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Neo-liberalism and the politics ofAustralian aid policy-makingAndrew RosserPublished online: 13 Aug 2008.
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Neo-liberalism and the politics of Australian aid
policy-making
ANDREW ROSSER
Introduction
The main driver of Australian aid policy has always been the government’s foreign
policy and security objectives (Davis 2006). But to the extent that the Australian
aid program has had development-related objectives, neo-liberalism has provided
the framework for how these are to be achieved. As noted in the Introduction to
this special section, the principles of neo-liberalism have permeated key
government reports on aid policy, key ministerial statements on the Australian
aid program, and a range of other aid policy documents since the late 1970s. This
paper examines the politics underlying this situation. It suggests that the dominant
influence of neo-liberalism on Australian aid policy reflects two factors: the
interests and structural power of Australian business and the institutional context
within which aid policy-making in Australia occurs. The interests and structural
power of Australian business, it is argued, have made the Australian government,
whether under the Australian Labor Party (ALP) or the Liberal-National
Coalition, predisposed towards neo-liberal aid policies while the institutional
context has enabled the government to exclude groups who oppose these policies
from meaningful participation in the aid policy-making process.In presenting this argument, I begin by addressing some theoretical concerns.
I then examine the agendas and interests that have shaped aid policy debates in
Australia, the way in which the two aforementioned factors have contributed to
the ideological dominance of the neo-liberal agenda, and the implications of the
recent change of government in terms of the future influence of neo-liberalism
on Australian aid policy.
Theoretical Concerns
Few scholars have examined the way in which political factors have shaped the
ideological orientation of Australian aid policy. To the extent that they have,
Andrew Rosser is Senior Lecturer in Development Studies at the University of Adelaide. His
research interests include Indonesia’s political economy, the politics of state-building in Timor
Leste, the resource curse, and the politics of Australian aid policy. His work has appeared in World
Development, IDS Bulletin, Third World Quarterly, New Political Economy, Journal of
Contemporary Asia, and numerous edited books. [email protected]�
Australian Journal of International Affairs Vol. 62, No. 3,
pp. 372�385, September 2008
ISSN 1035-7718 print/ISSN 1465-332X online/08/030372-14 # 2008 Australian Institute of International Affairs
DOI: 10.1080/10357710802286825
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they have fallen into two broad groups. The first group has emphasised theinfluence of broad changes in the global political economy, the effect of thesechanges on the ideas promoted by powerful international developmentorganisations, and the way these have in turn filtered through to the Australiancontext. Higgott (1986), for instance, has explained the decision of the JacksonCommittee to advocate free trade in terms of the emergence of a newinternational division of labour, a consequent shift in many countries’industrialisation strategies away from import-substitution to export-orientation,and the emergence of governments in the US and the UK that advocated reducedstate intervention in the economy and a greater role for the private sector andliberal markets. These changes, he argued, led to a shift in the nature ofdevelopment thinking within organisations such as the World Bank andInternational Monetary Fund (IMF) away from a basic needs approach*/whichwhich had been the dominant approach to development during the1970s*/towards a neo-liberal one. The subsequent changes in Australian aidpolicy, he says, were the ‘brainchild’ of these developments.
The second group of scholars has emphasised the way in which Australian aidpolicy has been informed by Australia’s location in the global economic system,particularly in terms of the North-South divide, reflecting the influence ofdependency and world systems theories. Anderson (2006), for instance, hasargued that neo-liberal aid policies have been part of a neo-colonial attempt bythe Australian government to promote Australian business interests at theexpense of poor countries. For instance, he argues that Australian aid to EastTimor has been used to pressure the East Timorese government ‘to keep openthe opportunities for private foreign investment, and to prevent the socialregulation of that investment’ (Anderson 2003: 116), both of which he says willbenefit Australian business groups that have invested in East Timor rather thanTimorese interests. Similarly, Cirillo (2006: 5) has argued that ‘Australia’sapproach to governance aid has . . . . . evolved to emphasise the role thateconomic liberalisation and market-based development plays in facilitatingtrade capacity in developing countries*/thereby quenching Australia’s thirst forregional free trade access’ Although not explicitly set within a dependency orworld systems framework, her analysis suggests a similar link betweenAustralia’s national interests and neo-liberal aid policies.
