Comments

Dear Luc Thanks for your thoughtful response to our post. I agree that the term ‘innovation’ is overused across many sectors of society. We have seen a wave from the sources of economic growth being ‘information’, to ‘knowledge’, to ‘innovation’, to I suspect now moving towards ‘entrepreneurship’ (think of Obama’s JOBS Act). I agree that there are many forms of innovation – some radical and ‘new’ to a field, but others far more incremental, and as you suggest, perhaps focused on improving current systems and services. In regards to mobilizing private sector investment, the global ground swell around impact investing and the rapid take up of Social Impact Bonds (even though preliminary results are only just filtering in) makes me optimistic that there are many investors out there who are actively seeking financial and social return. Stanford Social Innovation Review reported on studies that showed such potential. For example, with the transfer of $30 trillion in wealth from Baby Boomers to Millennials, that <a href="http://www.ssireview.org/blog/entry/millennials_will_bring_impact_investing_mainstream" rel="nofollow">50% of Millennials</a> wanted to use their wealth to help others. I think this mobilization of capital will indeed stand beside existing foreign aid programs, bilateral and multi-lateral. I agree with your point that better collaborations and connections amongst stakeholders are also necessary – not necessarily more committees, but structured and active platforms and mechanisms that assist in doing this, such as Social Stock Exchanges and DFAT’s proposed Innovation Hub. Kind regards Danielle

Danielle and Mel, Great piece and very timely! It's interesting that the countries that could benefit from these new models, and not sure this is something that would apply to all opportunities, BUT on the receiving end of "aid/investment" this is still news. I teach at two very well known universities and none of the other universities actually are introducing students to these new concepts. Governments as well as organizations at all level are still in the mindset that Official Aid is here to stay. Several countries have managed to move to Middle Income Status but at what price? The somewhat known -- Middle Income Trap -- to good to be poor and not rich enough to compete. The OECD measurement method to categorize a country status when it comes to growth could be compared to the original "Human Development Index". The development world eventually realized that the HDI wasn't the best tool to evaluate poverty levels and now have opted for a MPI. Maybe the OECD could also move to a more useful ways to qualify countries...something like the Multidimensional Poverty Index. The majority of MICs are not prepared to move from traditional aid to private aid. A recent article from CGDEV and the Brookings Institute highlighted the problem with Official Aid...with 26 donors, countries still have to deal with fragmentation, duplication, and waste. How would these new source of funding change the landscape or further continue to fragment development efforts. There aren't much discussions about capacity building efforts that would come with innovation. The problem is rarely money...otherwise the private sector would be doing it already. What is the incentive now that would move the private sector or private investors in this sector? Did the world of investment changed so drastically that they would be prepared to risk their own capital for "social good"? What could Australian Aid do different? Will they go where investors are not interested or they will also look for the next Facebook in development? Is this "innovation" something sustainable or just a "fad"? I think the term "innovation" is overused in development. Is what you describe qualifies as innovation or improvement? -- Innovation differs from improvement in that innovation refers to the notion of doing something different rather than doing the same thing better (source wikipedia). I believe that the opportunity lies in connecting all stakeholders instead of finding a bunch of new ways of doing the same thing ....and not sure it will end up being better at the end. Yes we can demonstrate success...but I can also talk about success when one person survives a plane crash!!

Integration brought with it uncertainty for the local O-based staff (now LES). At the same time it also brought with it opportunities for the local staff. Change is a process that has to be properly managed to mitigate consequences and/or expectations. Change with Integration brought with it realization amongst local staff that they should start consider other opportunities outside of the new DFAT. In fact ALL local staff should thank DFAT (or former AusAID) for bringing them this far with the skills they've developed. I am Local Staff with DFAT at Sols Post. I see Integration as an OPPORTUNITY to explore beyond!

I wholeheartedly echo earlier comments on the importance of national staff in managing, implementing and guiding Australia's aid program. I am seeing the same thing happen in other countries where the aid program works, not just Indonesia - this loss of expertise that will only leave the aid program weaker. It's good to see that this critical part of the AusAID abolition is being discussed, and I can only hope that such discussion will have an impact where it really matters.

Thanks Margaret for this research presenting data which I guess you are still developing. Though i would like to drop a lot of remarks I will just stick to the expat-nationals salary disparity in the extractive industry. The idea that the industry hires 92% Nationals and 7% Expats is a misnomer when you look at how much cash spin-off actually reaches the wider PNG households. If you take the average annualiseed wage of the nationals and expats and compare the disparity, you will come to realize that the 7% consumes 58% of the total manpower budget and the 92% nationals you boasted only receive 42% of the manpower budget in any given year. Get some more data and you will prove this. That's when you will realise that you will need to amend some of your remarks with respect to the 'benefits' the mine represents for the wider PNG Community. Not everyone benefits from the royalty pay outs.

