Regional Service Delivery Among Pacific Island Countries

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Asia & the Paciﬁc Policy Studies, vol. ••, no. ••, pp. ••–•• doi: 10.1002/app5.45 Original Article

Regional Service Delivery among Paciﬁc Island Countries: An Assessment

Matthew Dornan and Tess Newton Cain*

Abstract 1. Introduction

Pacific Island countries face a range of devel- Regionalism has been promoted and used for opment challenges, including smallness, dis- decades as a means of addressing capacity tance from major markets and capacity constraints among Small Island Developing constraints. Regional service delivery, or States (SIDS) in the Pacific (or Pacific Island pooling, has been advocated as a means of countries).1 An important type of regionalism addressing these challenges. This article pres- involves countries pooling services that are ents the findings from the first comprehensive normally provided at the national or study of pooling initiatives in the Pacific. It subnational level. Pooling can occur in a range draws on a review of the literature pertaining of areas, including fisheries management, to 20 pooling initiatives identified in the region higher education, transportation, central and on interviews with stakeholders involved banking and procurement. It can be driven by in many of those initiatives. The study finds the private sector, or civil society, although the that experience with pooling among Pacific primary focus of this article is pooling among Island countries has not met the optimistic governments. The last 10 years has seen expectations of advocates, including develop- renewed interest in pooling among Pacific ment partners. This is the result of the chal- leaders and development partners. Of parti- lenges inherent in voluntary regionalism, cular importance was the Pacific Plan for which are exacerbated by the diversity of Regional Integration and Cooperation (the Pacific Island states and political economy Pacific Plan), which has promoted regional constraints. The article concludes that an service delivery (Pacific Islands Forum 2005). incremental approach to expansion of regional The Pacific Plan in 2005 proposed pooling in service provision in the Pacific is both likely four areas as a matter of priority: bulk procure- and appropriate given these factors. ment of fuel, aviation, shipping between Small Island States (SIS) and vocational education. It Key words: regionalism, Pacific Island coun- also identified five areas where there should be tries, Small Island Developing States (SIDS), further analysis of whether pooling would be political economy, club theory appropriate.2

1. The term SIDS, which is used around the world, should not be confused with the term Small Island States (SIS), an acronym used in the Paciﬁc to refer to a grouping of the * Development Policy Centre, Crawford School of smallest Paciﬁc Island countries. Public Policy, The Australian National University, 2. These included research into: bulk procurement of Canberra, Australian Capital Territory 2600, Aus- pharmaceuticals, a regional audit service, a regional sports tralia; email Ͻ[email protected]Ͼ. institute, regional ombudsman and human rights mecha-

© 2014 The Authors. Asia and the Paciﬁc Policy Studies published by Wiley Publishing Asia Pty Ltd and Crawford School of Public Policy at The Australian National University. This is an open access article under the terms of the Creative Commons Attribution-NonCommercial License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited and is not used for commercial purposes. 2 Asia & the Paciﬁc Policy Studies •• 2014

Since a 2005 Asian Development Bank • Has it delivered a service/good other than (ADB) and Commonwealth Secretariat study, capacity building? Toward a New Pacific Regionalism, commis- There is inevitably a high degree of subjec- sioned by the Pacific Islands Forum Secretariat tivity in assessing distinct initiatives that were in 2005, there has been no research published established with different objectives. Assess- on pooling activities in the region. There has ment is made difficult given the lack of com- also been no analysis of whether pooling ini- parable data and performance indicators (Herr tiatives thought promising in 2005 have actu- 2006). These difficulties are compounded by ally been attempted and, if so, how they have lack of clarity regarding what constitutes a performed. This is an area of considerable ‘pooled service’ (a point also raised by the importance, given the Independent Review of 2013 Independent Review of the Pacific Plan). the Pacific Plan in 2013, reviews of a number In this article, we emphasise the importance of of regional organisations (the Pacific Islands service delivery on a regional basis to replace Forum Secretariat and Secretariat of the national (or subnational) activity. This defini- Pacific Community, both in 2012), and efforts tion excludes regional initiatives designed to to pool resources in areas identified by the build capacity for service delivery at the Pacific Plan. The 2013 Independent Review of national level. A list of pooling initiatives is the Pacific Plan also highlighted the impor- provided in Table 1, and some examples of tance of such research, pointing to: capacity-building initiatives are provided in a need to analyse the critical success factors and Table 2. likely impediments to improved implementation and sustained service delivery. In short, there is a 2. Background need to work out why some initiatives have been very successful and why others have failed, and to use these lessons to improve implementation The challenges faced by Pacific Island coun- (Morauta et al. 2013a, p. 113).3 tries are well documented. Pacific Island countries are among the smallest populations in the This article presents the findings from a world, have narrow resource endowments, are study of pooling initiatives in the Pacific. It distant from major markets and are both vul- draws on a review of the literature pertaining nerable and susceptible to natural disasters to 20 pooling initiatives identified in the (Connell 2013). Remoteness and the inability Pacific and on interviews with stakeholders to take advantage of economies of scale place involved in many of those initiatives. The these countries at a distinct disadvantage in focus of the article is pooling initiatives, not global markets. This limits options for eco- the regional organisations that implement nomic growth, making many Pacific Island them (although in some cases, names are the economies heavily reliant for income on same). Regional organisations are nevertheless migration and associated remittances, and discussed, given their impact on the success of development assistance (Bertram & Watters pooling initiatives. Pooling initiatives are 1985; Gibson & Nero 2006; Winters 2005; assessed on multiple criteria, including: Winters & Martins 2004; World Bank 2011).4 • Was the pooling initiative ever implemented? Pacific Island countries suffer from capacity • Has the pooling initiative been sustained over constraints in many areas, ranging from public a period of time, or did it cease? financial management and government pro- • Has it remedied a deficit in service provision curement, to infrastructure maintenance at the national or subnational level? (Saitala et al. 2010; Haque et al. 2012; Dornan et al. 2013). Capacity constraints are the nisms, and a regional intellectual property rights product of various factors, including political organisation. 3. The Review references an earlier draft of this article 4. Papua New Guinea, although a Pacific Island country (which was provided to the review team) as the only exist- and a member of the Pacific Islands Forum, is an exception ing attempt at such an analysis. in many ways and is not the focus of this article.