The problem with these perspectives is that they obscure the domesticdynamics of Australian aid policy-making and the way in which these haveshaped the ideological orientation of Australian aid policy. The first perspectivesuggests that the Australian government passively absorbs its aid policies fromoutside while the second perspective suggests that Australian aid policies aresimply ‘read off’ the country’s location in the global economic system. In bothcases, they ignore the contests that have occurred over aid policy withinAustralia itself. While these contests have not, generally speaking, producedlarge demonstrations, passionate parliamentary debates, or become majorelection issues, they have nevertheless produced conflict over aid policy. To
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ignore this is to miss an important dimension of the politics of Australian aidpolicy.
To the extent that scholars have examined the way in which domesticpolitical factors have shaped the ideological orientation of Australian aid policy,they have focused on the beliefs of the individuals who have been involved in orexcluded from the aid policy-making process. For instance, Stent (1985)explained the Jackson Committee’s support for free trade by referring to thefact that the Committee included three orthodox economists and no heterodoxeconomists. But a focus on the beliefs of individuals leaves unaddressed thecrucial question of why individuals with neo-liberal beliefs were given a centralrole in this process in the first place. To understand this, we need to examine thebroader political and social context within which aid policy-making in Australiahas occurred. Specifically, we need to examine the way in which this context hascreated an imperative for Australian governments to pursue neo-liberal aidpolicies while simultaneously enabling them to exclude critics of neo-liberalismfrom real participation in the policy-making process.
Studies of the domestic politics of aid policy-making in other donor countriessuggest a need to focus on interest-related and institutional factors. Severalscholars have shown how particularistic business interests have pressuredgovernments in donor countries to use their aid budgets for commercial ratherthan developmental purposes (Diven 2001; Lancaster 2007). Others haveshown how the interests and agendas of political parties and the coalitions thatunderpin them have shaped governments’ policies in relation to the overall sizeof international aid budgets (Therien and Noel 2000; Carbone 2007). Withrespect to institutional factors, Lancaster (2007) has pointed to the nature ofelectoral rules (specifically whether or not countries have proportional voting),whether countries have presidential or parliamentary systems of government,and the location of the aid program within government as having beenparticularly important in shaping aid policy in the donor countries sheexamined. Institutions are important, she suggests, because they influence‘who sets the issue agenda, who has access to decision-makers, who decidespolicies, and who can veto decisions’ (2007: 19).
I propose that the ideological orientation of Australian aid is also bestunderstood in terms of interest-related and institutional factors. However, myapproach differs from that employed in the aforementioned comparative studiesin three important respects. First, I do not seek merely to illustrate congruencebetween the interests of particular sections of society and the nature of aidpolicy, as does Diven (2001) for instance, but also to explain why thatparticular section of society has had influence over aid policy. In other words, Ibring issues of power explicitly into the analysis. Second, my focus is on thebroader structural context rather than the role of political parties in shaping aidpolicy. ‘Partisan politics,’ as Carbone (2007) describes the latter explanatoryvariable, is not very useful for our purposes because the ideological character ofAustralian aid policy has, by and large, transcended changes in government.
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This suggests that it is the structural context that has been most important in
shaping the ideological orientation of Australian aid policy rather than changes
of government, as the partisan politics approach suggests. Third, with respect to
institutional factors, I argue that it is the ‘executive-type’ nature of this process
rather than the institutional factors identified by Lancaster (2007) that has been
the most important factor in shaping the ideological orientation of Australian
aid policy. My reasons for focusing on this factor are explained in full below.
