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Identifying Binding Constraints in Pacific Island Economies

by Ron Duncan and Hilarian Codippily with Emele Duituturaga and Raijieli Bulatale

East-West Center Working Papers, Pacific Islands Development Series, No. 18

Publisher: Honolulu: East-West Center
Publication Date: November 2014
Binding: paper
Pages: 199
Free Download: PDF

 

The emergence of a large number of small states over the past four decades or so (there are presently around 50 states with populations with less than 1.5 million) has led to considerable interest amongst researchers, member governments, and international agencies in their economic and environmental viability. The literature generated in the process has focused on the special problems and development challenges faced by such states, including their prospects for integration with the changing global environment. The study presented here builds upon this literature in examining the binding constraints to development. It is our hope that this study will benefit policy makers, researchers, and the donor community.

Four Pacific island countries were chosen for detailed study of the factors underlying their economic success, or lack of it: Fiji, Kiribati, Samoa, and Cook Islands. The choice of the four countries studied was based on two main criteria: economic performance and the geographical, ethnic, and migratory features that distinguish these countries. Fiji and Kiribati have both carried out economic reforms, but not of the comprehensive nature of those of Samoa and Cook Islands. It is of interest therefore to compare the results of the reforms undertaken across the four countries and try to understand the reasons for the different results. For comparative purposes, two small island countries were chosen from outside the Pacific region: Barbados and Maldives. Barbados has been seen as a model for developing countries by virtue of its traditional approach to development over a long period of time, achieving a relatively high level of per capita income and quality of life for its people. Maldives, by contrast, is a case where notable results have been achieved in growth and development in a relatively short period of time, based on a 'leading sector approach'.

The country visits for this research study were initiated in 2008 and completed in 2010. These country visits provided the opportunity for the two main authors and their associates to interact with policy makers, researchers, and civil society in these countries and carry out in-depth studies on the political economy of the country, covering the political systems, the legal systems, the institutional frameworks, their economic performance, and their governance structures, and the results achieved. The insights gained in the process are reflected in the country chapters and the concluding chapter.