© 2014 The Authors. Asia and the Paciﬁc Policy Studies published by Wiley Publishing Asia Pty Ltd and Crawford School of Public Policy at The Australian National University ulse yWlyPbihn saPyLdadCafr colo ulcPlc tTeAsrla ainlUniversity National Australian The at Policy Public of School Crawford and Ltd Pty Asia Publishing Wiley by published Table 1 List of Pooling Initiatives

Members National (Paciﬁc Success as capacity Signiﬁcant Island countries a pooled building an donor Annual budget Initiative Established and territories) Location Purpose service?† objective? funding? (AUD)

University of the 1968 12 Suva USP was established in order to provide Yes An objective Yes $82 million South Paciﬁc Campuses in 3 higher education to citizens of member (USP) countries and countries. centres/subcentres in

all member countries. 3 regionalism Pacific Cain: Newton and Dornan Air Pacific 1971 1 since 1990s Nadi Air Pacific was established in order to No Not an objective No $360 million 7inthe provide air services to member states. 1970s-80s The Fiji Government and Qantas have been the dominant shareholders since the 1990s, with other Pacific Island governments selling the majority of their shares. Pacific Forum 1977 1 since 2012. Auckland PFL was established to provide shipping No Not an objective Yes $32 million Line (PFL) 12 in the past services to PICs. A principal objective was guaranteeing shipping services to SIS PFL was bought by the Samoan Government in 2012.

04TeAuthors. The 2014 © Pacific Islands 1978 14 Suva Pacific Islands Trade and Invest provides Yes Not an objective Yes $3 million Trade and PT&I has offices in export facilitation and investment promotion Invest (PT&I) Beijing, Auckland, services. Trade Commissioners in each office Sydney, Tokyo report separately to the Pacific Islands Forum in Suva. Forum Fisheries 1979 15 + Australia, Honiara FFA provides member states with technical Yes Main objective Yes $18 million Agency (FFA) New Zealand assistance and services in fisheries (up from $13 management, and promotes fisheries million in 2009)

saadtePcfi oiyStudies Policy Pacific the and Asia development in the region. Secretariat of the 1980 9 + Australia, Suva SPBEA was established to assist members Yes Main objective Yes n/k Pacific Board New Zealand develop assessment procedures for high (within SPC budget) for Education school qualifications. Form 7 qualifications Assessment are administered by SPBEA. SPBEA became (SPBEA) part of SPC in 2010. Parties to Nauru 1982 8 Majuro The PNA is primarily a coordination Yes Not an objective No Ͻ$1 million Agreement PNA Office mechanism for placing limits on commercial (PNA) established fishing among members. The PNA 2010 Secretariat administers the vessel day scheme. ulse yWlyPbihn saPyLdadCafr colo ulcPlc tTeAsrla ainlUniversity National Australian The at Policy Public of School Crawford and Ltd Pty Asia Publishing Wiley by published 4 Table 1 Continued

South Paciﬁc 1983 14 + China Suva SPTO delivers marketing services and Yes An objective No $0.6 million Tourism technical assistance in tourism development Organisation for 14 Paciﬁc Island countries and territories. (SPTO) The organisation promotes the region to distant markets which members would be unable to reach on an individual basis. SPC Regional Date RMP 26 Suva The Regional Maritime Programme enhances Yes. An objective Yes $1.6 million