Agendas and Interests
In broad terms, aid policy debates in Australia over the past three decades*/at
least as far as they have related to development objectives*/have been informed
by two main competing ideological agendas: the neo-liberal agenda and the
social justice agenda. Neo-liberalism has been defined as ‘a theory of political
economic practices that proposes that human well-being can best be advanced
by liberating individual entrepreneurial freedoms and skills within an institu-
tional framework characterised by strong private property rights, free markets,
and free trade’ (Harvey 2005: 2). According to this definition, neo-liberalism
‘holds that the social good will be maximised by maximising the reach and
frequency of market transactions, and it seeks to bring all human action into the
domain of the market’ (Harvey 2005: 3). In policy terms, the neo-liberal agenda
has translated into a commitment to the so-called ‘Washington consensus’ (WC)
(Williamson 1990), a set of economic policies that included fiscal discipline, tax
reform, trade liberalisation, foreign direct investment liberalisation, deregula-
tion, interest rate liberalisation, privatisation, exchange rate liberalisation, and
secure property rights. Since the mid-1990s, it has entailed a commitment to an
augmented version of this consensus*/known as the ‘post-Washington con-
sensus’ (PWC)*/that blends WC policies with a concern to promote ‘good
governance’ and ensure social conditions conducive to market-oriented
economic reform and economic growth in developing countries (Jayasuriya
and Rosser 2001). The PWC has allowed greater scope for certain forms of state
intervention in the economy (e.g. the introduction of social safety nets measures
at times of economic crisis to protect the poor) but it has been characterised by a
continued commitment to liberal markets. It has also rejected the idea,
associated with some supporters of the social justice agenda, that people in
developing countries have certain human rights that extend beyond the right to
own property and sell their labour power.Within Australia, the business sector has been the most influential advocate
of neo-liberal ideas (Argy 1998; Bell 2006). In the two to three decades prior to
the mid-1980s, there were deep divisions between business groups in Australia
over issues such as the need for free trade and labour market deregulation,
reflecting the fact that many businesses, particularly in the manufacturing
sector, benefited from state protection. But by the late 1980s, Australian
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business had increasingly come to share a ‘common front on many issues like
fiscal restraint, small government, globalisation and business and labour market
deregulation’ (Argy 1998: 232). In part this reflected significant reductions in
manufacturing protection during the 1980s and decisions by Australian
manufacturing businesses to either move their activities offshore or find ways
to compete in a more globalised economy from an Australian base. In part it
also reflected the massive growth of the financial sector in Australia as a result
of financial sector globalisation during the 1970s and 1980s. Having grown
enormously in size, financial sector business groups became an important voice
of business, bolstering those of traditional free market groups in commerce,
mining and farming (Argy 1998: 232). Support for neo-liberal policies has
generally crossed the big business-small business divide, although, as Argy
(1998: 232) notes, these two groups have often differed on issues related to
competition policy within the Australian market.Importantly, Australian business’s support for neo-liberal policies has
extended to the aid sector. Business has had an interest in the adoption of
neo-liberal aid policies to the extent that such policies have helped to open up
new opportunities for Australian businesses in developing countries and make
their existing investments in these countries more profitable. For instance, in a
recent report, the Allen Consulting Group (ACG) (2007: 20) noted that
international ‘[b]usinesses tend to be attracted to and thrive in stable, secure
environments.’ For this reason, it argued, Australian business groups should
‘advocate (and actively encourage) respect for the rule of law, property rights,
and other pro-growth institutions’ in developing countries (ACG 2007: 21), all
elements of the neo-liberal agenda. To the extent that Australian business
groups have directly sought to influence aid policy in Australia, they have
argued for precisely these sorts of changes (see, for instance, Australian
Chamber of Commerce and Industry 2005; 2007).Neo-liberal aid policies have also gained support from professional econo-
mists from a variety of Australian government, academic and business
organisations, most notably the National Centre for Development Studies
(and its successor institutions), the Research School of Pacific and Asian Studies
(both at the Australian National University), and the Centre for International
Economics (CIE), a Canberra-based consultancy. Finally, as noted above, the
three major political parties in Australia*/the ALP, the Liberal Party and the
National Party*/have also been strong proponents of neo-liberal aid policies, at
least since the early 1980s. When in government, all three political parties have
sought to use aid policy to pursue foreign policy, security, and commercial
objectives as well as developmental objectives (Davis 2006). And there have
been some differences between them in relation to how aid has been used in this
respect1. But the three parties have remained at one in relation to the ideological
orientation of Australian aid policy, regardless of whether they have been in
government or opposition.
