Objective: This paper explores the paradox of donor aid being delivered through a business model through a case study in Papua New Guinea.
Methods: A retrospective review of project implementation and an outcome evaluation provided an opportunity to examine the long-term results and sustainability of a large project. Analysis was informed by data collected from 175 interviews (national, provincial, district and village), 93 community discussions and observations across 10 provinces.
Results: Problems with the business model of delivering aid were evident from implementation data and in an evaluation conducted two years after project completion (2006). Compounding the business model effect were challenges of over-ambitious project goals with limited flexibility to adapt to changing circumstances, a donor payment system requiring short-term productivity and excessive reporting requirements.
Conclusion: An overly ambitious project design, donor dominance within the business model and limited local counterpart capacity created problems in the community initiatives component of the project. Contractual pressures can negatively influence long-term outcomes that require development of local leadership and capacity. Future planning for donor project designs needs to be flexible, smaller in scope and have a longer timeframe of seven to 10 years.
Implications: Donor-funded projects need to be sufficiently flexible to apply proven principles of community development, build local ownership and allow adequate time to build counterpart knowledge and skills.