The political economy of the South Pacific is dominated by foreign aid. This promotes domestic statism, which in turn retards the economic growth and development of the many countries in the region. As popular expectations of higher living standards are frustrated, the political tension and violence that some of the larger countries have experienced in recent years may intensify.
The authors of this collection see little prospect for any rapid reversal of the present aid-subsidies stagnation, but propose modest reforms that could help the region move away from aid dependence and bureaucratic control. They also identify some of the economic trends that indicate possible directions of future sustained development.