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The second agenda that has informed aid policy debates in Australia in recentdecades*/the social justice agenda*/has been characterised by a concern withissues such as the basic needs of the poor, the protection of human rights, andthe equality of income and wealth distribution. A key part of this agenda hasbeen a belief that economic globalisation*/and the neo-liberal policies that haveproduced it*/have worsened inequality, undermined social cohesion, andharmed the environment. In contrast to neo-liberals’ support for competitivemarkets, then, supporters of the social justice agenda have argued that states indeveloping countries should intervene in targeted ways to address theseproblems (Oxfam 2001; APHEDA nd) rather than rely on the so-called ‘trickledown’ effect, as neo-liberals advise (Kilby 2007). With respect to the role of thestate in promoting economic development, they have argued that there aremany paths to development and that developing countries need to build strongstates before embarking on economic liberalisation (World Vision 2002). Otherconcerns*/particularly over the past decade or so*/have included debtforgiveness for developing countries, reducing the risk of international financialinstability by reducing international capital mobility, and the creation of a fairerinternational trading system through reform of the World Trade Organisationand more widespread use of the principles of ‘fair trade’ (World Vision 2002;Oxfam 2001). For some supporters of the social justice agenda, the idea that thepoor have basic rights has been important while others have been motivatedmore by Christian notions of charity. Either way, they have been critical of theneo-liberal agenda and have accordingly sought to promote reform to theexisting policies and institutional structures of Australia’s aid program,although some who have been influenced by dependency theory have at timesadvocated a more radical approach (Blackburn 1993: 69�91).
Within Australia, the main proponents of the social justice agenda have beendevelopment NGOs that engage in advocacy work as well as service provision,those carrying out just the latter tending to avoid debates over the respectiveroles of state and market in development, the extent to which the poor have‘rights,’ and the broader trade and foreign policy issues that affect aid policy2.Oxfam Australia (formerly Community Aid Abroad), a secular developmentNGO that currently espouses a rights-based approach to development; WorldVision, a Christian development NGO concerned with social justice issues;AIDWATCH, an NGO that monitors and campaigns on Australia’s aidprogram; APHEDA, the development arm of the Australian Council of TradeUnions (ACTU); and the Australian Council for International Development(ACFID), the national umbrella organisation for development NGO, have beenperhaps the strongest supporters of this agenda within the development NGOcommunity. The social justice agenda has also drawn support from someacademics in Australian universities, particularly ones operating within the‘critical tradition’ in development studies3, progressive minor political partiessuch as the Australian Democrats and the Greens, and minority elements withinthe major political parties. The progressive minor political parties and minority
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elements in the major political parties have been particularly important allies
for the advocacy-oriented development NGOs in as much as they have been a
key conduit through which the latter have been able to have issues of concern to
them discussed within parliamentary fora such as Question Time and Senate
Budget Estimates Committee hearings4.
The Politics of Aid Policy-Making in Australia
Australian business has been ‘relatively disengaged’ in relation to aid policy
issues (ACG 2007: 39) in the sense that its lobbying activities and participation
in public policy debates has been more focused on issues like industrial
relations, tax reform, financial sector reform, fiscal policy, and trade liberal-
isation*/where it has had significant interests at stake*/than aid policy*/where
its interests have arguably been more subtle. Development NGOs, by contrast,
have been highly engaged in relation to aid policy issues, actively lobbying and
seeking to influence government policy at more or less every opportunity. Yet
the neo-liberal agenda has exerted much greater influence over Australian aid
policy than the social justice agenda.There have been two reasons for this. The first has to do with the structural
power of business. As scholars such as Poulantzas (1969) and Lindblom (1977)
have pointed out, business exercises significant influence over states in capitalist
societies simply by virtue of its control over scarce investment resources, giving
it greater power than other political and social actors. Capitalist societies, it is
argued, have an ‘investment imperative’ (Winters 1996)*/that is, they need
continued capitalist investment in order to reproduce themselves. Capitalist
states therefore have to provide an economic climate that makes it profitable for
business to invest. To fail to do so is to invite political instability and possibly
social revolution. As Winters (1996) among others has observed, the structural
power of business has been enhanced in recent decades by increasing capital
mobility. As economic globalisation has proceeded apace, it has become easier
for businesses to shift their investment resources to alternate jurisdictions. This
has increased pressure on capitalist states to provide an economic climate
conducive to capitalist investment, particularly from those elements within
business*/such as financial capital controllers*/that are highly mobile. As a
capitalist state, the Australian state has been deeply affected by such structural
pressures. As noted above, Australian business has been most concerned about
promoting neo-liberal reform in policy areas such as industrial relations, trade
and finance. Nevertheless, the broader structural imperative for the Australian
state to pursue neo-liberal policies has dictated that it adopt such policies in the
aid sector as well. The result has been to predispose the Australian government,
regardless of whether it has been led by the ALP or the Liberal-National
Coalition, towards neo-liberal aid policies. The broader structural conditions
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have made it virtually impossible for any of the major political parties to strayfrom the neo-liberal line, even in a policy area as low profile as aid policy.
