Governance for sustainable development: Strategic issues and principles for Indigenous Australian communities

Full text

Governance for sustainable development:
Strategic issues and principles for Indigenous Australian
communities
M. Dodson and D.E. Smith
No. 250/2003
ISSN 1036-1774
ISBN 0 7315 5625 9
Professor Mick Dodson is Chair of the Institute for Indigenous Studies, The
Australian National University, and Diane Smith is a Fellow at the Centre for
Aboriginal Economic Policy Research, The Australian National University.

CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH

DISCUSSION PAPER 250 iii
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
Table of Contents
Abbreviations and acronyms.................................................................................iv
Abstract .................................................................................................................v
Acknowledgments ..................................................................................................v
Introduction .......................................................................................................... 1
Understanding ‘governance’ and ‘good governance’............................................... 1
A brief survey of relevant research ........................................................................ 3
The challenge of ‘sustainable development’ ........................................................... 4
Current barriers to sustaining community and regional development .................. 6
The extent of Indigenous local control over the key ingredients of development.... 9
Low levels of control over key ingredients ........................................................... 10
Moderate levels of control over key ingredients ................................................... 10
High levels of control over key ingredients .......................................................... 11
The consequences of focusing on areas of poor control ....................................... 11
Building effective governance: an alternative approach....................................... 12
Good governance: the core ingredients and principles ........................................ 12
Stable and broadly representative organisational structures .............................. 13
Capable and effective institutions ....................................................................... 14
Sound corporate governance ............................................................................... 14
The limitation and separation of powers ............................................................. 15
Fair and reliable dispute resolution and appeal processes .................................. 16
Simple and locally relevant information management systems ........................... 17
Effective development policies and realistic strategies. ....................................... 18
Cultural ‘match’ or ‘fit’ ........................................................................................ 18
Conclusion: getting good governance for sustainable development ..................... 20
Notes ................................................................................................................... 20
References ........................................................................................................... 21
Tables
Table 1. The degree of control that Indigenous communities exert
over the keys to sustainable development ........................................9

iv DODSON AND SMITH
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
Abbreviations and acronyms
AIATSIS Australian Institute of Aboriginal and Torres Strait Islander
Studies
ANU The Australian National University
ASX Australian Stock Exchange
ATSIC Aboriginal and Torres Strait Islander Commission
ANUIIA ANU Institute for Indigenous Australia
CAEPR Centre for Aboriginal Economic Policy Research
HREOC Human Rights and Equal Opportunity Commission
IOG Institute of Governance
NARU North Australian Research Unit
NNI Native Nations Institute
RA Reconciliation Australia
WCED World Commission on Environment and Development

DISCUSSION PAPER NO. 250 v
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
Abstract
This Discussion Paper examines the concepts of ‘governance’, ‘good governance’
and ‘sustainable development’ in the context of Australian Indigenous
communities and regions. It explores the hypothesis that there is vital link
between governance and sustainable development.
The first half of the paper defines the key concepts and reviews the existing
barriers facing Indigenous communities and their organisations in securing
sustainable socioeconomic development. It identifies the key ingredients of
successful development and then those over which Indigenous Australians
actually have some local control. On the premise that it is best to make a start in
areas where local control can be exercised, building ‘good governance’ is identified
as the key ingredient—the foundation stone—for building sustainable
development in communities and regions.
The second half of the paper then proposes a set of key ingredients and core
principles which Indigenous communities might use to build more effective
governance. These draw on the professional and field experience of the authors
and other Australian research, the international findings of the Harvard Project in
the USA, and the Gitxsan leader Neil Sterritt’s applied research on governance
with Canadian First Nations.
Acknowledgments
A number of people have contributed comments and suggestions in response to
earlier drafts of this paper. The paper was first presented to a workshop entitled
Seizing Our Economic Future, Indigenous Forums: Building a Better Territory,
convened by the Office of Indigenous Policy of the Northern Territory Government,
Alice Springs, 6–7 March 2003. Participants at that conference contributed
valuable suggestions in response to issues raised by the paper. The literature
review section of this final paper also draws upon research summarised by Will
Sanders and Diane Smith in an unpublished scoping paper for Reconciliation
Australia that explored the potential for conducting a ‘Harvard-style’ longitudinal
research project on Indigenous governance in Australia. We would also like to
thank Neil Westbury and Will Sanders for helpful comments on the final version
of the paper. Discussions with Professor Stephen Cornell and Dr Manley Begay
from the Harvard Project on Indian Economic Development, and with Mr Neil
Sterritt on Canadian First Nations governance have contributed enormously to
the development of ideas presented here. Frances Morphy and John Hughes
provided careful, invaluable editing and proofreading, and Wendy Forster
finalised the layout.

DISCUSSION PAPER 250 1
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
Introduction
This paper examines the concepts of ‘governance’, ‘good governance’ and
‘sustainable development’ in the context of Australian Indigenous communities
and regions. It explores a hypothesis that has been investigated over a 14-
year period by the Harvard Project on American Indian Governance and
Economic Development, but which has received little comprehensive attention
in Australia; namely, that there is a vital link between governance and
sustainable development.
In the first half of the paper, the terms are defined and the existing barriers facing
Indigenous communities and their organisations in securing sustainable
development are reviewed. The paper then suggests that rather than focusing on
the plethora of explanations put forward for lack of development, a more useful
analytic approach is to identify the keys to successful development and then
determine which of those Indigenous Australians actually have the greatest
degree of local control over. On the basis of that analysis it is argued that getting
‘good governance’ is the key ingredient—the foundation stone—for building
sustainable development in communities and regions. In other words, sustainable
development is a governance issue. Poor governance arrangements can impede or
entirely obstruct development; legitimate and effective gove rnance can sustain it.
The second half of the paper suggests that governance is an issue over which
Indigenous communities and their representative organisations potentially have
significant control. Furthermore, it is only when effective governance is in place
that communities and regions will have a solid foundation for making sound
decisions about their overall goals and objectives, what kind of life they want to
try to build, what assets they have or require, what things they want to retain,
protect or change, the kind of development they want to promote or reject, and
what actions they need to take to achieve those goals.
The conclusion draws on the professional and field experience of the authors,
other Australian research, and heavily on the international research findings of
the Harvard Project in the USA, and the applied research of Gitxsan leader Neil
Sterritt with Canadian First Nations.1 The paper proposes a set of key ingredients
and core principles for building good governance in Indigenous communities and
regions. It is from those fundamental ingredients and principles that good
governance for more sustainable development will grow.
Understanding ‘governance’ and ‘good governance’
Governance can broadly be defined as: the processes, structures and institutions
(formal and informal) through which a group, community or society makes
decisions, distributes and exercises authority and power, determines strategic
goals, organises corporate, group and individual behaviour, develops rules and
assigns responsibility.

2DODSON AND SMITH
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
Fundamentally, governance is about power, relationships, and processes of
representation and accountability—about who has influence, who decides, and
how decision-makers are held accountable (Plumptre & Graham 1999). It is not
the same as ‘government’. Rather it focuses our attention on a much wider range
of stakeholders and their relationships and networks, including individuals,
government, private sector, and non-government organisations (see Sterritt 2001;
Westbury 2002). While ‘self-government’ means having jurisdiction and a
mandated control over the members of a group, its land and resources,
‘governance’ is about having the structures, processes and institutional capacity
in place to be able to exercise that jurisdiction through sound decision-making,
representation and accountability (Hylton 1999; Sterritt 2001).
Governance enables the representation of the welfare, rights and interests of
constituents, the creation and enforcement of policies and laws, the
administration and delivery of programs and services, the management of
natural, social and cultural resources, and negotiation with governments and
other groups (de Alcantara 1998; Hawkes 2001; Westbury 2002). The manner in
which such governance functions are performed has a direct impact on the
wellbeing of individuals and communities.
‘Good governance’, then, is essentially concerned with creating the conditions for
legitimate and capable rule, and for collective action. It leads to the social,
cultural and economic developments sought by citizens (see Cornell et al. 2001;
Plumptre & Graham 1999; Sterritt 2001). It has also been characterised as
having four main attributes (Institute of Governance (IOG) 1999; Plumptre &
Graham 1999; Sterritt 2001; Westbury 2002):
• legitimacy—which concerns the way structures of governance are created
and leaders chosen, and the extent of constituents’ confidence in and
support of them;
• power—the acknowledged legal and cultural capacity and authority to make
and exercise laws, resolve disputes, and carry on public administration;
• resources—the economic, cultural, social and natural resources, and
information technology needed for the establishment and implementation of
governance arrangements; and
• accountability—which concerns the extent to which those in power must
justify, substantiate and make known their actions and decisions.
‘Governance’ has only recently been introduced into the terminology of Australian
debates and research. Like most imported terminology, there is confusion about
its meaning and a touch of parochial scepticism about it potential usefulness. But
there is also a view that the term helps to identify some critical generic problems
that are faced by Indigenous Australians. For several decades now Australian
commentators (both Indigenous and non-Indigenous) have been asking a series of
related questions about why so many Indigenous organisations and enterprises
seem to fail; what are the most effective structures for running a community and
delivering services; how community assets and resources can most effectively be

