AusAID reform: What’s at stake for implementers

With developed country governments under tremendous fiscal pressure across the globe, leaders and parliaments continue to evaluate their foreign assistance programs. In some countries, this has meant cutting aid levels and at least publicly discussing the idea of pivoting away from the traditional contracting model on which bilateral aid agencies have come to rely.

When it comes to aid spending, Australia is in the fortunate position of being the exception: with a strong economy and national balance sheet, the country is substantially increasing, not cutting, its foreign aid budget. As a result, it is now seen as an important future source of funding for American and European development consulting companies and non-governmental organizations that face budget cuts at home.

Even as it increases its aid budget, Australia too has joined the global chorus for aid effectiveness and is now taking stock of its development assistance policy. Following a government-commissioned, yet decidedly independent review of Australia’s aid program in late 2010 (the first in 15 years), AusAID has embarked on a mission to alter and improve the way it disburses aid.

The review was precipitated by years of allegations, made in both in Canberra and on-the-ground where the money is being spent, that Australian foreign assistance was misguided and mismanaged. At least one specific impetus behind the review was a series of investigative reports over the past two years on excessive AusAID consultant salaries.