The second reason why the neo-liberal agenda has exerted much greaterinfluence than the social justice agenda over Australian aid policy has to do withthe institutional dimensions of the aid policy-making process in Australia,particularly its executive-dominated character. In some political systems,legislatures play a key role in aid policy-making, for instance the US (Lancaster2007: 99�100). However, it is the executive arm of government that hasdominated aid policy-making in Australia, reflecting the nature of the foreignpolicy-making process in general. As Gyngell and Wesley (2007: 145) haveobserved, the Australian parliament has had little role to play in foreign policy-making because foreign policy decisions have rarely required enabling legisla-tion or parliamentary approval. At the same time, parliamentary foreign policydebates have been rare, have often been scheduled around debates on domesticmatters, and have generally involved the simple reading of prepared statementsby the Minister for Foreign Affairs and figures from the Opposition (Gyngelland Wesley 2007: 145). This has given the government of the day almostcomplete discretion over who participates directly in the foreign policy-makingprocess.
Accordingly, aid policy-making*/like foreign policy-making in general*/hastended to involve only a small group of people: members of the Cabinet (mostnotably the Minister for Foreign Affairs), Parliamentary Secretaries that dealwith international development issues, senior officials in AusAID, officials inthe offices of the Minister for Foreign Affairs and relevant ParliamentarySecretaries, and a few trusted outsiders. The latter have been particularlyimportant in as much as the government has delegated much of the process ofwriting aid policy to them. Typically, they have been neo-liberal economists andrepresentatives of the business community, reflecting the government’s predis-position towards neo-liberal policies. For instance, the Jackson Committeeconsisted of three representatives of big business and three neo-liberaleconomists; the Simons Committee consisted of one representative of bigbusiness, one neo-liberal economist and a third member (Gaye Hart) with abackground in education and training, including a period as the head of theAustralian arm of UNICEF; and the White Paper Core Team consisted of twoneo-liberal economists and a third member with a background in internationalagricultural research.
Development NGOs, academics working within the critical tradition indevelopment studies, and progressive minor parties, by contrast, have beenmore or less excluded from participating in the aid policy-making process,except in ways that deny them any real influence over policy. For instance, withthe exception of Gaye Hart, no representatives of these groups were included ineither the Jackson or Simons Committees or the Core Team that prepared the2006 White Paper. Development NGOs and some academics working withinthe critical tradition in development studies have been given positions in official
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bodies that deal with aid policy issues, most notably the Aid Advisory Council(AAC)5. But this is a relatively powerless body, its role being limited to theprovision of advice to the Minister of Foreign Affairs and constrained byinfrequent meetings. Development NGOs and critical academics have oftenbeen consulted as part of planning and review exercises within AusAID. But thegeneral perception is that their views have rarely had much impact, at least incomparison with those of neo-liberal economists and the representatives of thebusiness community. The Howard government also apparently tried to ‘silencedissent’ (Hamilton and Maddison 2007) within the development NGOcommunity by threatening the funding of one development NGOs that waspublicly critical of Australian aid policy6.
The executive-dominated nature of the aid policy-making process has alsorestricted the role of progressive minor political parties such as the Democratsand the Greens in this process. The fact that Australia has proportional votingin the Senate has made it possible for minor political parties to gain seats in thishouse of parliament. And when these parties have held the ‘balance of power’ inthe Senate, they have been able to negotiate deals with the government of theday that have given them some say in the content of legislation. But the fact thatforeign policy decisions have generally not required enabling legislation orparliamentary approval has dramatically limited their scope for influencing aidpolicy. The only real avenues through which they have been able to participatein aid policy-making have been Senate Question Time and Senate BudgetEstimates Committee hearings*/where they have been able to ask questions ofgovernment ministers and their representatives and senior government offi-cials*/and by trying to influence public opinion through statements to themedia7. However, none of these avenues have offered the minor political partiesmuch leverage or influence.