Maritime established is not cooperation through technical assistance and SPC-RMP is 2014 •• (within SPC budget) Studies Policy Paciﬁc the & Asia Programme known, but SPC training in the shipping sector, and delivers generally (RMP) has provided some pooled services such as external regarded as a assistance auditing of compliance with international success, but it is in this area since shipping regulations. primarily funded its establishment. by donors. UNICEF 1997 13 Suva Under the initiative, vaccines are ordered Mixed success. Not an objective No n/k Vaccines annually by UNICEF on behalf of Paciﬁc Payments from Initiative Governments and suppliers ship to a PICs are often

04TeAuthors. The 2014 © Regional Vaccine Cold Store facility in Fiji. late and delivery Vaccines are repackaged and distributed to can be delayed. the Pacific Island countries. Micronesian 1997 3 Pohnpei MSC is an inter-governmental agency for Debated. Not an objective No Ͻ$1 million Shipping the coordination and regulation of Some claim it is a Commission international shipping services in member success, but (MSC) countries. It was established to prevent evaluation is disruptive or cartel behaviour among difficult given the shipping operators. absence saadtePcfi oiyStudies Policy Pacific the and Asia of a counterfactual. Regional 2003 13 + Australia, Solomon Islands RAMSI was an Australian-led response to Yes. Main objective Yes $2,600 million over 10 Assistance New Zealand the deteriorating law and order situation in However, there years (2003–13)‡ Mission to Solomon Islands. It involved military, are ongoing Solomon policing and civilian components. The challenges to Islands military and policing components are service provision, (RAMSI) generally considered to have been more especially in rural successful than the civilian component. areas. ulse yWlyPbihn saPyLdadCafr colo ulcPlc tTeAsrla ainlUniversity National Australian The at Policy Public of School Crawford and Ltd Pty Asia Publishing Wiley by published

Paciﬁc Aviation 2003 8 Port Vila PASO aims to improve safety and security No An objective Yes n/k Safety Ofﬁce standards within the aviation sector of the PASO is designed to be self-

(PASO) Pacific Islands participating countries. PASO sustaining, but received 5 funding regionalism Pacific Cain: Newton and Dornan has faced financial problems given low when established. demand for its services, and is now being reformed. Bulk procurement Studied 14 Suva Bulk procurement of essential medicine has No An objective Yes Ͻ$0.5 million of essential 2007–2009 long been considered among PICs as a (not medicines means of reducing costs, and harmonising implemented) standards. However, health ministers in 2009 rejected a WHO proposal for bulk procurement on the basis that consultations had been inadequate. Office of the 2008 13 Port Vila The OCTA provides independent advice and Yes. An objective Yes $1.4 million Chief Trade support to the members in the negotiations However, funding 04TeAuthors. The 2014 © Advisor of the Pacific Agreement on Closer arrangements (OCTA) Economic Relations Plus agreement with with donors have Australia and New Zealand. adversely affected OCTA operations Pacific Regional 2008 18 + Australia, Auckland The Pacific Association of Supreme Audit Yes. Main objective Yes $1.8 million Audit Initiative New Zealand Institutions has implemented the PRAI, Mixed success (PASAI budget) (PRAI) which is aimed at building the capacity of with a national audit institutions, and providing subregional audit saadtePcfi oiyStudies Policy Pacific the and Asia regional audit services. Cooperative audits initiative have been undertaken across countries in a number of sectors. Pacific petroleum Studied 5 Suva The Pacific petroleum project implemented No An objective Yes Ͻ$0.5 million project 2008–2012 by the Forum Secretariat and SPC explored (not arrangements for bulk fuel procurement. implemented) However, only five states subsequently signed a MOU to advance the project, which ceased in 2012. ulse yWlyPbihn saPyLdadCafr colo ulcPlc tTeAsrla ainlUniversity National Australian The at Policy Public of School Crawford and Ltd Pty Asia Publishing Wiley by published 6

Small Island Studied from 5 Suva As part of the initiative, SPC and Forum No Not an objective Yes Ͻ$0.5 million States (SIS) 2010 Secretariat are studying the scope for a (partially Shipping centralised regulatory commission, like the implemented to 2014 •• Studies Policy Pacific the & Asia Initiative MSC, for other countries in the region. The date) initiative has established an agreement that ensured regular short-term shipping services using Kiribati Shipping Services Limited vessels to Fiji, Kiribati, Nauru, Tuvalu, Wallis and Futuna Pacific 2013 5 The World Bank-funded pilot aims to reduce Not yet evaluated Not an objective Yes $1.5 million Catastrophe the financial vulnerability of members to 04TeAuthors. The 2014 © Risk Insurance natural disasters through insurance coverage Pilot against earthquakes and tropical cyclones. Fiji bulk 3 Suva Tuvalu and Kiribati use the procurement Yes Not an objective Yes Ͻ$0.5 million procurement of facilities of the Fiji Pharmaceutical Services pharmaceuticals to purchase pharmaceuticals. The warehouse that is used was provided by JICA.

