How can students' competence be developed through peer assessment? This paper focuses on how relevant variables such as participation, evaluative judgement and the quality of the assessment interact and influence peer assessment. From an analysis of 4 years of data from undergraduate classes in project management, it develops a model of causal relationships validated using the PLS-SEM method. It demonstrates relationships between these variables and considerers the influence of students' competence and the mediating nature of feedback and self-regulation on the process. It points to how peer assessment practices can be improved whilst highlighting how evaluative judgement and feedback are two key elements that can be addressed to deliver the effective development of students' competence.