The case of the 2006 White Paper illustrates nicely the dynamics of inclusionand exclusion in the aid policy-making process. As noted above, the Core Teamchosen by the then Minister for Foreign Affairs, Alexander Downer, to lead theprocess of developing the White Paper and prepare the key report on which theWhite Paper would be based was dominated by neo-liberal economists. The otherbackground papers prepared as part of the White Paper process and which fed intothe Core Team’s report were all co-written by external consultants and AusAIDofficials (AusAID 2005a; Gordon et al 2005), the former including a number ofneo-liberal economists8 but only one figure with strong connections to thedevelopment NGOs community9. Following preparation of the various back-ground papers, the White Paper itself was prepared by senior AusAID officialsworking in conjunction with the Minister of Foreign Affairs and ParliamentarySecretary for Foreign Affairs (AusAID 2005b). Development NGOs, developmentexperts operating within the critical tradition of development studies, and figuresfrom progressive minor political parties had few opportunities to influence theWhite Paper. The development NGOs were ‘consulted’ by the Core Team andfigures from the government at various points and they and a wide variety of other
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groups were permitted to make written submissions to the Core Team and
participate in several public consultation fora. But the fact that no representatives
of the development NGO community were included in the Core Team itself meant
that they had no direct role in influencing the content of the White Paper. Natasha
Stott Despoja from the Australian Democrats and Kerry Nettle from the Greens
raised questions concerning the ideological orientation of the White Paper in
Senate Budget Estimates Committee hearings10, but these Committees offered
them no real leverage. Otherwise the minor political parties played little role in the
process of preparing the White Paper, reflecting the lack of an institutional entry
point into the process.
Future Directions
In early 2006, just before the Howard government published its White Paper on
the Australian aid program, the ALP’s Shadow Minister for Overseas Aid and
Pacific Island Affairs, Bob Sercombe, released a discussion paper promising ‘a
new vision’ for the Australian aid program (Sercombe 2006). In this discussion
paper, Sercombe took issue with the Howard government’s approach to the role
of economic growth in development as outlined, among other places, in the
White Paper. He argued that the Howard government had seen economic
growth as the sole route to poverty and ignored the link between poverty
reduction and increased productivity of the poor. A Labor government, he
suggested, would do more to raise the productivity of the poor by supporting
investments in basic public services such as education and health. He also
argued that such a strategy would serve to reduce inequality and in this way
promote development in a broader sense than that implied by a focus on
economic growth. Finally, he castigated the Howard government for failing to
make the UN’s Millennium Development Goals (MDGs) more central to its
approach to development issues.Sercombe failed to win ALP pre-selection for his seat in early 2006, so he did
not get a chance to pursue these ideas following the election of the Rudd Labor
government in November 2007. Since then, Bob McMullan, the Parliamentary
Secretary for International Development Assistance, has taken the lead in
formulating the new government’s approach to aid policy with Duncan Kerr,
the Parliamentary Secretary for Pacific Island Affairs, also playing a role.
Various speeches the two have made suggest that the Rudd government will give
greater prominence to the MDGs and prioritise new investments in health,
education and the environment (e.g. Kerr 1998; McMullan 2008). At the same
time, however, they have continued to emphasise the need for market-oriented
economic reform in developing countries. For instance, the ministerial state-
ment on the Australian aid program issued as part of the government’s budget
in May 2008, the most detailed statement of the new government’s approach to
aid policy at the time that this paper was written (mid-May 2008), lists
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‘‘promoting better health’’, ‘‘promoting better education’’, ‘‘broad-based
growth’’ and ‘‘addressing environmental and climate change challenges’’ among
the main priorities of the aid program. But it also emphasises the need for
‘‘sound macroeconomic and public investment policies, openness to trade and
investment, [and] microeconomic reforms that increase competition and reduce
costs’’ to promote economic growth (Smith and McMullan 2008: 22�23). It
also retains from the Howard years a key concern with improving governance,particularly economic governance, in developing countries, although it does at
the same time outline a concern to improve state responsiveness and account-
ability to disempowered and poor communities (31�32).Collectively, these documents imply a change of direction in aid policy under
the Rudd government consistent with, on the one hand, the ALP’s traditional
adherence to multilateralism and the principle of good international citizenshipin foreign affairs and, on the other hand, Third Way-style social democracy.