This table lists all 20 pooling initiatives that were identified in the region as part of this study. There are likely to be others, although the absence of a firm definition for pooling makes the creation of a list somewhat subjective.

saadtePcfi oiyStudies Policy Pacific the and Asia Two initiatives excluded from this table are the Pacific Islands Private Sector Organisation (PIPSO) and the Pacific Islands Association of Non-Government Organisations (PIANGO). These are examples of pooling among the private sectors and civil societies. Both were excluded from this study on the grounds that they do not involve pooling between Pacific Island governments. †The success of an initiative in the table is based on its successful provision of a pooled service, not success in other areas (such as capacity building). The judgment is a subjective one based on an extensive review of publicly available and accessible annual reports, evaluation documents, and on interviews of regional bodies. ‡Based on analysis by Hayward-Jones (2014). JICA, Japan International Cooperation Agency; MOU, memorandum of understanding; n/k, not known; PIC, Pacific island country; RMP, Regional Maritime Programme; SPC-RMP, Secretariat of the Pacific Community Regional Maritime Programme; UNICEF, United Nations Children’s Fund. Dornan and Newton Cain: Pacific regionalism 7

Table 2 List of Some Initiatives That Facilitate Coordination or Pool National Capacity-building Efforts

Initiative Established Purpose Fisheries, Aquaculture, and 1954 An initiative of SPC, FAME assists PICs to manage their fisheries Marine Ecosystems through the provision of scientific information and various (FAME) capacity-building efforts. Its activities are primarily donor funded. Pacific Power Association 1992 PPA facilitates cooperation between Pacific Island power utilities. (PPA) It provides training and enables the exchange of information and expertise. Donors fund much of the PPA’s work. Pacific Financial Technical 1993 PFTAC is one of the International Monetary Fund’s eight regional Assistance Centre technical assistance centres. It provides technical assistance (PFTAC) in public financial management, revenue policy and administration, economic statistics, financial sector supervision and macroeconomics. The Pacific Water and 1995 PWWA facilitates cooperation between Pacific Island water and Wastes Association waste utilities. It provides training and enables the exchange of (PWWA) information and expertise. Donors fund much of the PWWA’s work. Oceania Customs 1998 OCO provides technical assistance and implements trade Organisation (OCO) facilitation and customs cooperation projects. It also serves as the secretariat for annual meetings of heads of customs organisations. It is primarily donor funded. Australia-Pacific Technical 2007 The APTC is an Australian-funded initiative that provides College (APTC) vocational training services in PICs. Pacific Regional Information 2003 An initiative of SPC, PRISM assists PICs to provide statistical System (PRISM) information. Pacific Ombudsman Alliance 2008 An initiative driven by the Australian Commonwealth (POA) Ombudsman, which led to greater coordination among Pacific ombudsmen and to a number of capacity-building initiatives. Strengthening Specialised 2011 An Australian-funded project based at the Fiji School of Medicine Clinical Services in the is aimed at strengthening coordination and management of Pacific specialised medical care. Pacific Horticulture and 2011 PHAMA is an Australian-funded initiative designed to assist PICs Agricultural Market manage the regulatory aspects associated with exporting Access Program primary products. (PHAMA) Pacific ICT Regulatory 2011 PIRRC is a World Bank initiative that provides technical Resource Center (PIRRC) assistance and collects and provides information about the ICT sector in the Pacific. It is primarily donor funded.

These initiatives were considered along with other pooled services identified in Table 1. The decision to exclude them from Table 1 was made on the grounds that the initiatives primarily represent: (i) cooperative arrangements designed to share information between national authorities and/or (ii) pooling of capacity-building efforts, where one or more donors provide technical assistance to many countries through the one organisation/initiative. PIC, Pacific island country; AusAID, Australian Agency for International Development. economy, education levels, the very recent Regional solutions to these challenges have independence of most Pacific Island states and been advocated since the colonial era (Chand (in some cases) corruption (Duncan & Hassall 2005; Herr 2013). The term ‘pooled regional 2011). The high fixed cost of many public governance’ is more recent, first being used by goods is a barrier to their provision in small the Australian Prime Minister John Howard in countries. Pacific Island governments are often 2003, when announcing Operation Helpem unable to perform the same functions as those Fren, the Regional Assistance Mission to in larger countries (Laking 2011). For Solomon Islands. Howard’s argument, accord- example, it is unrealistic to expect the Nauru ing to Fry (2005), was that ‘Pacific states health service to employ a brain surgeon to needed to share resources if they were to over- cater for a country of 10,000 people. come the constraints imposed by their small