DISCUSSION PAPER NO. 250 3
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
managed; how Indigenous organisations and leaders can become more
accountable to their members; how the different rights and interests of all
residents in communities can be represented and protected; and whether
different communities can work together for regional development objectives.
These familiar questions share one important underlying thread—governance.
A brief survey of relevant research
The term ‘governance’ has a long history in the worlds of international aid and
development (see de Alcantara 1998; Stoker 1998; World Bank 1994). Issues of
Indigenous governance and best practice have also been a key policy and
research focus in Canada and the USA for a number of years. International
indigenous literature of relevance includes Neil Sterritt’s (2001) First Nations
Governance Handbook: A Resource Guide for Effective Councils which provides a
valuable policy and practical tool for governance reform and capacity-building by
Canadian First Nations.
In the USA, the Harvard Project on American Indian Economic Development has
conducted systematic research into the relationship between Indian governance,
sovereignty and sustainable economic development. It has produced a substantial
and relevant literature (see Begay, Cornell & Kalt 1998; Cornell 1993, 2002;
Cornell and Gil-Swedberg 1995, Cornell & Kalt 1992, 1995; Jorgensen 2000; Kalt
1996). Its research findings have also informed the delivery of executive
education, teaching and policy services to Indian nations by the National Nations
Institute (Begay, Cornell & Kalt 1998) and the establishment of a national best-
practice awards program, Honoring Contributions in Governance of American
Indian Nations.
In Australia, the early ethnographic and colonial literature on Indigenous forms of
governance and leadership has been usefully summarised by Smith (1976), and
by Rowse (1992, 2001) who surveys the attempts to move towards Indigenous
local government (at least in the Northern Territory), and Indigenous peoples’
apparent preference for a tightly-tied delegated representation model.
Several Australian researchers have considered what might constitute the
cultural geography of governance, and the most effective and relevant Indigenous
units for governance—asking who constitutes the ‘self’ in self-determination at
the local, regional and national levels. An early examination of the emerging
pattern of dispersed community governance by Wolfe (1989) identified benefits as
well as costs of this pattern (see also Sullivan 1987, 1995). Sanders and Arthur
have explored concepts of autonomy and governance structures in the Torres
Strait region (Sanders 2002; Sanders & Arthur 2001), and Westbury and Sanders
(2000) and Smith (2002a) have examined the benefits of a model featuring
regionally-dispersed governance and service delivery. Smith (2002b) has
examined the conceptual underpinnings and applicability of jurisdictional
devolution for community governance, and the Australia Institute (2000), Crough

4DODSON AND SMITH
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
(2001), Sanders (1995); and Smith (2002c) have explored alternative financial
frameworks for resourcing Indigenous governance.
Nettheim et al. (2002) have discussed the central importance of governance issues
for land and resource management and provide useful literature sources.
Amongst others, Dodson and Pritchard (1998) and Dodson and Strelein (2001)
have analysed the shifting interpretations of self-determination and nation-
building in Indigenous affairs policy. Pete rs-Little (2000) explored the concept of
‘community’, and its impact on Indigenous organisational politics. Several
researchers have discussed a range of corporate governance issues in the native
title and land rights context, including Smith (1995) and various papers in Smith
and Finlayson (1997), and Mantziaris and Martin (2000). Jardine-Orr et al. (2003)
have more recently explored the connections between Indigenous housing and
governance. Martin and Finlayson (1996) have analysed the concept of
organisational accountability from Indigenous and non-Indigenous perspectives.
The Aboriginal and Social Justice Commissioner of the Human Rights and Equal
Opportunity Commission (HREOC 2002, 2003) has provided a valuable overview
of a range of Indigenous governance issues in the context of contemporary
government policy and international human rights. In 2002, Reconciliation
Australia convened the first national conference on Indigenous governance in
Australia; key papers from that conference are available on their website
(www.reconciliationaustralia.org/).
Overall, however, there has been no holistic, systematic approach to researching
Indigenous governance across different types of communities and regions in
Australia. Similarly, little comprehensive research has been conducted in
Australia into the connections between Indigenous governance and sustainable
development, or into what constitute the fundamental principles of good
Indigenous governance.
The concept of ‘governance’ now provides us with a timely organising perspective,
a frame of reference. It enables us to develop a policy-relevant language with
which to discuss the characteristics and implementation of local-level governance
and self-determination, affording a connection between theoretical propositions
and achieving them in a workable form on the ground. It also allows us to identify
the barriers to, and benefits of, securing good governance. The rapid transfer of
the term ‘governance’ into current bureaucratic, research and Indigenous
vocabularies suggests there is a need for such a concept. But it is important that
local substance is given to its meaning, and to how the concept might be
investigated in the Australian context. This paper attempts to provide a
preliminary framework for consideration of these issues, and to identify principles
which will assist Indigenous efforts in ‘governance building’ on the ground.
The challenge of ‘sustainable development’
Indigenous Australians currently face a number of major development challenges.
Some arise from the socioeconomic conditions of Indigenous communities and

DISCUSSION PAPER NO. 250 5
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
lands. Research over the last decade by the Centre for Aboriginal Economic Policy
Research (CAEPR) indicates that Indigenous Australians continue to have the
highest rates of poverty, unemployment, early mortality, and the lowest levels of
education in the country. Household and family incomes remain lower than
average, and reliance on government transfers including social security payments
is high.
Since the Indigenous population is increasing at a faster rate than that of other
Australians, their levels of socioeconomic disadvantage are likely to remain high,
if not to increase. Communities suffer from substantial historical infrastructure
and funding gaps, and many Indigenous Australians live in substandard
conditions, often in regions remote from essential services and subject to high
cost disabilities. One of the most urgent tasks facing Indigenous leaders, their
communities, and State and Federal governments is that of improving the
socioeconomic wellbeing of all Indigenous people.
Other development challenges are actually the products of success. An increasing
numbe r of Indigenous groups are negotiating resource development agreements,
securing native title and land rights determinations, and establishing enterprises.
As a consequence, they face the challenge of managing major land and natural
resource endowments, and the daunting task of trying to generate sustained
socioeconomic development.
The concept of ‘development’ as applied to Indigenous societies is a complex one,
and has been the subject of debate at national and international levels for some
years. There are many definitions of development and a common feature is to
emphasise beneficial progress or improvement. One straightforward approach
defines development as ‘change or transformation that makes life better in ways
that people want’ (Lea & Wolfe 1993: 1–2). What ‘sustainable’ means in such
circumstances has similarly been the subject of considerable debate. The World
Commission on Environment and Development’s Brutland Report (WCED 1987:
43) proposes that development is sustainable when it ‘meets the needs of the
present without compromising the ability of future generations to meet their own
needs’. The World Wildlife Fund and the International Union for the Conservation
of Nature have said that for development to be sustainable in this way, ‘it must
take account of social and ecological factors, as well as economic ones; of the
living and non-living resource base; and of the long-term as well as short-term
advantages of alternative actions’ (World Conservation Strategy 1980, cited in
Dodson 2002: 3).
The principle of ‘sustainable development’ is now seen to rest on three
‘interdependent and mutually reinforcing pillars’; namely, ‘economic development,
social development and environmental protection at national, regional and global
levels’ (United Nations Department of Economic and Social Affairs 2002, para. 5).
But how are these to be secured in Indigenous communities? And where do
cultural values and Indigenous conceptions of development fit? What constitutes
development for one group may not be development for another, and the factors
influencing sustainability are often viewed differently in a cross-cultural context.

