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Macroeconomic Policies for Growth in Small Pacific Island Economies

This paper examines macroeconomic performance and policies in small Pacific island economies (SPIEs). These economies are highly prone to various supply shocks and face severe obstacles to development arising from their geography and demography. However, the paper contends that their lacklustre growth performance over the last two decades has also been due to excessively conservative macroeconomic policies. That is, a confluence of supply shocks and policy-induced constrained demand has resulted in poor economic performance. Given a very weak private sector, poor state of infrastructure and low-level human capital, the paper argues for the leading role of the government. It then elaborates on the elements of macroeconomic policies within a state-led development strategy.
Publisher:
UNU-WIDER
Series:
WIDER Research Paper
Volume:
2007/24
Title:
Macroeconomic Policies for Growth in Small Pacific Island Economies
Authors:
Anis Chowdhury and Yogi Vidyattama
Publication date:
May 2007
ISSN Web:
1810-2611
ISBN Web:
9291909637
ISBN 13 Web:
9789291909636
Copyright holder:
© UNU-WIDER
Copyright year:
2007
Keywords:
Pacific islands, macroeconomics, growth, aid, fiscal policy
JEL:
E63, E66, O23, O56
Project:
Fragility and Development
Sponsor:
UNU-WIDER gratefully acknowledges the financial contributions to the project by The Australian Agency for International Development (AusAID), the Finnish Ministry for Foreign Affairs, and the UK Department for International Development-DFID.
Format:
online
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