© 2014 The Authors. Asia and the Pacific Policy Studies published by Wiley Publishing Asia Pty Ltd and Crawford School of Public Policy at The Australian National University 8 Asia & the Pacific Policy Studies •• 2014 size and lack of capacity...referring to the market integration and pooling of resources absurdity of each island country trying to run among Pacific Island countries.5 The Pacific its own airline or train its police when these Plan remains in force today, although it has could be done through pooling resources’. recently been the subject of an independent Pacific leaders subsequently issued the 2004 review. The Pacific Plan differentiates between Auckland Declaration, which stated that ‘the three types of regionalism: (i) cooperation, serious challenges facing countries of the involving dialogue and coordination of poli- region warranted serious and careful examina- cies; (ii) integration through lowering barriers tion of the pooling of scarce resources to to trade and migration between countries and strengthen national capabilities’ (Pacific (iii) pooling of regional service delivery Islands Forum 2004). This was a reiteration of among countries. a long-standing agenda for regionalism. Cooperation has historically been the pre- Although the term ‘pooling’ was new, what it ferred method of regionalism adopted in the referred to was not. Pacific Island states had Pacific. This has led some commentators to been pooling governance and service provision describe the Pacific’s ‘network of cooperative for decades in various forms. institutions’ as ‘unmatched elsewhere in devel- A common approach for pooling has oping economies in terms of effectiveness’ involved the use of services provided by a (Rolfe 2000, cited in Fry 2005). There are metropolitan power. Pacific Island territories many examples of cooperation in the Pacific, benefit from the use of metropolitan legal both formal and informal, that are deemed suc- systems, audit and accounting rules, and pro- cessful. Larmour (2005) documents the impor- curement arrangements. Renewed efforts to tance of informal networks of USP graduates expand regionalism have focused instead on in transferring ideas about land registration pooling among Pacific Island countries and between the various Pacific Island countries. territories; also the focus of this study. More recently, the Pacific Power Association Regional organisations play a key role in this has transferred ideas about regulatory arrange- form of regionalism. Some regional ments between electricity utilities in the region organisations are established with a narrow (Dornan 2014). purpose, such as the University of the South But enthusiasm for regional cooperation is Pacific (USP). Other organisations work not shared by all. Toward a New Pacific across a broader range of areas. The Secre- Regionalism (Asian Development Bank and tariat of the Pacific Community (established Commonwealth Secretariat 2005) criticised as the South Pacific Commission in 1947), the historical focus on cooperation in the for example, provides technical assistance in region and instead promoted integration and natural resource management (agriculture, pooling on the basis that only these ‘deeper’ fisheries and forestry), health, statistics, forms of regionalism would generate the pool human development, transport, information of benefits needed to make regional institu- and communication technology, social issues tions sustainable and beneficial to members. and human rights. The Pacific Islands Forum The Pacific Plan has also supported deeper Secretariat (established in 1972 as the South forms of regionalism, noting that: Pacific Bureau for Economic Cooperation), The path almost any regional initiative takes which exists to support the Pacific Islands usually begins with regional cooperation. Forum, also provides assistance in areas Whether the best approach may then be a move such as transport, trade and economic towards regional integration, or regional provi- governance. sion of services, or both—depends on an assess- Efforts to strengthen Pacific regionalism led ment of obstacles to development and to the creation of the Pacific Plan in 2005. The plan was underpinned by analytical support 5. Not without controversy: a number of academics and from the 2005 ADB and Commonwealth Sec- civil society groups have criticised what they describe as retariat study, which argued for enhanced the Pacific Plan’s neoliberal focus (Slatter 2006).