6DODSON AND SMITH
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
Sustainable development is, as Dodson (2002: 3–4) characterises it, ‘a direction
more than a place’; it is about ‘innovation and opportunity’ and involves value
judgements about the direction and speed of change. It is also multidimensional,
involving social processes concerned with the distributional aspects of benefits
and adverse impacts. And it involves political and administrative processes
concerned with negotiating the rights and interests of stakeholders involved
(Dodson 2002). For many Indigenous Australians, the ‘test’ of sustainability
relates to being able to answer a set of difficult questions arising out of these
different dimensions: What kinds of activities and changes might be acceptable
and consented to now, and acceptable to people over the generations? Will the
economic or other benefits of a current development initiative still be available for
future generations? Might future negative impacts outweigh any benefits? If
people know now that some benefits are only short-term, will those benefits
nevertheless act as a building block for the capacity of future generations to meet
their own needs, or will they compromise future choices?
One of the greatest challenges for Indigenous people, therefore, will be to integrate
economic activity with their social concerns, cultural priorities and legal rights,
and with effective governance systems. In particular, the exercise of ‘informed
consent’ continues to be a central feature of negotiations about development,
especially in the context of land rights and native title in Australia (Dodson 2002:
4; see also HREOC 2003: 103, 111). The concepts of ‘informed consent’ and
‘integrated development’ are both fundamentally concerned with issues of control,
capacity, and power—that is, with governance. While many Indigenous
communities are attempting to exercise informed consent about development
which addresses these concerns, there appears to be a significant failure rate.
What then, are the barriers holding back Indigenous communities and regions?
Current barriers to sustaining community and regional
development
Indigenous communities, regions and their organisations face substantial
problems in initiating development, let alone sustaining it. Hundreds of
consultancy and research papers have been written, and many government
inquiries have been undertaken to examine the economic failures and the reasons
for the lack of sustained development. The literature cites a wide range of causal
factors and obstacles. Some arise out of the internal conditions of Indigenous
community, cultural and organisational environments. Others arise out of the
wider external political, policy and economic environments within which
Indigenous communities operate. The distinction between these internal and
external factors is partly analytic. In reality, the causal factors interact with and
influence each other.
One causal factor located within the external environment and identified by the
literature is the fact that Indigenous Australians have highly variable (or no)
property and resource rights. Some groups do have statutory property rights, but

DISCUSSION PAPER NO. 250 7
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
extremely limited or non-existent revenue-raising jurisdiction. On the one hand, it
is stated that Indigenous inalienable freehold and native title land restricts
development. On the other, it is argued that the lands returned to Indigenous
ownership have been badly degraded by previous non-Indigenous owners, and
require substantial financial inputs and rehabilitation.
An additional barrier, noted repeatedly, is that Indigenous people lack financial
capital and credit. While the barrier to capital acquisition has sometimes been
laid at the door of inalienable title, it has been pointed out that perhaps the more
critical explanation lies with banks in Australia which will not establish flexible
lending practices or provide financial services on Indigenous-owned lands; unlike
equivalent institutions overseas.
Some reports have noted that Indigenous cultural and ‘adventure’ tourism are
potential niche markets for economic development. However, certain critical
external factors are thought to impede such development. Many communities are
remote from markets and have high transportation costs, small populations and
low economies of scale.
Another external factor cited for the failure of socioeconomic development is that
Federal, State and Territory Government policies and service delivery are poorly
coordinated and inefficiently delivered. A raft of inquiries and reviews report that
Government funding is stop-start, scattered across numerous departments in
different program buckets, and lacks transparency and ‘downward
accountability’. Community organisations are tied to the grant funding drip-feed,
overloaded with inappropriate program objectives and performance indicators,
and onerous ‘upwards accountability’ burdens. The history of Indigenous
organisational incorporation is that such organisations often have unworkable or
externally imposed structures and constitutions.
These external causal factors interact with a number of other barriers arising
from within the community environment. The literature abounds with comments
about poor community capacity for economic development. Indigenous
community organisations, and individuals in general, lack the human capital that
usually underwrites successful economic development and also lack the means to
develop human capital. For example, it has been noted that Indigenous
organisations and individuals lack financial management and business skills, and
that there are poor levels of financial and overall literacy. Many communities are
reported to have substantial infrastructure gaps and high rates of capital
deterioration. As a consequence, while some communities and groups have low
natural resource endowments, others have natural resources but low levels of
control over them. It is also reported that substance abuse and dire health
problems are destroying Indigenous social and cultural capital.
It is documented that communities lack effective ‘whole of community’ planning
and training for development. But conversely, it is said that communities have too
much planning and not enough action, and leaders are overloaded with meetings.
Similarly, it is commonly stated that labour markets are non-existent in many
communities so there are not enough ‘real’ jobs. Other reports suggest there is

8DODSON AND SMITH
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
plenty of paid local employment, but that non-Indigenous people or Indigenous
people from elsewhere occupy the well-paid, full-time jobs; or they suggest that
there is plenty of work, but that Indigenous cultural values hold people back from
engagement in the labour force. Another factor cited is that there is too much
training but no jobs, so that people recycle through endless training schemes.
A frequently cited set of internal factors concern the problems of scale and
duplication: that is, there are too many organisations operating within
communities and many are of such a small scale that they cannot sustain
continuity of knowledge and administrative capacity. Local organisations compete
with each other for resources and staff, and undermine community decision-
making and planning. It is also said that factionalism within communities
destroys the stability of governing bodies, that community leaders and governing
boards are inept at governing, or look after their own families first and avoid their
wider responsibilities.
It has also been pointed out that the management of community governing bodies
is often in the hands of non-Indigenous people who use them as testing grounds
for economic and political experiments. It is hard for small Indigenous
organisations and remote communities to secure the services of experienced
professional staff and to keep them. The fast turnover of non-Indigenous staff
undermines good leadership and decision-making, and the lack of financial
literacy within communities and organisations means they are vulnerable to
financial malpractice and exploitation.
‘Culture’ itself is discussed in many reports as being an influential factor in
development at the local level. It is argued, on the one hand, that Aboriginal
cultural values, traditional collective structures and consensus decision making
hold back economic development. They are said to be at odds with western ideas
of capitalism and the market place, and to undermine individual and family
enterprise initiatives that require savings and profit-making. Some Indigenous
groups are characterised as being opposed to economic development because it
undermines their culturally-based behaviours and values. Other reports argue
that ‘culture’ should be central to any development initiative, but are unclear as
to how this is to be achieved.
This list of causal factors cited in the Australian literature is daunting.2 But it
must be remembered that many of these obstacles hold true not just for
Indigenous communities but for other Australian communities, especially those in
rural and remote locations. Also, some statements are misrepresentations or only
partial explanations, and some are more important than others. Taken together,
they simply emphasise that there are many factors undermining sustainable
development in communities and regions, and often the implication is that
Indigenous Australians have control over all the problems listed, and should be
trying to fix them all. Furthermore, one long list of explanations for failure does
not give us a clear idea of what can be done to improve the chances of economic
success, or where to begin down at the community level.

DISCUSSION PAPER NO. 250 9
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
The extent of Indigenous local control over the key
ingredients of development
A potentially more useful approach is to focus on success rather than failure—to
identify the key ingredients of successful economic development. From that
baseline we can determine the factors over which Indigenous communities and
their organisations actually have the greatest local control, and which they can do
something about. Such an approach should give communities and organisations
a better sense of where to focus their time and energy to get the best results.
In Table 1 we have adapted a matrix approach developed by Harvard Project
researchers to assess the links between American Indian economic development
and local areas of control (see Cornell & Kalt 1992). We have amended it to
account for the different historical, statutory, cultural and socioeconomic
conditions of Indigenous Australians.3 The Table sets out what are standardly
seen to be the key ingredients for sustainable socioeconomic development. These
are assessed in terms of how much local control (low, moderate, or high)
Indigenous communities have over them now, not in some hopeful future set of
circumstances. The key ingredients have been grouped under the headings
‘external environment’, ‘internal assets’ and ‘development strategy’.
Table 1. The degree of control that Indigenous communities exert over
the keys to sustainable development
Degree of Indigenous control Low Moderate High
External environment
Political jurisdiction
Market and development opportunity
Distance from markets
Access to capital
Internal assets
Natural resources
Human capital
Governing structures, processes and institutions
Aboriginal culture and customary economy
Development strategy
Economic policy
Development activity
Source: Adapted from Cornell & Kalt (1992) to suit Indigenous Australian conditions.
The focus of Table 1 is on whether Indigenous communities have local control
over particular factors, not on whether Australian governments, the private sector
or national representative organisations can, or should, take responsibility or

