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Effective governance: policies, institutions and functioning economies

Effective governance: policies, institutions and functioning economies

2020-21 total Australian ODA [budget estimate]
$743.1 million

* Australia’s development efforts are set out in Partnerships for Recovery: Australia’s COVID-19 Development Response.

Governance affects virtually all aspects of a country's prosperity. An effective public sector and functioning, predictable institutions provide the foundations for economic growth, private sector investment and trade.

For this reason, effective governance is one of the six priority areas in Australia's aid policy Australian aid: promoting prosperity, reducing poverty, enhancing stability. Australia is supporting the building of institutions that have a direct role to play in promoting stability, inclusive economic growth and poverty reduction, and in strengthening gender equality and women's empowerment. We also work with civil society and the private sector to strengthen environments in our partner countries in which citizens and organisations can make legitimate demands of their governments.

In providing this assistance, we recognise that Australia's developing country partners have a diverse range of governance and institutional capabilities. Partner countries range from highly populous Indonesia to the micro-states of the Pacific, from stable to highly volatile, from resilient to fragile, and from capable to very weak. Differentiated approaches are required to address the varied economic, political and social factors hindering development in each of these country contexts.

Australia's governance work will be guided by Effective Governance: Strategy for Australia's aid investments. This strategy sets out our approach to governance, including guidance on the types of governance sector investments we should consider and how to ensure that all our aid investments are technically sound and politically informed. The strategy builds upon DFAT's long track-record in this area and emphasises the fundamental importance of understanding and responding to the specific contexts of our partner countries.

For further information on how Australia is assisting partner countries on governance and institutions, see the links in the left menu.

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