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Small island developing states (SIDS) face unique developmental challenges, not least their often narrow economic structure and dependence on a narrow range of economic activities. In this regard migration, remittances, dependence on aid, tourism and state employment feature prominently. This paper explores the nature of Niue's economy and the degree to which its economy depends on tourism and government services, both of which are supported through aid programmes. The limited dependence on remittances places Niue, as a SIDS, into the relatively narrow band of TOURAB states (those dependent on aid, tourism and bureaucracy). Understanding the nature of Niue's economy helps clarify the challenges the country faces, its development needs and the considerations which donors need to focus on through their support. It also clarifies how Niue should position itself relative to market opportunities and what the focus of development strategies should be. [ABSTRACT FROM AUTHOR]