10 DODSON AND SMITH
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
exercise predominant control. Obviously all the key ingredients overlap and
interact with each other, but not all are equally easy for Indigenous communities
to control or change. In some instances, communities and regions are stuck with
what they have; in others they can try to alter the situation. The ‘rating’ we
provide is essentially subjective. It shows a close correspondence to the ratings
produced by the Harvard Project, but with lower Australian ratings for political
jurisdiction, access to capital, and control over human capital.
Low levels of control over key ingredients
In Table 1 Indigenous communities are rated as currently having a low level of
control over a number of ingredients required for creating sustainable
development. For example, while communities can work towards improving their
resource management practices and try to take advantage of te chnological
innovation, they can do little to control or improve the quantum of their natural
resource endowments, or their distance from markets.
The lack of clear Indigenous property and resource ownership rights in Australia
means that much of the resource wealth generated on lands to which people have
traditional attachments flows to the private sector and government. There is
extremely limited or non-existent revenue-raising jurisdiction on lands to which
Indigenous Australians have inalienable freehold title or native title. And there are
no tax benefits, tax exemptions. or pooled grant arrangements for Indigenous
groups equivalent to those found in the USA and Canada.
Similarly, Indigenous market opportunities are often subject to national and
global economic forces outside community control, or consist in specialised niche
markets with low turnover, high cost disabilities and erratic opportunities. Access
to the necessary quantum of reliable capital is also extremely difficult for
communities to secure—especially on Aboriginal land. Jurisdictional authority is
a matte r of Federal and State government control, and subject to external
statutory arrangements and policy conservatism. Communities cannot easily
change jurisdictional issues in the short term, and there is no equivalent to the
USA self-determination legislation, or Canadian constitutional protections.
Communities can invest in their human capital through their socialisation
practices, and by actively engaging in education and training. But the process of
socialisation has been severely disrupted in many Indigenous families. Moreover,
the structural, funding and health obstacles to full engagement in education
and training are entrenched, and the payoffs of engagement can generations
to appear.
Moderate levels of control over key ingredients
Indigenous communities are assessed as currently having a moderate degree of
control over their cultural capital, and their customary economy. Communities
can reinforce and strengthen areas of their culture and their capacity to
undertake activities within the customary (subsistence) economy. But culture is a
hard thing to engineer and direct, and innovative change takes a long time. Many

DISCUSSION PAPER NO. 250 11
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
communities find their engagement in the customary economy restricted by lack
of transport, lack of access to traditional lands and funding, restrictive external
regulations, and lack of statutory recognition.
High levels of control over key ingredients
Table 1 suggests that the key ingredients over which Indigenous communities can
currently exercise the greatest degree of control are their own local processes and
structures for governing themselves, and their local development policies and
strategies. Communities and their representative organisations can create the
local conditions for more legitimate and broadly representative rule, more effective
decision-making, capable delivery of services and collective action.
Arguably then, the best approach for communities to follow in trying to achieve
sustainable economic development would be to focus initially on those key
ingredients over which they have the greatest degree of local control; that is, their
governance arrangements.
The consequences of focusing on areas of poor control
On the evidence available, many Indigenous communities and their organisations
have been going about development backwards, getting caught up in issues over
which they have little or no control. The most common way communities and
organisations proceed is to focus all their energy on:
• starting up a never-ending variety of new business projects that are
uninformed by wider ‘whole of community’ needs and realities;
• responding to externally driven development proposals and other people’s
economic agendas;
• chasing transitory opportunities, usually single major development projects;
• chasing transitory grant funding, and tying their scarce local expertise into
whatever repackaged programs are on offer from government and the private
sector; and
• focusing on short-term outcomes where success is usually measured by
immediate economic impacts such as money and jobs (neither of which seem
to last).
Given local conditions of socioeconomic disadvantage and great need, this
approach is both tempting and understandable. But the result is that the ove rall
direction of development in communities is usually haphazard, and easily
influenced by strong individuals who come and go. Many Indigenous communities
are littered with failed economic projects that started off well, but turned bad
when:
• they failed to secure capital or the grant money ran out;
• community leaders and organisations failed to protect profits on behalf of
members;
• enterprises could not attract customers, or external market forces changed;

12 DODSON AND SMITH
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
• project managers found themselves overwhelmed by the workload, or by
conflicting and politicised instructions from community leaders; and
• good projects were undermined by community factionalism or organisational
politics.
This ‘Tatslotto’ approach to economic development produces the inevitable
outcome—the odds are against winning, and most of the time communities lose
their money.
Building effective governance: an alternative approach
If development is approached by starting from those areas where communities
and their organisations have the greatest control, then the ratings set out in Table
1 strongly suggest they should concentrate on building up stable, capable and
legitimate governing institutions, structures and processes. This will provide
communities and regions with the solid foundation and capacity to make sound
decisions about development and to plan for the future.
The international evidence for the merits of this approach (for both indigenous
and non-indigenous groups) is clear. It is only when effective governance and
holistic development strategies are in place that economic and other development
projects have the chance of becoming sustainable (see Cornell et al. 2001; Cornell
& Gil-Swedberg 1995; Cornell & Kalt 1992, 1995; Hylton 1999; Institute of
Governance (IOG) 1999; Jorgensen 2000; Plumptre & Graham 1999; World Bank
1994). In other words, sustainable development is—fundamentally—a governance
issue.
The approach advocated here is not proposed as a ‘fast-track’ answer to
development. Nor are we inferring there is a neat linear progression in the steps
that need to be undertaken. Communities do not have to suspend all
development initiatives until they get their governance in order, but neither
should they embark on new development initiatives without also commencing the
harder work of building effective governance. For many communities and their
organisations this may mean having to create a whole new mindset; and it will be
hard not to fall back into reactive mode. But focusing on the fundamental step of
first getting good governance has been shown, internationally, to work with other
indigenous groups, and is worth pursuing in Australia.
Good governance: the core ingredients and principles
In the following section we propose a set of core ingredients and operating
principles which communities and their organisations should consider if they
want to build more effective governance. The list is based on our own work with
communities and organisations over many years, as well as the conclusions of
many other researchers in Australia. It also draws on, and owes a great debt to,
the groundbreaking work of researchers from the Harvard Project and the Native

DISCUSSION PAPER NO. 250 13
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
Nations Institute in the USA, and to Neil Sterritt’s governance research and
workshops with Canadian First Nations.
There is no single model of good governance for Indigenous communities and
regions, so there is little value in a checklist approach. Different structures and
processes will suit different groups. Nevertheless, whatever form or level of
aggregation of governance is developed, communities and regions will all face
similar generic challenges—structural, institutional, financial, administrative,
corporate and ethical. To address these common challenges, Indigenous
communities do not each need to re-invent the governance wheel, in isolation
from the be st practice that is being developed in the country and overseas. There
are universally accepted guiding principles to inform ‘governance building’ at the
local level. They include the need for transparency, certainty of resources and
authority, equity and fairness, flexibility and choice, internal and external
accountability, procedures for appeal and redress, efficiency and effectiveness,
legitimacy and mandate, participation, leadership, strategic vision and capacity.
If communities want to strengthen their capacity for more effective governance in
these areas, they will need to actively consider and promote certain key
ingredients and principles within their governing bodies. A discussion of these
now follows.
Stable and broadly representative organisational structures
Indigenous community and regional governing bodies usually undertake a very
wide range of management, administrative, policy-making, service delivery,
financial, socioeconomic, legal, political and cultural roles. In order to undertake
these duties, different areas of functional responsibility need to be clearly
demarcated and coordinated. How well this is done within a governing body will
directly determine the extent of its capacity for effective and consistent decision-
making and action.
Organisational structures for governance can take many different forms and still
be effective. But they all need to be able to support local objectives and the sound
management of internal assets. They also need to be able to broadly represent the
rights and interests of all community and regional members. Often the governing
structures of communities have been externally imposed, or at least promoted,
and then they are locally adapted. But they are not always appropriate to
community circumstances or to representing the mixed cultural traditions and
statutory rights of residents.
When governing structures regularly change, and when key functional
responsibilities are ignored, poorly coordinated, or given undue priority over
others, then ineffectiveness and conflict are increased—for the organisation and
for community residents. When governing structures represent the interests of a
few, or of one class of residents over others, their legitimacy and local mandate
can quickly be withdrawn by marginalised community members. A common form
of Indigenous withdrawal is seen in people’s refusal to participate in local

14 DODSON AND SMITH
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
governance processes, or to feel any sense of personal responsibility for improving
or addressing governance problems.
Capable and effective institutions
Having good governance means being capable of future -oriented planning,
problem solving, revising objectives, re-designing structures, and taking action.
To do this governing bodies must be backed up by supportive institutions. No
social group can simply rely on the goodwill of either its leaders or its citizens, or
on their promises to do the right thing. Social groups need institutional
mechanisms. These are the ‘rules of the game’—both formal and informal—that
regulate and delimit the behaviour and authority of individuals and groups (see
Cornell 2002, Cornell et al. 2001; Sterritt 2001).
Institutional ‘rules’ for a community organisation include, for example, its
constitution, the policies set out by the governing body, the charters, laws and
regulations which direct the operation of the community, agreed standards of
behaviour, business codes that determine development, the rules for decision-
making, elections, voting and meetings, and rules for setting out the roles and
responsibilities of the governing board, executive, management and staff.
Importantly, these institutions should be informed by culturally–endorsed
standards of what constitutes right and wrong behaviour, of who has legitimate
knowledge, and who has the ‘right’ or authority to represent community residents
and regional interests.
In today’s world, these institutions or ‘rules of the game’ for how governing bodies
and leaders should behave cannot simply stay inside people’s heads. They must
be plainly set out, consistent, and hard to change, so that strong individuals
cannot undermine them for their own personal or political interests.
Sound corporate governance
Institutional capacity informs corporate governance which, in turn, lays the solid
foundation for overall governance. For Indigenous communities and regional
organisations, corporate governance is the system by which governing bodies are
directed and managed.
Requirements for good corporate governance have recently been set out for
Australian companies by the Australian Stock Exchange (ASX). Even given
cultural differences, a number of these are directly relevant to Indigenous
community and regional governing bodies (ASX 2003).4 Good corporate
governance requires:
• that the authority, roles and responsibilities of leaders, boards and managers
are clearly set out in public policies, and given effect to;
• that decision-making is responsible and fair;
• that governing boards are of an effective composition, size and level of
experience to adequately discharge their duties;

