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This paper has three specific aims to fulfil in providing an analysis on the role of aid m the development process in Papua New Guinea.Firstly, this paper begins by providing an overview of development theory and the role of aid in the development processes of a country and briefly examines the nature of 'Dutch Disease'effects of aid and links this to the current del)ate on how aid has failed the Paci五C.S∝ondly, a short literature review on Japanese ODA with respect to this aid's objectives and guiding principles; philosophy of this aid and discusses its role and reasons and its main characteristics as being part and parcel of an international development activity, of which Japan underbkes as an aid donor, is provided.Thirdly, an飢ipincal analysis is provided on the Bereina-Malalaua road proj∝蝣t (1996)(1997)(1998)(1999)(2000), which was co-financed by a yen loan and (GoPNG) development budget support.Empirically, the specific aim of this study is to assess the observed effects of this proj∝t lAith reference to the two main investigated el飢Iaits: (1) soao一七conomic effects on local rural economy, especially on rural transport businesses and (2) on socio-∝onomic effects on SUAS in the Malalaua area of PNG.
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