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"In this paper, I present a political-economy critique of culturally based explanations for uneven development progress in Solomon Islands. I argue that the behaviours frequently blamed for slowing economic development and social progress are primarily driven by perverse material incentives prevailing under existing policy and institutional settings. While various cultural factors doubtlessly influence behaviour, the behaviours that commentators and development practitioners are most concerned about are entirely consistent with traditional economic models emphasising the tendency of individuals to act in their material self-interest. Understanding poor outcomes in Solomon Islands as the result of perverse material incentives facing individuals, rather than a result of the local culture, is more useful from a policy perspective and avoids the unjustified problematising of Solomon Islands culture. By applying this framework, I identify a range of practical policy priorities to ameliorate existing perverse material incentives and accelerate development progress. The paper focuses on the causes of three key development problems facing Solomon Islands: weak political and policy cohesion, poor public administration, and limited private sector development ." - page 1 ; AusAID

AbstractSound public financial management is a key concern of Pacific island country governments and their development partners. Public Expenditure and Financial Accountability assessments have become a ubiquitous tool for assessing public financial management performance in the region. This paper summarizes Pacific island country performance using global data and identifies a relationship between small population size and lower scores in Public Expenditure and Financial Accountability assessments. This relationship reflects capacity constraints to successful implementation of capacity‐intensive public financial management functions measured in such assessments. The analysis suggests that high scores may be an unrealistic and inappropriate goal for Pacific governments and development partners. Greater account should be taken of population‐related capacity constraints when designing and implementing public financial management reforms. Scarce capacity should be prioritized towards binding constraints to service delivery and macroeconomic management, rather than dispersed in attempts to improve assessment scores through adopting capacity‐intensive 'best‐practice' systems.

The papers in this series aim to provide a vehicle for publishing preliminary results on Macroeconomics and Fiscal Management (MFM) topics to encourage discussion and debate. This paper explores two new financing mechanisms that multilateral and bilateral development agencies could consider deploying to address problems of debt sustainability in small states. In this paper the authors provide an initial assessment of these proposals, informed by analysis of small state indebtedness and recent debt dynamics. Proposed financing instruments are predicated on assumptions that small states face high levels of indebtedness, and that reducing debt levels while increasing climate resilience could sustainably reduce such vulnerabilities. The authors find that levels of indebtedness vary widely across small states. Analysis of small state debt dynamics shows that small state debt accumulation has been driven by large primary and current account deficits and slow economic growth. Debt reduction from new mechanisms can only be expected to be sustainable, therefore, if countries simultaneously address the macroeconomic imbalances driving debt accumulation. The authors demonstrate that, while exposure to natural disasters is likely to have exacerbated economic management challenges in some small states, such exposures are unlikely to be the only important cause of indebtedness. The authors conclude that proposed new financing instruments can potentially help reduce small state debt burdens and gain fiscal space for climate adaptation but will not present a sustainable solution to problems of small state debt risks unless they involve macroeconomic and structural reforms to address the underlying imbalances driving rapid debt accumulation.