Historically project aid has favoured urban and infrastructure projects. Its benefits to rural dwellers (in most LDCs, the majority of the population) seem to have been minimal. In encouraging urbanisation, it has added to urban environmental and development problems in LDCs. Village-based rural projects have been neglected in dispensing aid, it seems for a variety of reasons some of which are identified here. Apart from the above bias, most project aid tends to be delivered on a top-down basis and donors often treat aid for development projects mechanically and simply as a means of delivering goods and services. ‘Organic’ factors such as local needs, culture, political considerations and the state of the natural environment are frequently not taken into account by donors. In the past, also little attention has been given to the sustainability of benefits from projects. Expert evaluation of large-scale development projects indicate high rate of 'failure' in relation to target rates of return and sustainability of returns. This may suggest that other types of projects such as rural small-scale projects are more desirable or that different techniques of project appraisal and selection should be adopted. For instance, techniques which take account of sustainability of returns or methods of selection that involve input from the village-level may be preferable. Selection techniques such as the use of cost-benefit analysis (CBA) are discussed and particular attention is given to the suggestions of Pearce, Markandya, Barbier (1989) of ways to extend CBA to take account of sustainability factors in project appraisal. This is followed by a general discussion of the role of project aid in promoting sustainable development in the Pacific. The role of the Australian Centre for International Agricultural Research (ACIAR) in promoting rural based development via research is noted. By way of a case study, particular attention is given to ACIAR's role in developing and promoting giant clam (Tridacnid) culture as a means of rural (coastal.) development.