilateral organizations such as the World Bank, the Asian Development Bank and other countries have a significant imprint in the region. Moreover, foreign aid, its effectiveness or otherwise (Wood et al, 2022), so contested and political, is an inevitable component of development in the Pacific. However, it is instructive to note that the ecosystem of international development is premised on historical and racialized structures of domination (Tawake et al, 2021).…”

Wansolwara: Sustainable Development, Education, and Regional Collaboration in Oceania

“…In a first-of-its-kind study, Wood et al (2020) address the problems of aid project effectiveness in the Pacific by using causal mediation analysis of aid effectiveness at the project level. Utilizing statistical analysis of project level performance, they find that the "remoteness and small populations of many Pacific countries appear to be the main constraint on aid effectiveness in the region" and identified that "on average, the countries of the Pacific are better governed and freer than the rest of the developing world (at least as captured in standard measures)," which they conclude is linked with diminished effectiveness of aid (2020, 13).…”

Challenges and opportunities with social inclusion and community‐based water management in Solomon Islands

“…The provision of water and sanitation services in Pacific Island countries (PICs) is among the lowest in the world—only half of the population use improved drinking water sources and only a third use improved sanitation (WHO, 2016). An added challenge is that aid projects in the PICs are regarded as less effective than other parts of the world (Wood et al, 2021). In Solomon Islands, despite efforts by the government and aid organizations, the provision of sustainable and appropriate water, sanitation, and hygiene (WASH) services remains poor.…”