The Changing Development Paradigm and Australian Aid Strategy

Abstract This paper analyses the changes in the development paradigm and the implications thereof for Australian aid strategies. The demise of the "neo-classical trickle-down theory", and the emergence of the "structuralist redistribution with growth approach" which culminated in the widely-acclaimed "basic needs paradigm" are critically examined. The "neo-Marxist dependence critiques" of development models are also discussed and the laggard response of Australian aid strategy to the changing perceptions of development economics is demonstrated. Australian aid structure and trends are analysed and the factors that cause the divergence of aid practice from the rhetoric on the needs paradigm are identified. The behavioural characteristics that influence Australian aid practice are modelled. The allocation of the major share of Australia's aid to the relatively rich developing countries and the diversion of aid from the more deserving populous countries are shown in terms of 'income puli' and 'population push' effects. These effects distort the inter-country allocation of Australian aid, making it run counter to the tenets of the needs paradigm. Finally, remedial measures for the harmonisation of Australian aid strategy with the new perceptions of the needs paradigm are outlined.