Rob Laking - State Performance and Capacity in the Pacific

Pacific Studies Series

Rob Laking

2010 Asian Development Bank
All rights reserved. Published in 2010.
Printed in the Philippines.

ISBN 978-92-9092-174-5
Publication Stock No. RPT101704

Cataloging-In-Publication Data.

Laking, Rob

State performance and capacity in the Pacific.
Mandaluyong City, Philippines: Asian Development Bank, 2010.

1. Public sector. 2. Governance. 3. Pacific. I. Asian Development Bank.

The views expressed in this publication are those of the author and do not necessarily reflect the views and policies of the Asian Development Bank (ADB), its Board of Governors, or the governments they represent.

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Contents

Foreword

In late 2009, the Asian Development Bank (ADB) launched a new Pacific Approach for its role in the development of its 14 Pacific developing member countries (DMCs). ADBs Pacific Approach places good governance at the heart of the development agenda and identifies public sector management as an important driver of change. This study, prepared as a background for the Pacific Approach, reviews recent literature and analysis on the states role in the development of Pacific DMCs, and suggests priorities for future support of improved state performance and capacity for ADB and its development partners.

ADBs strategy in the Pacific begins with the recognition of the regions enormous diversity, and the multiplicity of the challenges that its DMCs face in their economic and social development. Nevertheless, there are some important common themes, and lessons for development partners, about the role of the state. This study identifies key themes related to the basic capacities of the state: to secure public order and the rule of law, to plan and execute coherent strategies for improving the well-being of its citizens, and to be responsive to the needs and aspirations of its citizens. As a region where geography, history, and culture intersect in frequently unique ways, the Pacific is a fascinating and demanding area for study.

This paper was prepared by Rob Laking of the Institute of Policy Studies at Victoria University of Wellington under the supervision of Steve Pollard, principal economist, Pacific Department. Barry Lanier, Ma. Priscila del Rosario, Teri Temple, and Corazon Desuasido edited the publication. Ophie Iriberri provided editorial inputs and Cecil Caparas coordinated the publishing process.

Robert Wihtol
Director General
Pacific Department

Executive Summary

The Distinctive Nature of the Pacific

The Pacific developing member countries (DMCs) of the Asian Development Bank (ADB) encompass a remarkable variety of ethnic groups, colonial histories, and government systems. Their populations also vary enormously. Only two have land borders, and almost all are a considerable distance from developed country markets. Many of the people in the Pacific states live in small, isolated village settlements. For a large number of them, government is much less important in their lives than local customs and traditional governance. Small and scattered populations and physical distance has made economic development difficult despite sometimes huge maritime zones and, in some cases, a wealth of natural resources. A recent history of conflict and weak state governance contributes to the problems of development in some Pacific countries. These problems and other concerns in the region are among the geopolitical interests of the Peoples Republic of China, Japan, the United States (US), and particularly Australia and New Zealand, the two major developed countries in the region.

Country Performance

Recent growth in the region has been good, although it is forecast to slow in 2009 because of the global recession. Only Papua New Guinea (PNG) and Solomon Islands are classified as low-income countries. Most Pacific DMCs are classified as lower-middle-income countries, with the Fiji Islands and Palau in the upper-middle-income category. Recent growth has not been widely converted into further reduction of poverty. Movement in the region toward attainment of the Millennium Development Goals has been patchy. Most Pacific countries evidence relatively high per capita spending on health and education, but the outcomes of this spending are variable. Poorly targeted spending, a high proportion of budgets devoted to wages and salaries at the expense of other essentials, and subsidies of unprofitable public enterprises have contributed to budgetary problems.