consideration of benefits and costs (Pacific 3.1 Political Economy and Club Theory Islands Forum 2005). Such support for pooling is likely to con- Political factors are another barrier to regional tinue. The Review of the Pacific Plan ‘remains service provision. The literature on club theory convinced that it is worth continuing to pursue suggests that it is difficult to negotiate and shared service delivery across the Pacific’ design durable ‘clubs’ for pooled service deliv- (Morauta et al. 2013b, p. 113). ery where participation is voluntary. The design, implementation and maintenance of pooling initiatives among independent nation 3. Regional Service Delivery in the Pacific states must all be negotiated (unlike, generally, the case for subnational authorities that form When the Pacific Plan was drafted, pooling part of a federation, such as in Australia). Each had been attempted in a range of areas, includ- member needs positive net benefits to join and ing higher education (USP, est. 1968), fisheries remain in a ‘club’, and at any time, one or management (Forum Fisheries Agency (FFA), more members of the club may determine that 1979 and Parties to the Nauru Agreement the benefits of membership are marginal or (PNA), 1982), aviation (Air Pacific, 1971), negative and decide to withdraw (Asian shipping (Pacific Forum Line (PFL), 1977), Development Bank and Commonwealth trade promotion (Pacific Islands Trade and Secretariat 2005). Invest (PT&I), 1978) and tourism (South For a country to join a ‘club’, benefits must Pacific Tourism Organisation (SPTO), 1983). be high enough to offset the short-term adjust- Since then, Pacific Island countries have ment costs associated with pooling of services. attempted pooling in at least nine additional These include the cost of harmonising policy areas, most of which were highlighted as pri- settings, such as laws and regulations, which is orities in the Pacific Plan.6 Have these pooling often a pre-condition for pooled service deliv- initiatives achieved their objectives? ery. The loss of ‘sovereignty benefits’ is A key rationale for pooling in the Pacific has another cost that must be offset. Sovereignty been the constraints inherent to government benefits include funding from development service provision and economic development partners for national service delivery, and in the region. These same characteristics make associated employment and local procure- pooling of service provision a challenge. The ment (Asian Development Bank and remoteness and diversity of Pacific Island Commonwealth Secretariat 2005). These sov- countries increase the cost of regional service ereignty benefits are significant in Pacific delivery, making it difficult to achieve net ben- Island countries (Bertram & Watters 1985; efits from pooling owing to high travel and World Bank 2011). communication costs and the need to tailor Political leaders are mindful of domestic solutions for different contexts. The limited constituencies in their support for, or opposi- capacity of national and local governments to tion to, pooling initiatives. There are political support regional service provision further ramifications where a government fails to increases costs.7 secure its ‘fair share’ of benefits from such arrangements. Individual ministers and senior 6. The plan established numerous tests to ascertain public servants in turn are often unwilling to whether pooling was justified. The market test questioned whether the market was or could effectively provide the cede power or allocate resources from limited service. The subsidiarity test questioned whether a budgets to regional organisations. Such con- national or local government was or could effectively cerns are demonstrated by competition provide the service. A third test, named the sovereignty test, was designed to ensure that regional initiatives main- tained the degree of effective sovereignty held by national governments. establishing a ‘technical backstop’ for support. This can 7. As discussed below, successful cases of pooling have take the form of a regional organisation, such as SPC, tended to address capacity constraints among member by although other models have also proven effective.

© 2014 The Authors. Asia and the Pacific Policy Studies published by Wiley Publishing Asia Pty Ltd and Crawford School of Public Policy at The Australian National University 10 Asia & the Pacific Policy Studies •• 2014 between states to host regional organisations, regional airline experiment (Guthrie 2013; which bring with them benefits such as Asian Development Bank 2007a; Vitusagavulu employment opportunities and local procure- 2005).9 ment of goods and services (Chand 2010). Fiji There are many parallels between the has benefitted significantly from hosting a history of Air Pacific and that of PFL. PFL was large number of regional organisations, includ- established in 1978 to provide Pacific Island ing some of the biggest, such as USP.8 countries with shipping services, which were Equity is therefore an important consider- considered to be at risk at the time due to ation. Historically, a number of pooling initia- increasing containerisation. PFL in its early tives in the Pacific have failed as a result of years suffered from conflicts of interest perceived inequity. This is one reason why between government board members, which pooling initiatives with a commercial focus demanded that PFL service non-commercial have generally not fared well. The history of routes, but were reluctant to provide necessary Air Pacific in the 1970s–1980s demonstrates funding. The result was a series of severe the difficulties faced by a regional entity in financial losses. PFL survived with funding serving seven Pacific Island government share- from New Zealand and by later adopting an holders. Concerns that Air Pacific was dispro- innovative management strategy, whereby PFL portionately benefitting Fiji made other reduced its capital base by chartering ships government shareholders reluctant to provide from member states. Important also was the the airline with additional capital. Solomon abolition of services to non-commercial Islands was especially critical when Air Pacific routes, which benefitted PFL financially, but cut services to Honiara in 1974, as part of an adversely affected some member countries and effort to restore profitability. The Government consequently reduced political support for of Solomon Islands argued that Air Pacific’s PFL (Asian Development Bank 2007b; decision had been made without its input and Vitusagavulu 2005). PFL was sold by its share- had effectively left the country isolated from holders to the Government of Samoa in 2012 the rest of the Pacific Islands region. At the following renewed financial troubles (Guthrie same time, Nauru and Western Samoa 2013). expressed their intention to continue to operate Political economy is clearly important in their own national airlines, Air Nauru and these cases. One of the challenges to success- Polynesian Airlines, despite the establishment ful pooling is that the resulting benefits are of Air Pacific as a regional carrier. Tonga also generally attributed to regional agencies, not announced that it would establish a national national governments. This partially explains carrier to provide it with direct services to the the establishment of national airlines over the region, without the need to travel through Fiji last few decades, which has played to nation- (although establishment of this airline was alist sentiment. Conversely, there has often delayed until 1985) (Guthrie 2013). been limited enthusiasm for regionalism These developments resulted in a saturated among government officials, a point demon- market with adverse consequences for all strated by the fact that some countries are in involved. Air Pacific was able to survive and arrears in their membership contributions to later prosper with good management and a regional agencies, often resisting payment of commercial focus; but the airline in the 1980s trivial amounts ($1,000 in the case of the effectively became a joint venture between the Pacific ICT Regulatory Resource Center).10 Fiji Government and Qantas, ending the

