Governance

The effective functioning of a state's institutions is central to development. Governments provide the environment for private sector development and hence growth and employment generation.

They develop laws and maintain order and stability, provide for the protection and advancement of human rights, and ensure the sustainable use of resources. They generate revenue, deliver education and health services, and redistribute income.

Weak capacity and corruption have seen some of the region's governments perform poorly, with negative impacts on poverty and stability.

At the other end of the spectrum, otherwise well-performing countries are grappling with new challenges faced by modern nation-states: potential pandemics, international trade regimes, microeconomic reform, economic integration and environmental protection.

Working on governance issues is a long-term commitment, but the economic and social benefits that improved governance can bring are enormous.

Policy framework

Australian assistance for improved governance addresses five areas:

Improving economic and financial management
Promoting public sector reforms
Strengthening law and justice
Development of civil society
Strengthening democratic institutions and processes.

Australia's focus is on supporting a country's own efforts to grapple with appropriate approaches to good governance issues.

See:

Economic and financial management

Sound financial policy frameworks and robust economic institutions are important in attracting and generating private sector activity and maximising the benefits of globalisation. Foreign aid does not, and never will, form the bulk of the resources required to promoted long-term development. Far greater are private sector resources.

Opening up to trade and investment fuels economic growth and liberalising global trade and investment makes a substantial contribution to reducing poverty. The World Bank has estimated that if developing countries were to adopt necessary trade reforms and become more integrated into the global economy, some 300 million people could be lifted out of poverty by 2015.

Australia is providing $28 million in capacity building assistance for developing countries to access the benefits of trade and investment liberalisation and participate in the World Trade Organisation and regional trading arrangements.

Public sector effectiveness

Linked closely to sound economic and financial management is public sector effectiveness. Australia has established flexible and responsive mechanisms in most major partner countries to support public sector reform.

In Vanuatu, Kiribati, Thailand, East Timor and PNG we have helped improve budget systems and planning which has led to improved accountability and more responsible government spending.

In Thailand, Indonesia and the Philippines, following the Financial Crisis, we are helping governments address key reform issues such as corporate governance and prudential supervision of financial institutions.

Law and justice

Effective law and justices systems promote regional security, increase international confidence and help attract foreign investment. Consistent with the White Paper's direction to take a more integrated approach to law and justice, Australia supports a variety of programs aimed at building the capacity and effectiveness of police, prosecutors, legislative drafters, judges, court officers and law officers.

Australia is supporting legal reform programs in Indonesia, Vanuatu, Tonga, Samoa, Cambodia, Timor-Leste, Solomon Islands and PNG. Australia supports a community justice program in Fiji which engages with local communities and informal justice systems.

Australian support is also helping strengthen police forces in Solomon Islands, Vanuatu, Samoa and Tonga by building organisational capacity and introducing community policing approaches.

Australia cooperates with other donors and Pacific institutions to deliver regional programs aimed at developing police forces, courts, legal institutions and corrections systems.

Achievements

Recent achievements of the aid program in the area of governance include:

Stronger planning, budgeting and financial management in Papua New Guinea's provincial administrations through the Provincial Financial Management Training Program. The program has trained over 9 500 administrators from all provinces in Papua New Guinea over six years.
Strengthening public sector accountability and transparency through:
- the publication in Solomon Islands of several independent audits by the Office of the Auditor-General
- bolstered capacities of the Leadership Code Commission and the Ombudsman's Office through the provision of Australian advisory assistance.
Improving public sector performance by piloting performance and merit-based selection for senior public sector positions in Chengdu and Guangzhou Provinces in China under the China-Australia Governance Program.
Increasing electoral awareness and understanding for Solomon Island citizens through village-based civic education programs in all provinces.

Aid stories and people

Examples of Australia's aid program in action:

Related websites

2007