DISCUSSION PAPER NO. 250 15
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
• that boards and management are able to understand their roles and
responsibilities, evaluate risks, and to safeguard and facilitate the rights and
interests of all their members;
• that these roles and responsibilities are periodically reviewed; and
• that remuneration for leaders, managers and boards is transparently defined
in terms of actual performance against these (ASX 2003: 11; Sterritt 2001).
These areas of corporate best practice are missing from many Indigenous
community and regional governing bodies.
Indigenous leaders and governing boards or committees have to know exactly
what they can and cannot do. These understandings should be set out in clear
rules that everyone knows, and which are enforced. Corporate best practice can
be facilitated by having formal accountability and performance checks and
balances for leaders, boards and executive managers written into constitutions,
corporate charters, and by developing service and performance agreements. A
distribution of governing roles and authority across a governing organisation will
also help to ensure that no single individual has unfettered powers. Formal public
disclosure should also be made of the division of responsibilities reserved to
leaders, governing boards and delegated managers.
The limitation and separation of powers
Like all other communities, Indigenous communities need systems and processes
which prevent those people who exercise legitimate powers from using that power
for their own personal gain and from changing the rules to suit their own
interests. Self-determination should not mean ‘selfish’ determination. Such
behaviour causes conflict and can destroy a community or regional governing
body’s capacity for generating sustained development.
Preferably, leaders and boards should make the overarching policies, enforce the
rules, and provide strategic direction. But leaders and governing boards should
not be routinely interfering with the daily implementation of those policies by
their managers and staff. Inserting local politics and the interests of powerful
leaders into day-to-day business decisions invariably runs economic and other
development projects into the ground. The Harvard Project reported that the
chances of Indian business being profitable increased by over 400 per cent when
they were insulated from such local political interference (Cornell & Kalt 1995).
Indigenous governing bodies need to develop and promote a clear separation
between the powers and responsibilities of leaders and boards, and the daily
management of community businesses and services. Having independent
management committees helps to protect community businesses and projects
from interference. So does the establishment of transparent financial reporting,
written and well-communicated codes of conduct, minuted board meetings, and
written employment contracts which safeguard as well as encourage performance
and fair dealing. These measures also help leaders and governing boards resist
the pressures on them to selectively help family and friends.

16 DODSON AND SMITH
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
Fair and reliable dispute resolution and appeal processes
Good governance involves stewardship—that is, being able to manage the affairs
of all community and regional members in a way which safeguards and facilitates
the effective exercising of their different rights and interests. Indigenous governing
bodies therefore need to be able to address conflicts of interest or corrupt
behaviour amongst leaders or staff, respond to appeals over unfair dealings, and
adjudicate the grievances of their members, and to do so in a consistent and non-
politicised way.
Good governance will not be easily built on a system of dispute resolution that is
based on appeals to family connections or to a romanticised view of how things
were done in the past. This does not work very well for business in any society,
and people often question the inde pendence and fairness of decisions made by
individuals who are closely involved in the disputed issue.
The rules for decision making, and procedures for dispute resolution and appeal
need to be formalised to a degree. A crucial issue for most Indigenous governing
bodies is to devise mechanisms for fair dealing that will be locally supported and
effective. For example, communities may want to consider establishing ‘internal’
mechanisms such as a committee of elders, Indigenous ethics committee,
processes of delegation or creating local community courts. Or they might seek to
establish external mechanisms such as recourse to a nominated mediator or
independent arbitrator, or secure access to the services of representative bodies
or non-government organisations with dispute resolution functions.
The system must enable binding decisions to be made when leaders or governing
bodies act outside their authority or corruptly. So long as governing bodies are
seen to be making politicised decisions, or failing to act against corrupt
behaviour, they will not be viewed as legitimate by community and regional
members. Whatever mix of internal culturally-based and external mechanisms is
decided upon, all appeals processes and outcomes should be fully documented.
Effective financial management and administrative systems
Governance is not only about structures, processes and power; it is also about
resources. Sound governance requires access to, and control over, financial,
social, economic and natural resources and technology. Without an effectively
resourced capacity for governance, there is unlikely to be sustained community or
regional development (Australia Institute 2000; Smith 2002c). The design of
sound financial management and administrative systems is a fundamental
component of good governance. The related capacity of Indigenous leaders and
members of governing boards to understand their own financial responsibilities,
and to provide financial due diligence and oversight is also a critical ingredient.
To develop their financial capacity, governing bodies need access to accredited
financial management expertise, simple and workable local financial systems,
local financial management training, financial mentoring, local banking services,
and effective financial backup support (see Aucote 2003; IOG 1997, 1998;
Smith 2002c). All financial procedures, policies and guidelines should be

DISCUSSION PAPER NO. 250 17
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
documented in writing. Another core ingredient of good financial governance is
the development and safeguarding of the integrity of financial reporting.
Governing bodies should publish periodic reports of their financial status and
dealings, and have these independently verified. Preferably, best-practice financial
management systems should be shared between communities and regions. This
would help buffer governing bodies against the vagaries of changing levels of staff
expertise and financial misbehaviour.
Good governance relies upon a professional administration staffed by competent
people who operate in terms of community policy and strategies rather than their
own. Community and regional governing bodies also need to develop their own
local record systems, written employment policies, and standardised and fair
rates of pay and work conditions for leaders, boards, management and staff.
Written employment contracts should be developed for all staff and organisational
leaders which tie remuneration to individual performance against community
policy and service objectives.
Simple and locally relevant information management systems
Information management is a governance issue. All too often evaluation of
program and service outcomes is a ‘top-down’ process imposed on communities
and organisations. If governing bodies want to be able to plan for, and facilitate
community members providing their informed consent to, future development,
they will need a capacity to monitor their own performance and outcomes, and to
rectify operational problems (Smith 2002a; Taylor 2003).
The local collation and management of community and regional profile data for
planning and evaluation purposes is a basic component of good governance. Local
Indigenous data systems could include, for example, information about
community and regional assets, locally meaningful indicators of current and
future population change, data on health, education, training, employment,
welfare and income levels, community grant funding and service delivery, as well
as other social and cultural data deemed relevant to future planning.
Governing bodies will need to develop the capacity to collect and interpret this
basic information. People resident in communities and regions are usually in the
best position to know the local facts, and to assess what kinds of information are
most relevant to their development goals and the diversity of their circumstances.
Having a local capacity for information management and analysis will provide
governing bodies with a solid basis on which to make informed decisions and
provide their informed consent to development proposals, to set realistic
development strategies, and to plan for the future changes in their populations.
Regularly updating local data systems will also be necessary. This will help to
ensure that development plans and strategies are kept up to date rather than
becoming static documents that are quickly outdated. Community management
of information systems will require local access to up to date technological
support. Local training in these areas will be needed to enable community
residents to take up valued local jobs. Administrative, information and reporting

18 DODSON AND SMITH
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
systems should not be cumbersome or elaborate—simple and straightforward
systems usually work best.
Effective development policies and realistic strategies.
The challenge of good governance goes beyond simply acquiring the financial and
other resources needed at community and regional levels. The experience of
indigenous groups in Canada and the USA echoes the warnings of the World
Bank which now judges that underdeveloped countries have been held back
not by a financing gap, but by an ‘institutions’ and ‘policy’ gap (World Bank
1994: 33-5).
The economic system of most Indigenous Australian communities has been
characterised as hybrid—a mix of customary subsistence production, welfare
income, government grant funds, business and market income, private sector
resource development and project income (Altman 2001). As noted in Table 1,
communities and regions have little direct control over many of the national and
global components of this wider economy, but can nevertheless exercise
important control over the local direction of development.
To do so, governing bodies and their members will need to come to some agreed
understanding about two key issues: first, what kind of local economic
development system they want to support, and second, which economic strategies
and activities they will pursue to achieve that. Among the important issue s they
will need to consider at the local level, for example, are the extent to which people
want or need to rely on public and private sector funding; how that funding is
best managed and used; the ongoing value and role of customary economic and
cultural activities; the management and use of the land base in the context of
cultural and environmental values; the extent to which businesses are
community-owned, individually owned or family based; and how the different
rights and responsibilities of traditional owners and other Indigenous residents in
communities are to be recognised and facilitated.
Governing bodies should be able to formulate broad policies which draw on the
relevant expertise of residents and traditional owners, and which encapsulate
their understandings about preferred directions. Then they will need to devise
strategies that set out future community and regional development objectives and
activities, and the local controls they will need to establish over development. If
this strategic planning is not done, development will simply happen by default
and is unlikely to be sustainable.
Cultural ‘match’ or ‘fit’
Underlying all these key ingredients and principles of good governance is the
issue of legitimacy and mandate. Each community and region will have to find
some degree of match or ‘common ground’ between the types of governing
structures and procedures it wants to develop, and the culturally-based
standards, values and systems of authority of community members. For example,
common ground must be found about issues such as who should hold power,

