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Australia is the largest provider of foreign aid to the Pacific islands—a region that receives among the highest levels of aid per capita in the world. Since the turn of the century, Australia’s foreign aid program as a whole has undergone significant change. Volumes of official development assistance (ODA), which had stagnated for decades under both Labor and Coalition governments, increased significantly under the Howard government and the Rudd government. These increases came to a halt under the Gillard government, and were subsequently reversed by the Coalition cutting the aid program by almost one third. At the same time, the strategic focus of Australian aid shifted. The Coalition under Howard prioritised improved governance in recipient countries. The Rudd and Gillard governments (2007–13) focussed on poverty alleviation through spending on health and education. The Coalition has since prioritised aid for economic sectors—including aid for trade and innovation. In doing so, the Coalition has also highlighted the national interest objectives of Australian aid (Wood et al 2016).

Papua New Guinea’s (PNG’s) road system is in a parlous state after decades of neglect. More than half of the roads in the country require urgent rehabilitation. The PNG Government sought from 2003 to address the problem through the establishment of a Road Fund designed to earmark revenue for road management. Development partners supported these efforts, which were similar to reforms implemented in other parts of the world. This article examines the establishment of an independent road fund and road management agency in PNG. It finds that these reforms have not markedly improved road conditions, and that they have been undermined by a lack of support from political leaders and parts of the civil service. The article’s conclusion, that the establishment of a road fund is no panacea against political obstacles to road maintenance funding, is relevant to a broader literature concerning the establishment of independent institutions to address governance challenges.

Small island developing states face unique constraints to the provision of electricity services in rural areas, given their geographical features, and the small scale of government bureaucracies and markets. In small island developing states situated in the Pacific Ocean, these factors have resulted in some of the lowest electrification rates in the world. Seventy percent of Pacific islanders are without access to power; a figure that is equivalent to access rates in Sub-Saharan Africa, despite higher income levels in the Pacific. Past efforts by government and aid organizations to expand electricity access in rural areas have achieved negligible success, given regulatory frameworks that do not encourage grid extension, and the absence of effective institutional frameworks for operation and maintenance of decentralized systems. This paper argues that the binding constraint to rural electrification in Pacific small island developing states is the failure of regulatory frameworks to establish a viable business model for investment. Regulatory reform is needed that creates commercial incentives for private and public sector power utilities to provide power in rural areas, both through extension of electricity networks and decentralized power provision. Regulatory reform could also address past problems with the operation and maintenance of decentralized systems.

Small Island Developing States (SIDS) of the Pacific over the last decade have established some of the most ambitious renewable energy targets in the world. The promotion of renewable energy has been motivated by a desire to lessen dependence on fossil fuels, given the adverse economic impacts of high oil prices on these countries. Efforts to attract development assistance and to strengthen the position of Pacific SIDS in climate change negotiations have likely also played a role. This paper explores the development of renewable energy resources in the Pacific through a public policy lens. The ambitious renewable energy targets established by Pacific SIDS are argued to be appropriate in some cases, but in other cases are criticised on economic grounds. A potential trade-off is identified between the risk mitigation benefits and poverty alleviation benefits of different renewable technology investments, with questions raised about whether support for the former rather than the latter by development partners is appropriate. A number of institutional and financial challenges to the development of renewable energy resources in Pacific SIDS are also discussed.

Pacific Island countries face a range of development challenges, including smallness, distance from major markets and capacity constraints. Regional service delivery, or pooling, has been advocated as a means of addressing these challenges. This article presents the findings from the first comprehensive study of pooling initiatives in the Pacific. It draws on a review of the literature pertaining to 20 pooling initiatives identified in the region and on interviews with stakeholders involved in many of those initiatives. The study finds that experience with pooling among Pacific Island countries has not met the optimistic expectations of advocates, including development partners. This is the result of the challenges inherent in voluntary regionalism, which are exacerbated by the diversity of Pacific Island states and political economy constraints. The article concludes that an incremental approach to expansion of regional service provision in the Pacific is both likely and appropriate given these factors.

Chinese development assistance in the Pacific has attracted increasing attention since the 1st China-Pacific Island Countries Economic Development and Cooperation Forum in 2006, at which China announced US$492 million in concessional loans to the region. Another US$1 billion in concessional loans was announced at the 2nd China-Pacific Forum in 2013. This article explores how Pacific island governments negotiate and oversee the implementation of Chinese official development assistance in four Pacific Island case study countries where assistance has been significant: Tonga, Vanuatu, Samoa and the Cook Islands. We argue that the way in which governments have pursued, overseen and implemented projects has differed considerably, and is an important determinant of the effectiveness and developmental impact of Chinese assistance.

Solar photovoltaic technologies have for some time been promoted as a cost effective means of rural electrification in developing countries. However, institutional structures resulting in poor maintenance have adversely affected the sustainability of past solar projects. In Fiji, the Renewable Energy Service Company (RESCO) program is the latest attempt to promote solar-based rural electrification in a fee-for-service model, aiming to remove the high upfront capital costs associated with solar technologies and using a public-private sector partnership for maintenance. This paper assesses the program using survey and interview data. Major flaws are identified, relating to incorrect treatment of principal-agent problems, information asymmetries, motivational problems, and resourcing of government agencies. General lessons for fee-for-service solar home system models emerge, including that incentives for stakeholders must take centre stage in designing and administering such programs, and that active government support and ownership are required to make programs sustainable.