Issues in Monetary and Fiscal Policy in Small Developing States

A Case Study of the Pacific

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This study examines how monetary and fiscal policies are implemented in Pacific small states and the impact on growth and development in these countries. It carefully sets out both the policy and institutional constraints in monetary and fiscal policy management, provides case study examples of policy implementation in practice, and suggests policy options that can be used by these countries.



Fiscal Policy Frameworks in Pacific Island Countries

Historically, economic growth in the PICs has been relatively weak compared with other small island states, such as Mauritius. The economic growth rates for 1996–2005 are presented in table 2.1. Average growth rates over the last decade are below 5 per cent per annum; detailed socio-economic data are provided in appendix 2. In fact, economic growth rates in Fiji, Nauru, Vanuatu, the Solomon Islands and Tonga, have been less than 2.5 per cent per annum.


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