9. Air Paciﬁc in 2013 changed its name to Fiji Airways, the title it had used before becoming a regional airline. 8. USP has campuses in Samoa and Vanuatu and centres 10. This point can also be understood in terms of public and subcentres in each of its 12 owning countries. choice theory, given that public servants funded through However, no other country beneﬁts from the presence of aid are more likely to ‘lose’ from the movement of service USP to the extent that Fiji does. provision to regional organisations (Mueller 1979, 1989).

Conflict between stakeholders has also hin- 2005). Gaining legitimacy is a slow and incre- dered attempts since 2005 to establish a system mental process. Institutions accumulate legiti- for bulk procurement of fuel among Pacific macy by solving collective action problems Island countries. Bulk procurement of fuel has (such as through service provision), and in been under consideration from the earliest turn, that legitimacy assists institutions to days of regionalism, with analytical work address collective action problems. This virtu- undertaken before the establishment of the ous cycle takes time to develop and is not Pacific Islands Forum Secretariat. The ratio- pre-determined. nale for bulk procurement is that Pacific Island Regional organisations in the Pacific have countries, as small export markets with high been criticised on numerous grounds. Herr transport costs, could lower the price of fuel if (2006, 2013) details how the colonial origins it were purchased in bulk.11 Leaders gave bulk of regional organisations have hindered their procurement of fuel priority under the Pacific development, although he remains sympa- Plan; however, only five SIS subsequently thetic toward the efforts of island states to signed a memorandum of understanding to maintain regional identity based on colonial advance the project. The lack of commitment heritage. A number of regional organisations was partly due to the lack of benefits of bulk have become increasingly viewed as domi- fuel procurement for larger countries. Con- nated by metropolitan powers, especially Aus- flicts of interest between signatories also tralia and New Zealand.13 Regional delayed further action, with several countries organisations have also been criticised for pur- seeking to attract donor funding to become a suing self-interest. Hughes (2005) argued that regional ‘hub’ for fuel storage. The project, ‘management capture’ has resulted in Pacific which had not proceeded beyond feasibility regional organisations pursuing their own study stage, ceased in 2011 when donor objectives and not those of member states. funding expired. It was clear that signatories ‘Management capture’ can be understood in were unwilling to incur costs associated with terms of a principal–agent problem, where harmonising legislation, fuel standards or pro- principals (in theory, member countries but, in curement rules, given that benefits from the practice, also donors) cannot be certain when project were uncertain.12 delegating a task to an agent (a regional organisation) that the agent shares their objec- 3.2 Regional Institutions, State Building and tives and will perform the task (Ostrom et al. Legitimacy 2001). Beattie (2013) argues that international and regional organisations are especially sus- Institutions that deliver services do not just ceptible to principal–agent problems. Barder appear; they are built over time and can func- (2009) points out that the focus on public tion effectively only when supported by stake- administration makes it difficult to measure holders. There is a considerable literature on performance (which cannot simply be assessed how states, to govern effectively, must be con- by financial returns). Regional organisations sidered legitimate by citizens (Weingast 1997; also have multiple principals and those are the North et al. 2012). States and institutions ‘earn states that form their membership, which have legitimacy if they solve collective action prob- competing priorities. The power of member lems indigenous to the community’ (Powell countries over regional organisations is weak- 11. Similar arguments can and have been used to advocate ened as a result (these relationships are illus- for bulk procurement in others areas, ranging from phar- trated in Figure 1) (Beattie 2013). maceuticals (discussed later) to canned fish (which was promoted in the early days of the Pacific Islands Forum on food security grounds). 13. This argument has been used very effectively for 12. SPC is continuing to promote bulk fuel procurement political purposes in recent years, although the academic with limited resources. Commitment from larger Pacific literature remains divided about whether the trend away Island states will be needed for bulk fuel procurement to from organisations such as the Pacific Islands Forum will proceed. be permanent (see Tarte (2014) for a discussion).