DISCUSSION PAPER NO. 250 19
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
how power should properly be exercised, how decision making and disputes
should be handled, and about the respective rights and responsibilities of
different members and leaders. The more a governing body finds some cultural
‘fit’ or ‘match’ in these matters, the more it will secure the ongoing mandate of
its members.
The concept of ‘cultural match’ has recently been introduced into the Australian
debate by the Harvard Project research team (see Begay, Cornell & Kalt 1998;
Cornell 2002; Kalt 1996). The Macquarie Dictionary defines the term ‘match’ as
‘being able to correspond with a counterpart; to cope with another as an equal; to
fit together, as two things; or to form a suitably associated pair or alliance’. A
‘cultural match’, then, involves a complex two-way process of adjustment and
innovation. Some connections and relationships will need to be newly created,
and some areas of autonomy will need to identified and protected, in order to
facilitate effective and capable governance.
The concept has a certain resonance with the deep cultural imperative or ‘tension’
which seems fundamental to traditional Indigenous Australian webs of social and
political relations. This is the tension between a preference for individual and
group autonomy on the one hand (marked by a tendency towards localism,
smallness of scale and separatism), and for connectedness on the other (marked
by wider territorial and cultural alliances, and a desire for larger scale political
and economic action).
Problems arise for many Indigenous governing bodies when they lose sight of the
fact that their ongoing legitimacy is often grounded, at the local level, in
culturally-based values, priorities and behaviours. But achieving a cultural match
to secure a mandate is difficult, especially when so many communities are the
historical constructs of colonisation and a mix of cultural traditions. Cultural
match is not simply a matter of importing romanticised views of traditional
Indigenous structures or authority, and expecting them to handle economic
development decisions, financial accounts and daily business management.
Creating a cultural match is more about developing strategic and realistic
connections between extant cultural values and standards, and those required by
the world of business and administration. As Kalt (1996) notes, it is about
‘cultural appropriateness with teeth’. Most importantly, while Indigenous
governance arrangements need to be informed by local cultural standards if they
are to be regarded as legitimate by community members, the governing
arrangements also have to work—governing bodies have to be practically capable
of responding and taking action in the contemporary environment.
Conclusion: getting good governance for sustainable
development
The diversity of Indigenous culture suggests there is not going to be a ‘one size
fits all’ model of governance to suit all circumstances. Different structures and
processes are likely to suit different groups. But Indigenous Australians also

20 DODSON AND SMITH
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
share many core cultural traits, face common obstacles in securing sustainable
development, and experience similarly high levels of disadvantage. The set of
guiding principles and core ingredients laid out above for building ‘good
governance’ are based on the shared Indigenous experience of such connections
and challenges. Their practical value has been identified by long-term research
in the USA and Canada, and is backed up by the local experience of
many Australian Indigenous leaders and researchers. They appear to
be universally accepted as applying across cultural boundaries. They could
usefully be considered by Indigenous governing bodies as key benchmarks for
good governance.
We have suggested in this paper that strengthening certain key ingredients and
principles for good governance will greatly enhance a community or regional
governing body’s political and business stability. Enhanced capacity in these
areas will enable a governing body to fairly represent all their constituents,
become less dependent upon the erratic quality of people employed as staff, to
resolve conflicts over development activities more effectively, to plan for future
population changes, and to create an environment that is conducive to sustained
socioeconomic development.
Importantly, these core ingredients and principles of good governance are not
going to be implemented in Canberra or Darwin, by researchers or consultants, or
even by distant departments or representative Indigenous organisations. There
are many issues for which those agencies and groups can and should take
responsibility. But the ingredients and principles described here can only be
developed if community and regional leaders and organisations recognise their
importance, and create local solutions that take them into account. This may
require a new mindset in many communities and regions, and substantial effort
will be required to build local capacities for good governance. But the bottom line
is that without improved governance capacity, communities are unlikely to be
able to make informed decisions about what kind of local development they want
to support, and which strategies and activities will achieve better outcomes.
Without improved governance capacity, there is unlikely to be sustained
development, and valuable opportunities will be squandered.
Notes
1. In 1998, Diane Smith and Julie Finlayson coordinated a visit to Australia by Neil
Sterritt and other Gitxsan representatives from British Columbia to discuss the
findings and native title implications of the Delgamuukw case—a Canadian land
rights case conducted in the courts over a 10-year period which compares in
significance to Mabo No. 2 in Australia. Subsequently, in 2001, Smith undertook
professional development study leave and had further discussions about Indigenous
governance and economic development with Neil Sterritt in Canada and with
Professor Stephen Cornell and Dr Manley Begay from the Harvard Project and the
Native Nations Institute (NNI) at the University of Arizona, Tucson. In 2002,

DISCUSSION PAPER NO. 250 21
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
Reconciliation Australia facilitated a visit to Australia of these same indigenous
leaders and researchers so they could participate in a national conference on
Indigenous governance in Canberra. And in 2003, Smith again visited the Harvard
Project and NNI Directors in Tucson for ongoing discussions about the possible
establishment of a ‘Harvard-style’ longitudinal Indigenous governance research
project in Australia.
2. This set of factors bears a striking similarity to those that have been identified over a
period of 14 years by researchers from the Harvard Project in the USA (see Cornell &
Kalt 1992), and by the Canadian Royal Commission on Aboriginal People (see Royal
Commission 1996, vol 2 Chapter 5; and Wien 1999).
3. There are also important similarities between the structural conditions experienced
by Australian Indigenous and American Indian societies. These similarities reinforce
the relevance of the Harvard matrix for Australian comparative purposes (see Daly &
Smith 2002).
4. We are beholden to Karen Aucote for pointing out the ASX report (2003) on
Australian company corporate governance and best practice, and for her input into
ongoing discussions about financial best practice for Indigenous communities. These
best practice guidelines are similar to those advocated by the Toronto Stock
Exchange, and used by Neil Sterritt (2001) in governance workshops with Canadian
First Nations.
References
Altman, J.C. 2001. ‘Sustainable development options on Aboriginal land: The hybrid
economy in the twenty-first century’, CAEPR Discussion Paper No. 226, CAEPR, ANU,
Canberra.
Aucote, K. 2003. ‘Financial management: The regional participation support program’,
Unpublished conference paper presented to the Seizing Our Economic Future:
Indigenous Economic Development Forum, Northern Territory Government, Alice
Springs, 6–7 March 2003.
Australian Stock exchange (ASX) 2003. Principles of Good Corporate Governance and Best-
Practice Re co mmen dations, ASX Corporate Governance Council, Sydney.
Australia Institute 2000. Resourcing Indigenous Development and Self-Determination,
Unpublished report to the ATSIC National Policy Office, Strategic Development Team,
ATSIC, Canberra.
Begay, M., Cornell, S. and Kalt, J. 1998. Making Research Count in Indian Country: The
Harvard Project on American Indian Economic Development, Malcolm Wiener Center for
Social Policy and Harvard Project on American Indian Economic Development, J.F.
Kennedy School of Government, Harvard University, Boston, MA.
Cornell, S. 1993. Accou ntab il i ty, Legitimac y and the Foundatio ns of Native Sel f -Governance,
Malcolm Wiener Center for Social Policy and Harvard Project on American Indian
Economic Development, J.F. Kennedy School of Government, Harvard University,
Boston, MA.