Hi Joel This is quite an interesting topic, thanks for writing about it. I would definitely agree - "the link between scholarships and poverty reduction can be questioned" (despite thinking that scholarships are a really valuable part of the aid program). The scholarship itself and the individual it targets might not be an example of a poverty reduction activity. In my opinion, it's what the person goes on to do afterwards and the choices they make that create development outcomes. The action the person takes over the next twenty or thirty years in their career (as a result of learning on-scholarship) would foreseeably impact on poverty reduction in their home country. The scholarship can become the means for the individual to make greater contributions and add more significant value during their career/lifetime. That's one reason why effective awardee selection processes are so important. The masters/PhD program is not the catalyst for change, it's the individual that creates the change. Donors need to make sure the right people are selected for their scholarships, in order for the scholarship program to hold value. Scholarships don't necessarily need to go to the poorest of the poor, rather to individuals with great potential. The Australia Awards alumni network would be capturing some good stories of the short term impact of scholarships - it would be interesting to hear some of these. Cheers Jen

Thanks Joel for this post and I genuinely look forward to the follow-on posts. This is a topic that has been of great interest to me for many years through my own studies (evaluating scholarships worth, though probably not as well as you are), as well as being involved in the management of some aspects of the scholarships program/s. I still think there is more reimagining necessary. I do believe scholarships (in whatever form) can play an important role across an aid/trade/diplomacy spectrum. However, there is still the potential for some aspects of a scholarship program (when funded by an aid program) to resemble a full fee international student through a different marketing channel. In the context of the new Australian aid policy, renewed vigour for the of the role of the private sector, and for the concept of innovation, challenging status quo seems worthy of consideration...unless of course your subsequent posts signal status quo perfection...

Although I may be biased, having completed a Masters by research on this exact topic, I think it is incredibly important. In my experience, scholarships were viewed by aid researchers, academics and many practitioners as outside of the scope of aid, and thus not worthy of a their attention. They have in many ways fallen through the cracks between aid and diplomacy. Whether we like it or not, they are part of Australia's aid budget so any attention is warranted and I would argue, absolutely necessary.

Thanks for this post Robin, it raises some very important points at a critical time as we see how policy translates into actions on the ground. <a href="http://www.cgdev.org/blog/peterborough-sib-results-are-%E2%80%93-what-do-they-mean" rel="nofollow">This post</a> presents a summary of the results (so far) of the Peterborough Social Impact Bond, which feeds into the wider discussion on Social Impact Bonds. A key message: solving complex problems is hard and takes a long time

Ben and Rivandra, thanks for your excellent and candid analysis. Let me suggest a positive (unexpected) outcome out of all of this. The exodus of highly qualified Indonesians from DFAT may be exactly what Indonesia needs. In much of the developing world Aid agencies are the best places to work when it comes to 'policy work' (not development, since, after all, development policy is what Aid sending countries call policy in developing countries). These dissatisfied former AusAid staff may join local NGOs, the government, universities and even the private sector. (In a way one could argue that Aid Agencies had prevented them from joining these domestic organisations. By offering much higher salaries, professional international opportunities and the perks that come with working for Aid agencies, they may have undermined the capacity of local CSOs, think tanks, universities, and government.) What they have learned while at AusAid will probably come in handy for them and their new employers. Who knows, former AusAid staff working in government will be able to negotiate better deals with DFAT and other funders. They may use their networks to forge connections that bypass aid entirely (see unmediated aid suggestion <a href="http://wp.me/pYCOD-1m3" rel="nofollow">here</a>). New researchers at Indonesian think tanks will be better at accessing funding, too. This happened in Latin America. When DFID left, many of the local staff went on to lead new initiatives and work in government. Much of the impact that their work on governance, identity and social exclusion had, for instance, was due to this 'migration'. I think that this 'migration' out of Aid agencies will happen in countries like Indonesia anyway. Ad they grown and develop and their political communities offer more and more interesting opportunities policy wonks will prefer to join Parties, ministries, CSOs, universities, think tanks, consultancies, etc. It makes perfect sense. And it could be seen as an unexpected positive consequence of the AusAid/DFAT reforms.

Well 'spoken' Ben and Riv - such true words - when I have worked in Indonesia the local staff in Indonesia have proven their worth many times over. They have provided the important context and the necessary continuity - and, as you say, they are some of the best and brightest. Let's hope our Government comes to its senses before it is too late

Thank you Ben and Rivandra. The very best mentors throughout my working life have been the locally engaged AusAID staff in Sri Lanka, PNG, Fiji, Solomon Islands, and other places where I have had the privilege of having worked. Their nuanced understanding of the political economy, and the peace conflict dynamics have made my job so much richer, and easier. During the past six months I have had many conversations with locally engaged staff who are demoralised and outraged by their sudden change in circumstances. These are the people that the Australian government need in order to deliver ODA successfully, not fly by nights like myself who drop in and out of countries.