Effectiveness Evaluation Of Australia’s Aid To South Pacific Island Countries

Foreign aid originated after the Second World War and was mainly used for postwar reconstruction and refugee relief.As an important part of international financing and global governance,foreign aid has gradually been institutionalized,systematized and standardized.The South Pacific Island country is located in the northeast of Australia and is one of the most economically active and largest economic regions in the world.The strategic positioning of South Pacific Island countries is very important,with more political frictions and obvious conflicts of interest.From the perspective of economic development,the economies of countries of the South Pacific Island countries are generally lagging behind,which is vulnerable to the influence of the world financial environment and they are heavily dependent on foreign aid.As the southern line of China’s Maritime Silk Road and an important node of the Belt and Road Initiative,the South Pacific Island countries have important strategic significance to China.Australia is the major donor to the South Pacific Island countries,which has a relatively mature aid system,and its experience has great reference significance for China.It is found that Australia’s assistance to the South Pacific Island countries is mainly to maintain regional stability and security to meet the needs of its "medium power" strategic.Australia is trying to improve the governance capacity of the South Pacific Island countries to meet its own strategic needs through aid.Therefore,the form of aid funds usually takes the form of free donations.The main areas of aid are "government and public governance" and "education".There are big differences between China and Australia in the form of aid funds,aid fields,and aid characteristics.This is mainly reflected in China’s project assistance based on preferential loans,mainly in the fields of "transportation" and "communication construction".This article adopts the "aid-growth" model,takes Australia’s aid to South Pacific Island countries as the main research object,and combines the United Nations Millennium Development Goals to analyze Australia’s total aid and seven different areas of aid(infrastructure construction,agriculture and fisheries,government and public governance,education,health,humanitarian assistance and energy)to South Pacific Island countries’ economic and social.At the same time,in order to solve the endogenous problem in the model,this paper also selects Australia’s energy export output as an instrumental variable to perform a two-stage least square regression to test the robustness of the model.The conclusions of this article are as follows: Australia’s foreign aid to South Pacific Island countries can have a positive effect on the economic and social development of the recipient country,and when the recipient country’s policy environment is better,the aid effect can be significantly improved,but Australia is in the field of health.The impact of the aid on the economic and social development of the South Pacific island countries is not significant,and the empirical results show that the South Pacific island countries currently have a strong demand for infrastructure construction;different areas of assistance have different requirements for the recipient countries’ policy conditions,infrastructure construction,government and public governance,education and humanitarian assistance has higher requirements for the policy environment,while the requirements for policy conditions in the agriculture,fishery and energy sectors are relatively loose.Based on the research results,this article believes that China should try its best to make up for the shortcomings in the supply of traditional donor countries to South Pacific Island countries,actively adjust the form of infrastructure construction and health assistance,pay attention to the policy and institutional environment of recipient countries,and optimize the allocation of aid funds.The island countries have established good cooperative relations and improved aid transparency,thereby enhancing the effectiveness of aid.