The Intel

What is this thing called governance? Simple. It’s the skeleton of the state – its hard-core bones. Without effective governance, the body politic would crumble, public services wouldn’t be delivered, the private sector won’t invest, and lives and property would be at risk of attack.

Dear reader – kindly note we’re talking about effective governance, not good governance (often code for liberal democracy). We measure effective governance by its outcomes, not by what the systems look like, or how leaders acquire their power.

There are two common ‘arguments’ suggesting why donors should stop investing here. The first is that it’s hard if not impossible to measure, and the second is that it doesn’t work.

It’s easy to debunk the first. The problem with reaching a shared understanding of governance is that there are too many ways to measure it. UNDP’s handbook on governance indicators runs to 100 pages. My own work on ‘measuring’ governance in PNG used 114 data points drawn from 15 publicly available data sets to assess the trajectory of governance over 20 years. So, it is laughable to argue that governance cannot be measured.

The second argument? Again, wrong. Learnt over 60 years, we know that any investment is only as good as the institutional environment in which it is located. In the 60s and 70s we fixated on projects, yet underperformance was caused by failures in the sector where the projects were. So, industry swam upstream – to the sector level. More disappointment set in as we realised that sector reform could only take us so far: they require reform at the heart of government. So, we swam further upstream - reaching the source of project, program, and sector failure: the nature of governance and the role of the state. Now, there’s nowhere further left to swim – and this pool matters for development (read Dercon’s book if you don’t believe me, and for theory read North’s work).

Just because something is hard is no reason for not doing it. We are after all talking about the skeleton of the state – what keeps it going and – with any luck – moving forward. Even slowly.

The nature of international development between Australia and the Pacific, pre- and post- colonisation, has evolved over time. Over the last decade, there has been a greater shift towards the framing of a ‘partnership’ – an indication that perhaps we were entering into a period of maturity in the way Australia was now engaging with its Pacific neighbours. COVID, and the associated depletion of foreign aid workers, has further solidified a need for new approaches – ones that do not perpetuate a discredited aid as charity model, but rather respect Pacific Islander leadership and governance as central to our countries’ development or otherwise.

In the early 2000s, Australia’s efforts to provide higher level education signalled a recognition that the prosperity of small island states depended first and foremost on the development of their most valuable resource – their people. We Pacific Islanders assumed that the intention was to reduce the dependency on foreign expertise and increase the capacity of indigenous people to better govern and lead our own countries. It has now been over a quarter of a century that the aid industry has been investing in the skills and expertise of its Pacific neighbours. While this is appreciated, it’s time that Australia and other donors act on the understanding that these endeavours (higher education being one) are not goals unto themselves – just as ‘aid’ has never been the answer to any country’s ‘development’. 

To better lead our own countries, it is good governance (and good leadership) that is critical, and donor programs should support this reality. Because at the end of the day, it is we – the insiders of our own political and social systems – who know how to navigate these for positive change.

For Australia, ensuring that strong local leaders are driving all development investments would be a useful place to start.

Two reasons. First, governance is important in its own right. It sets the rules of the game for how power is exercised and held to account, whose interests get factored into decision-making and how contestation of ideas is handled. This is crucial in shaping whether development is inclusive, equitable and rights-respecting. Currently, Australian foreign policy appears to be more concerned with competing modes of governance than it has been for decades. Is the future open and liberal? Is it closed and authoritarian? These are live issues in many of the countries where the development program works, underscoring how important governance is to the shape of future world order.   

Second, governance is at the heart of every service the aid program aims to deliver. Health, education and water and sanitation – these are not delivered purely by technical know-how but require governance systems and processes to make sure they function effectively and sustainably. Take health for example: you can train nurses, build health centres, kit out facilities, but how are accountable supply chains to deliver drugs and vaccines managed? How are budget decisions made about how much funding goes to nutrition, as opposed to preventable diseases, or maternal health? These issues relate to the governance of the sector.  

But the how is also important alongside the why. A development program that imposes 1990s ‘good governance’ dogma is unlikely to work. A development program can play a role, however, in promoting principles and values that shape who development benefits and how societies themselves debate and contest those principles and values. Without a strong investment in governance – as a standalone issue and a cross-cutting one – aid programs risk treating development as a pile of bricks with no mortar. That house won’t hold.