However, they do not signal the abandonment of neo-liberalism in favour of
support for a markedly greater role for the state in economic development or,
say, a rights-based approach. Broadly, given their emphasis on the need for
market reform and improved economic governance, their approach is consistent
with the PWC. It is clear that, notwithstanding the apparent changes,
promoting neo-liberal economic reform in developing countries will remain a
key plank of the Rudd government’s approach to aid policy, even if it receives
less prominence in government rhetoric than under the Howard government.Such an outcome is consistent with the broader political environment
surrounding aid policy-making, as it has been analysed here. The structural
and institutional context remains unchanged: business continues to exert
enormous structural leverage over the Australian state notwithstanding the
change of government and the aid policy-making process remains concentrated
in the executive, making it possible for the new government to continue
excluding groups that oppose neo-liberal aid policies from real participation inthe aid policy-making process. All this suggests that the ‘new vision’ for the
Australian aid program is unlikely to involve a shift away from neo-liberalism.
Notes
1. For instance, the ALP was highly critical of the Howard government’s use of aid money to
fund the establishment of an immigration detention centre in Nauru (see, for instance,
Sercombe 2006) while the Liberal and National parties were critical of the Hawke-Keating
government’s use of aid money to promote Asian engagement, especially through the
Development Import Finance Facility (see, for instance, Kelton 1998: 5).
2. Interview with Graham Tupper, former Executive Director of ACFID, Canberra, September
2007.
3. For an overview of the views associated with the critical tradition in development studies, see
Kothari and Minogue (2002).
4. Interview with Senator Natasha Stott Despoja, Spokesperson on Foreign Affairs for the
Australian Democrats, Adelaide, 3 October 2007. See also Blackburn 1993: 238.
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5. The current AAC includes a number of representatives from the development NGO
community: Tim Costello (World Vision); Paul O’Callaghan (ACFID); Tony Eggleton
(CARE Australia); Gaye Hart (ACFID); and Jack de Groot (CARITAS).
6. See, for instance, AIDWATCH’s claims in relation to the Australian Tax Office’s treatment
of its charitable status (AIDWATCH 2007). It should be noted that such threats have not
necessarily been effective. On the one hand, some of the more critical development NGOs are
not heavily reliant on government funding and concessions*/indeed, some, such as Oxfam,
have a policy of limiting their reliance on such funds. On the other hand, AIDWATCH has
found a way of remaining in business despite the withdrawal of its charitable status.
7. To be sure, the progressive minor political parties have been able to trade their Senate vote
for government legislation in one area of policy for changes in aid policy, as Brian Harradine
did in 1996 when he shared the balance of power in the Senate. Harradine, a socially
conservative Tasmanian senator, traded his vote on the privatisation of Telstra and other
government legislation in exchange for changes in AusAID’s family planning policies. But
such episodes have been relatively rare, presumably reflecting a calculation on the part of the
minor political parties that there are not enough votes in aid policy to justify such deals. This
is where a requirement for parliament to approve aid policy would have made a significant
difference: there would have been no opportunity cost for the minor political parties in doing
deals in relation to aid policy, making it more likely for social justice principles to be
incorporated into aid policy.
8. I am referring specifically here to Mark Baird, a former World Bank Vice-President, who co-
wrote the background paper on Asia; Ron Duncan, the former head of the NCDS and the
head of the White Paper Core Team, who co-wrote the background paper on the Pacific; and
the consultants from the CIE who co-wrote the background paper on the environment.
9. I am referring here to Gaye Hart, the President of ACFID.
10. See, for instance, Senate Foreign Affairs, Defence and Trade Legislation Committee (2006).
Acknowledgements
I wish to thank Patrick Kilby, Jane Hutchison, Shahar Hameiri, and Richard
Robison for their helpful comments on an earlier draft of this paper and Caddi
Johnson for her research assistance. The usual caveat applies.
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