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Introduction: neoliberalism and its discontents in Australian Aid Policy1

Neo-liberalism has been a key influence on Australian aid policy since the late 1970s (Lim 1985; Higgott 1986; Kilby 1996, 2007). As Harvey (2005: 3) has observed, neo-liberals seek to ‘maximis[e] the reach and frequency of market transactions, and . . . .to bring all human action into the domain of the market.’ To this end, they have promoted the policies of the so-called ‘Washington consensus’: fiscal discipline, tax reform, trade liberalisation, foreign direct investment liberalisation, deregulation, interest rate liberalisation, privatisation, exchange rate liberalisation, and secure property rights. Since the mid-1990s, the neo-liberal agenda has shifted slightly as it has become increasingly concerned with promoting ‘good governance’ and enhancing the role of civil society in the development process, a shift that has given rise to what is often referred to as the ‘post-Washington consensus’ (PWC). Importantly, this shift has been made in a way that has preserved a central role for market forces in the development process, with the purpose of good governance and civil society activities being to create the political and social conditions necessary for market-oriented economic reform (Jayasuriya and Rosser 2001). The principles of neo-liberalism have been reflected in many major policy documents associated with the Australian aid program, particularly the reports of the Jackson Committee, which reviewed the Australian aid program in the early 1980s (Jackson 1984), and the Simons Committee, which carried out a similar review in 1996 (Simons 1997); various ministerial statements on the Australian aid program (e.g. Bilney 1993; Downer 2002); and the 2006 White Paper on the Australian aid program (AusAID 2006). They have also been reflected in various subsidiary policy documents such as Department of Foreign Affairs and Trade and Australian Agency for International Development (AusAID) (2001); AusAID’s sectoral policies in areas such as governance, gender, land, and security; and many of AusAID’s country strategies. The Rudd Labor government has indicated that it will give greater emphasis in its aid policies to the United Nations’ Millennium Development Goals than the previous government and increase investments in health, education and environmental activities in developing countries (Kerr 2008; McMullan 2008). But its approach so far has been broadly consistent with the PWC. The purpose of this special section is to explore the way in which neo-liberal ideas have influenced Australian aid policy and the consequences this has had in terms of its ability to promote poverty reduction and sustainable development