22 DODSON AND SMITH
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
Cornell, S. 2002. ‘What is institutional capacity and how can it help American Indian
Nations meet the welfare challenge?’ Paper prepared for the symposium on Capacity
Building and Sustainability of Tribal Governments, Washington University, St Louis,
MO.
—— and Gil-Swedberg, M. 1995. ‘Sociohistorical factors in institutional efficacy: Economic
development in three American Indian cases’, Economic Development and Cultural
Change, 43 (2): 239–68.
—— and Kalt, J. 1992 ‘Reloading the dice: Improving the chances for economic
development on American Indian reservations’, in S. Cornell and J. Kalt (eds), What
Can Tribes Do? Strategies and Institutions in American Indian Economic development,
American Indian Study Center, Los Angeles, CA.
—— and —— 1995. Successful Economic Development and Heterogeneity of Government
Form on American Indian Reservations, Malcolm Weiner Center for Social Policy,
Harvard Project on American Indian Economic Development, J.F. Kennedy School of
Government, Harvard University, Boston, MA.
——, Jorgensen, M., Brown, E., Whitaker, L., et al. 2001. Welfare, Work and American
Indian s: Th e Im pac t o f Welfare R ef o rm, A report to the National Congress of American
Indians, by the Udall Center for Studies in Public Policy, University of Arizona, Tucson
and the K.M. Buder Center for American Indian Studies, Washington University, St
Louis, MO.
Crough, G. 2001. ‘The Northern Territory government’s local government reform agenda’,
Unpublished paper prepared for the Central Land Council, May 2001.
Daly, A. and Smith, D.E. 2002. ‘Reforming Indigenous welfare policy: Salutory lessons and
future challenges for Australia from the US experience’, CAEPR Discussion Paper No.
241, CAEPR, ANU, Canberra.
de Alcantara, C.H. 1998. ‘Uses and abuses of the concept of governance’, International
Social Science Journal, 155: 105–13.
Dodson, M. 1996. ‘Assimilation versus self-determination’, North Australia Research Unit
Discussion Paper No. 1, NARU, ANU, Darwin.
—— 2002. ‘Mining, minerals and sustainable development’, Unpublished paper presented
to the international workshop Putting Principles into Practice: Sustainable Development
Conference, Minerals Council of Australia, 10–15 November 2002, Newcastle, NSW.
—— and Pritchard, S. 1998. ‘Recent developments in Indigenous policy: The abandonment
of self-determination?’ Indigenous Law Bulletin, 4 (15): 4–6.
—— and Strelein, L. 2001 ‘Australia’s Nation Building: Renegotiating the Relationship
between Indigenous Peoples and the State’, University of New South Wales Law
Journal.
Hawkes, D.C. 2001. ‘Indigenous peoples: Self-government and intergovernmental
relations’, International Social Science Journal, 167: 153–61.
Human Rights and Equal Opportunity Commission (HREOC) 2002. Social Justice Report,
2001, Report of the Aboriginal and Torres Strait Islander Social Justice
Commissioner, No. 2, HREOC, Sydney.

DISCUSSION PAPER NO. 250 23
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
Human Rights and Equal Opportunity Commission (HREOC) 2003. Social Justice Report,
2002, Report of the Aboriginal and Torres Strait Islander Social Justice
Commissioner, No. 3, HREOC, Sydney.
Hylton, J.H. (ed.) 1999. Aboriginal Self-Government in Canada: Current Trends and Issues,
Purich Publishing, Saskatchewan, Alberta.
Institute of Governance (IOG) 1997. Towards a Fiscal Relations Framework for Self-
Government: Summary of the Major Conclusions of the Royal Commission on
Aboriginal Peoples, Unpublished report, IOG, Ottawa.
—— 1998. Intergovernmental Fiscal Relationships: An International Perspective,
Unpublished report, IOG, Ottawa.
—— 1999. Understanding Governance in Strong Aboriginal Communities, Phase One:
Principles and Best Practices from the Literature, Unpublished report in collaboration
with York University and CESO Aboriginal Services, Saskatchewan Federated Indian
College, IOG, Ottawa.
Jardine-Orr, A., McGrath, N., Spring, F., and Anda, M. 2003. Indigenous Housing and
Governance: Case Studies from Remote Communities in Western Australia and Northern
Territory’, Australian Housing and Urban Research Institute, Western Australia
Research Centre, Perth.
Jorgensen, M.R. 2000. Bringing the Background Forward: Evidence from Indian Country
on the Social and Cultural Determinants of Economic Development, PhD thesis, J.F.
Kennedy School of Government, Harvard University, Boston, MA.
Kalt, J. 1996. ‘Submission’, to the United States Committee on Indian Affairs, by the
Harvard Project on American Indian Economic Development, J.F. Kennedy School of
Government, Harvard University, September 17, 1996, Washington DC.
Lea, D. and Wolfe, J. 1993. ‘Community development planning and Aboriginal community
control’, North Australia Research Unit Discussion Paper No. 14, NARU, ANU, Darwin.
Mantziaris, C. and Martin, D. 2000. Native Title Corporations: A Legal and Anthropological
Analysis, Federation Press, Sydney.
Martin, D. and Finlayson, J. 1996. ‘Linking accountability and self-determination in
Aboriginal organisations’, CAEPR Discussion Paper No. 116, CAEPR, ANU, Canberra.
Nettheim, G., Meyers, G. and Craig, D. (eds) 2002. Indigenous Peoples and Governance
Structures: A Comparative Analysis of Land and Resource Management Rights,
AIATSIS, Canberra.
Peters-Little, F. 2000. ‘The community game: Aboriginal self-definition at the local level’,
AIATSIS Research Discussion Paper No. 10, AIATSIS, Canberra.
Plumptre, T. and Graham, J. 1999. Governance and Good Governance: International and
Aboriginal Perspectives, Unpublished report, IOG, Ottawa.
Rowse, T. 1992. Remote Possibilities: The Aboriginal Domain and the Administrative
Imagination, NARU, ANU, Darwin.
—— 2001. ‘Democratic systems are an alien thing to Aboriginal culture,’ in M. Sawer and
G. Zappala (eds), Speaking for the People: Representation in Australian Politics,
Melbourne University Press, South Carlton, Vic.

24 DODSON AND SMITH
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
Royal Commission on Aboriginal People 1996. Report: Restructuring the Relationship, Vol.
2, Pt. 2, Canada Communication Group Publishing, Ottawa.
Sanders, W. 1995. ‘Australian fiscal federalism and Aboriginal self-government: Some
issues of tactics and targets’, CAEPR Discussion Paper No. 90, CAEPR, ANU, Canberra.
—— 2002. ‘Towards an Indigenous order of Australian government: Rethinking self-
determination as Indigenous affairs policy’, CAEPR Discussion Paper No. 230, CAEPR,
ANU, Canberra.
—— and Arthur, W.S. 2001. ‘Autonomy rights in Torres Strait: From whom, for whom, for
or over what?’ CAEPR Discussion Paper No. 215, CAEPR, ANU, Canberra.
Smith (von Sturmer), D.E. 1976. Past Masters Now: A Study of the Relationship Between
Anthropology and Australian Aboriginal Societies, Unpublished Honours thesis,
University of Queensland, Brisbane.
Smith, D.E. 1995. ‘Representative politics and the new wave of native title organisations’,
in J. Finlayson and D. Smith (eds), Native Title: Emerging Issues for Research, Policy
and Practice, CAEPR Research Monograph No. 10, CAEPR, ANU, Canberra.
—— 2002a. ‘Community Participation Agreements: A model for welfare reform from
community-based research’, CAEPR Discussion Paper No. 223, CAEPR, ANU,
Canberra.
—— 2002b. ‘Jurisdictional devolution: Towards an effective model for Indigenous
community self-determination’, CAEPR Discussion Paper No. 233, CAEPR, ANU,
Canberra.
—— 2002c. ‘Towards a fiscal framework for resourcing Indigenous community governance
in Australia’, Paper presented to the Indigenous Governance Conference,
Reconciliation Australia, 3–5 April 2002, Canberra [available on the www at
www.reconciliationaustralia.org].
——and Finlayson, J. 1997 (eds) Figh ting Over Countr y: Anthropol ogi cal Perspecti ves,
CAEPR Research Monograph No. 12, CAEPR, ANU, Canberra.
Sterritt, N. 2001. First Nations Governance Handbook: A Resource Guide for Effective
Councils, Prepared for the Minister of Indian and Northern Affairs, Canada.
Stoker, G. 1998. ‘Governance as theory: Five propositions’, International Social Science
Journal, 155: 17–28.
Sullivan, P. 1987. ‘Aboriginal community representative organisations: Intermediate
cultural processes in the Kimberley region, Western Australia’, East Kimberley Impact
Assessment Project Working Paper No. 22, Centre for Resource and Environmental
Studies, ANU.
—— 1995. ‘Beyond native title: Multiple land use agreements and Aboriginal governance in
the Kimberley’, CAEPR Discussion Paper No. 89, CAEPR, ANU, Canberra.
Taylor, J. 2003. ‘Data issues for regional planning in Aboriginal communities’,
Unpublished seminar paper presented to the NARU seminar series, Contemporary
Indige nou s Issues in the North , NARU, ANU, Darwin.

