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...

The current consensus objective of development aid in the international community is to reduce poverty in general and to achieve the Millennium Development Goals (MDGs) in particular. In addition, the dominant view identifies economic growth as the principal means to this end. But the policy...

For the Central Asian countries the dissolution of the Soviet Union led to economic disintegration as old coordination mechanisms disappeared and new national borders appeared. This paper analyses why it has been difficult to coordinate aid for regional cooperation projects (e.g., on the Aral...

Over the past few years addressing state fragility in the third world has become an important priority in international development cooperation. However, it seems that the international donor community has so far not been able to develop adequate instruments for dealing with the problems posed...

The impact of aid inflows on relative prices and output is ambiguous. Aid inflows that increase domestic expenditure are likely to cause real exchange rate appreciation, ceteris paribus. However, if this expenditure raises the capital stock in the traded goods sector, then output in this sector...

While we know a lot about how countries become prosperous, we have only begun to understand how aid contributes to economic growth and poverty reduction. The development record is mixed and no robust association between the volume of aid and development performance has been discovered. The...

Growth, poverty reduction, and social peace are all undermined when public expenditure management and taxation are weak and when the fiscal deficit and public debt are not managed successfully. And large-scale aid and debt relief cannot work without a good fiscal system. The macroeconomic...