The impact of foreign aid on poverty and human well-being in Papua New Guinea

Abstract

This paper evaluates the impact of foreign aid on poverty and human well-being in Papua New Guinea during the 1990s. The methodology of the paper involves comparing the mix of donors’ aid policies aimed at the promotion of economic growth, direct targeting of the poor and the provision of safety nets with the poverty and well-being situation in Papua New Guinea. Growth in Papua New Guinea has not been pro-poor and the high level of inequality reduces the impact of growth on poverty. The sectoral allocation of foreign aid to Papua New Guinea has been broadly consistent with a strategy to effectively reduce poverty and increase human well-being. However, the paper concludes by suggesting ways in which foreign aid donors can more effectively achieve these goals.

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