DISCUSSION PAPER NO. 250 25
CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
United Nations Department of Economic and Social Affairs 2002. Global Ch allenge , Global
Opportunity, Trends in Sustainable Development, World Summit on Sustainable
Development, 26 August–4 September 2002, Johannesburg.
Westbury, N.D. 2002. The Importance of Indigenous Governance and its Relationship to
Social and Economic Development, Unpublished Background Issues Paper produced
for Reconciliation Australia, Indigenous Governance Conference, 3–5 April, Canberra.
—— and Sanders, W. 2000. ‘Governance and service delivery for remote Aboriginal
communities in the Northern Territory: Challenges and opportunities’, CAEPR Working
Paper No. 6, CAEPR, ANU, Canberra [available on the www at
[http://www.anu.edu.au/caepr/working.php].
Wien, F. 1999. ‘Economic development and Aboriginal self-government: A review of the
implementation of the report of the Royal Commission on Aboriginal Peoples’, in J.H.
Hylton (ed.), Aboriginal Self-Government in Canada: Current Trends and Issues, Purich
Publishing, Saskatchewan.
Wolfe, J. 1989. ‘That Community Government Mob’: Local Government in Small Northern
Territory Communities, NARU, ANU, Darwin.
World Bank 1994. Governance: The World Bank’s Experience, The World Bank,
Washington, DC.
World Commission on Environment and Development (WCED) 1987. Our Common Future
(The Brutland Report), Oxford University Press, Oxford.

CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
Centre for Aboriginal Economic Policy Research
Publications
For information on earlier CAEPR Discussion Papers and Research Monographs please contact:
Publication Sales, Cen tre for Aboriginal Ec onomic Polic y Research, The Austr alian N ational University, C anberra,
ACT, 0200, Telephone: 02–6125 8211, Facsimile: 02–6125 2789. Information on CAEPR, and abstracts or
summari es of all CAEPR print publications and those published electronicall y, can be found at the following
WWW address: htt p://www.anu.edu.au/caepr/
MONOGRAPH SERIES
7. Mabo and Native Title: Origins and Institutional Implications, W. Sanders (ed.), 1994.
8. The Housing Need of Indigenous Australians, 1991, R. Jones, 1994.
9. Indigenous Australians in the Economy: Abstracts of Research, 1993–94, L.M. Roach
and H.J. Bek, 1995.
10. Native Title: Emerging Issues for Research, Policy and Practice, J. Finlayson and
D.E. Smith (eds), 1995.
11. The 1994 National Aboriginal and Torres Strait Islander Survey: Findings and Future
Prospects, J.C. Altman and J. Taylor (eds), 1996.
12. Fighting Over Country: Anthropological Perspectives, D.E. Smith and J.D. Finlayson
(eds), 1997.
13. Connections in Native Title: Genealogies, Kinship and Groups, J.D. Finlayson,
B. Rigsby and H.J. Bek (eds), 1999.
14. Land Rights at Risk? Evaluations of the Reeves Report, J.C. Altman, F. Morphy and
T. Rowse (eds), 1999.
15. Unemployment Payments, the Activity Test and Indigenous Australians:
Understanding Breach Rates, W. Sanders, 1999.
16. Why Only One in Three? The Complex Reasons for Low Indigenous School Retention,
R.G. Schwab, 1999.
17. Indigenous Families and the Welfare System: Two Community Case Studies,
D.E. Smith (ed.), 1999.
18. Ngukurr at the Millennium: A Baseline Profile for Social Impact Planning in South East
Arnhem Land, J. Taylor, J. Bern and K.A. Senior, 2000.
19. Aboriginal Nutrition and the Nyirranggulung Health Strategy in Jawoyn Country,
J. Taylor and N. Westbury, 2000.
20. The Indigenous Welfare Economy and the CDEP Scheme, F. Morphy and
W. Sanders (eds), 2001.
21. Health Expenditure, Income and Health Status among Indigenous and Other
Australians, M.C. Gray, B.H. Hunter and J. Taylor, 2002.
22. Making Sense of the Census: Observations of the 2001 Enumeration in Remote
Aboriginal Australia, D.F. Martin, F. Morphy, W.G. Sanders and J. Taylor, 2002.

CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
RECENT DISCUSSION PAPER SERIES
230/2002 Towards an Indigenous order of Australian government: Rethinking self-
determination as Indigenous affairs policy, W. Sanders.
231/2002 Popul atio n fu tures i n the Australian desert, 2001–2016 , J. Taylor.
232/2002 Autonomy and the Community Development Employment Projects scheme,
W.S. Arthur.
233/2002 Jurisdictional devolution: Towards an effective model for Indigenous
community self-determination, D.E. Smith.
234/2002 Indigenous community stores in the 'frontier economy': Some competition
and consumer issues, S. McDonnell and D.F. Martin.
235/2002 Some competition and consumer issues in the Indigenous visual arts
industry, J. C. Altman, B.H. Hunter, S. Ward and F. Wright.
236/2002 Indigenous residential treatment programs for drug and alcohol problems:
Current status and options for improvement, M. Brady.
237/2002 Journey without end: Reconciliation between Australia’s Indigenous and
settler peoples, W. Sanders.
238/2002 Decentralisation, population mobility and the CDEP scheme in central
Cape York Peninsula, B.R. Smith.
239/2002 Welfare and the domestic economy of Indigenous families: Policy
implications from a longitudinal survey, A. Daly, R. Henry and D. Smith.
240/2002 Estimating the components of Indigenous population change, 1996–2001,
Y. Kinfu and J. Taylor.
241/2002 Reforming indigenous welfare policy: Salutary lessons and future
challenges for Australia from the US experience, A. Daly and D.E. Smith.
242/2002 Philanthropy, non-government organisations and Indigenous development,
R.G. Schwab and D. Sutherland.
243/2003 Options for benchmarking ABS population estimates for Queensland
Aboriginal and Torres Strait Islander communities, J. Taylor and M. Bell.
244/2003 Creating a sense of ‘closure’: Providing confidence intervals on some
recent estimates of Indigenous populations, B.H. Hunter and
M.H. Dungey.
245/2003 The Tasmanian electoral roll trial in the 2002 ATSIC elections,
W. Sanders.
246/2003 Indigenous economic futures in the Northern Territory: The demographic
and socioeconomic background, J. Taylor.
247/2003 Innovative institutional design for cooperative wildlife management in the
Indigenous-owned savanna, J.C. Altman and M. Cochrane.
248/2003 Rethinking the design of indigenous organisations: The need for strategic
engagement, D.F. Martin.
249/2003 Practical reconciliation and recent trends in Indigenous education,
B.H. Hunter and R.G. Schwab.

CENTRE FOR ABORIGINAL ECONOMIC POLICY RESEARCH
WORKING PAPER SERIES
Available at no cost on WWW at http://www.anu.edu.au/caepr/working.php
3/1999 Dealing with alcohol in Alice Springs: An assessment of policy options and
recommendations for action, M. Brady and D.F. Martin.
4/1999 Aboriginal people in the Kakadu region: Social indicators for impact
assessment, J. Taylor.
5/1999 Reforming the Northern Territory Land Rights Act’s financial framework
into a more logical and more workable model, J.C. Altman and
D.P. Pollack.
6/2000 Governance and service delivery for remote Aboriginal communities in the
Northern Territory: Challenges and opportunities, N. Westbury and
W. Sanders.
7/2000 What’s in it for Koories? Barwon Darling Alliance Credit Union and the
delivery of financial and banking services in north-west New South Wales,
N. Westbury.
8/2000 The relative social and economic status of Indigenous people in Bourke,
Brewarrina and Walgett, K. Ross and J. Taylor.
9/2001 Indigenous communities and business: Three perspectives, 1998–2000,
J.C. Altman.
10/2001 Indigenous Australian arrest rates: Economic and social factors
underlying the incidence and number of arrests, B.H. Hunter.
11/2001 Sensitivity of Australian income distributions to choice of equivalence
scale: Exploring some parameters of Indigenous incomes, B.H. Hunter,
S. Kennedy, and D.E. Smith.
12/202 Indigenous Australians and competition and consumer issues: An interim
review of the literature and an annotated bibliography, J.C. Altman,
S. McDonnell, and S. Ward.
13/2002 The rise of the CDEP scheme and changing factors underlying Indigenous
employment, B.H. Hunter.
14/2002 Institutional factors underpinning Indigenous labour force participation:
The role of the CDEP scheme and education, B.H. Hunter.
15/2002 Generating finance for Indigenous development: Economic realities and
innovative options, J.C. Altman.
16/2002 The spatial context of Indigenous service delivery, J. Taylor.
17/2002 The potential use of tax incentives for Indigenous businesses on
Indigenous land, O. Stanley.
18/2002 Banking on Indigenous Communities: Issues, options, and Australian and
international best practice, S. McDonnell and N. Westbury.
19/2002 One size fits all?: The effect of equivalence scales on Indigenous and other
Australian poverty, B.H. Hunter, S. Kennedy and N. Biddle.