Home' Partners : Partners March 2011 Contents BY ALEX BAGNARA
Is foreign aid expenditure a waste of
money? It is a blunt question that is
increasingly being asked, especially in light
of the global financial crisis affecting so
many Western economies. Closer to home,
the incidences of natural disasters are causing
some Australians to ask whether funding
overseas aid projects should be deferred to
concentrate on national assistance.
"Clearly we are in a time, as collaborators
in offshore aid-assistance programs, where it
is necessary to justify expenditure and
prove that there are substantial returns on
investment," says Dr Nick Austin, ACIAR's chief
When it comes to ACIAR, impact assessment
studies of 90 projects have demonstrated
accrued total benefits of a massive $12.6 billion
for a total investment of approximately $234
million (in 2008 dollar terms). $11.4 billion
worth of benefits are delivered to farmers and
economies overseas. The benefits are not just to
partner countries. Often overlooked are ACIAR
project benefits to Australia.
"It is not enough to state figures and statistics,
however," Dr Austin says. "As our programs are
put under the microscope, we need to ensure
the measures of return are robust and the
expenditure can be reliably justified."
ACIAR plays a specialist role, providing
agricultural research and development (R&D)
solutions to some of the world's poorest farmers.
To ensure these R&D solutions are delivering
sustainable outcomes, ACIAR commissions
independent impact assessment studies that
seek to measure and better understand the
benefits realised through this work.
ACIAR has a long history of assessing the
impact of its R&D investments and uses these
studies to derive valuable lessons for improving
the selection, design and delivery of projects.
They also serve to demonstrate the value
of ACIAR as part of Australia's international
development assistance program.
The most recent publication in the ACIAR
Impact Assessment Series looks at the past
impact assessments and adoption studies. In
essence, the review has sought to capture the
elements that contribute to a successful project.
Lessons learned from past ACIAR impact
assessments, adoption studies and experience
was authored by David Pearce, from the Centre
for International Economics (CIE), and published
by ACIAR in December 2010 (IAS 69).
The review considers lessons learned from
impact assessments and adoption studies and
includes the results of a qualitative survey of
project leaders and ACIAR research program and
country managers. It then brings the lessons
together in a common framework and considers
how the lessons can be applied. It refers to five
broad categories of lessons or factors that affect
each stage in the project cycle:
n the human factors---the ability of team
members, researchers and others involved
in a project to communicate and work
n management factors---the running and
management of the project
n communication factors---covering the
approach to communication within the
n institutional factors---both the institutions
within which the project takes place, as well
as the broader economy-wide institutional
Aid R&D is a two-way
MARCH MAY 2011 PARTNERS
settings that are likely to influence project
adoption and impact
n incentive factors---both the incentive to
participate and subsequently disseminate
project results and those motivating users to
adopt the output from the project.
Throughout the review, Mr Pearce returns to
three fundamental points:
1 Research outputs will not produce benefits
2 Potential adopters will not adopt without
clear net benefits of doing so.
3 The issue of adoption and the incentives
facing potential adopters need to be
considered at the outset of a project.
Based on various ACIAR adoption studies,
factors contributing to or inhibiting adoption
of project outputs have been identified and are
presented in graph form.
There have been some notable successes.
One example uses fruit-fly control projects
as a case study to illustrate just how high
investment returns can be. It was featured in
the November 2008--February 2009 issue of
Partners and described in the IAS 56, 'A review
and impact assessment of ACIAR's fruit-fly
research partnerships, 1984--2007'.
ACIAR--Asian partnerships invested $50.8
million towards fruit-fly R&D, with ACIAR
contributing $22.9 million. An independent
study indicated that the investment in fruit-fly
R&D returned benefits to the value of $258.8
million; that means a return of $5.10 for every
$1 invested and a remarkable internal rate of
return of 33%.
It seems as though the main focus of any
questions concerning aid investment is not if
there are benefits in spending, but rather what
to invest in.
Economist Dr Esther Duflo, of the
Massachusetts Institute of Technology (MIT),
who has been taking economics into the field
to discover the causes of poverty and the
means to eradicate it, presented to the TED
conference in February 2010. TED is a not-for-
profit organisation devoted to "ideas worth
spreading", which began in 1984 to bring
nA new publication, Lessons learned from
past ACIAR impact assessments, adoption
studies and experience, is refining ACIAR's
approach to planning, developing and
implementing its projects.
n There is increasing pressure to justify
expenditure on overseas aid programs and
ACIAR impact assessments indicate positive
returns for investment.
n Key elements required for effective
program design and delivery are human,
management, communication, institution
and incentive factors.
n Lessons learned by ACIAR could benefit the
wider research community.
While there is no 'magic bullet' formula that can be applied to guarantee return
on investment for agricultural R&D aid projects, there are some key considerations
to support priority setting and effective project development.
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