© 2014 The Authors. Asia and the Paciﬁc Policy Studies published by Wiley Publishing Asia Pty Ltd and Crawford School of Public Policy at The Australian National University 12 Asia & the Paciﬁc Policy Studies •• 2014

Figure 1 Principal–Agent Issues in Paciﬁc Regional Organisations

Principals

Country 3 member contributions Country 1 Country 2 Including Metropolitan

InformaƟon asymmetries Donor funding (% of total income) Regional

member contributions

Donor 1 organisaƟon 1 Excluding Metropolitan

Regional udget, June 2011; SPREP Work Programme and Budget, 2011. Donor 2 organisa Ɵon 2

Principals Agents (% total income) Self-generated income

The situation in the Paciﬁc is complicated further by the fact that some member countries are also donors (such as Australia and New Zealand in the case of the Forum Secretariat) and because the bulk of funding for regional- 9,455,738 5.5 85.1

ism comes from development partners and not Donor contributions from Paciﬁc Island states (see Table 3). Donor (excluding membership fees) funding affects the incentives of regional organisations in a number of ways. Regional organisations are under less pressure to meet

the expectations of member countries as a members result of development assistance, given that Metropolitan they are not reliant on members for funding. Pacific Island governments are also less likely Membership fees to monitor the performance of regional (of which 111,000 is outstanding) contributions organisations, which they consider a ‘free’ Pacific Island service.14 Reliance on donor funding for pooling initiatives can therefore undermine the legitimacy of regional organisations. But it can also be a product; governments are reluctant to Table 3 Financing of Council of Regional Organisations of the Pacific (CROP) (Latest Available Years) 11,109,313 1,041,376 82,414,113 28,126,354 na 17,312,663 44.9 21 na 13,364,311 521,663 1,043,326 6,900,864 36.7 51.6 59.4 88,958,361 1,737,519 8,534,221 71,856,336 7.7 80.8 90.4 15,827,012 531,489 1,757,783 12,408,505 5.1 78.4 89.5 Total annual fund initiatives or organisations that they do income (AUD) not consider legitimate. The concept of legitimacy is also relevant to Pacific Island states. Many Pacific Island governments, especially in Melanesia, do not provide services or solve collective action problems that would be expected of a nation

14. This argument has parallels with literature linking taxation with government accountability (Tilly 1990; Environment Programme (SPREP) (2011) (USP) (2011) (2009) Community (SPC) (2011) (PIFS) (2012) Secretariat of the Pacific Regional University of the South Pacific Data collected by PIFS from: PIFS Budget Review, 2012; FFA Annual Report, 2011; SPC Budget, Financial Year Ending December 2011; USP, Indicative Aid B Agency Forum Fisheries Agency (FFA) Secretariat for the Pacific North et al. 2009). Pacific Islands Forum Secretariat

© 2014 The Authors. Asia and the Pacific Policy Studies published by Wiley Publishing Asia Pty Ltd and Crawford School of Public Policy at The Australian National University Dornan and Newton Cain: Pacific regionalism 13 state. These recently independent nations are Regional approaches have also been used in still in the process of building modern states the provision of expert advice. The Office of that govern and provide services to their citi- the Chief Trade Adviser (OCTA), an indepen- zens. The functional legitimacy of Pacific dent body accountable to 13 Forum Island Island governments, or the extent to which Countries, provides advice in the negotiations they are able to provide services or solve col- for a Pacific Agreement on Closer Economic lective action problems that would be expected Relations Plus with Australia and New of a national government, has implications for Zealand. There are resource savings from the regional service delivery. Powell (2005) argues OCTA conducting analysis, providing advice that: and coordinating joint positions in trade nego- tiation meetings for Pacific Island countries. A Pacific economic and political community as However, reliance on funding from develop- envisioned by Australia and other regionalists will achieve integration in form but not in sub- ment partners has hampered the work of the stance...Without stronger states, regional gov- organisation. ernance in the Pacific enjoys no firm foundation In the case of the Pacific Regional Audit to ensure its sustainability and further Initiative (PRAI), a series of regional perfor- development. mance audits focusing on key sectors across Pacific Island countries have provided high- quality audit information to governments, 3.3 Successful Cases of Regional Service beyond what could have been produced by Delivery national audit offices. Regional audits have the added advantage of avoiding conflicts of inter- There are a number of examples of regional est that make auditing especially difficult in service delivery that are considered a success. very small states. Subregional audits have USP is one such case. The university has a proven less successful and have been driven by membership of 12 Pacific Island countries and development partners. was established on the basis that Pacific Island A number of pooling initiatives have states were too small to support national uni- achieved success in niche areas. PT&I, for versities, while tertiary education in metropoli- example, is responsible for export facilitation tan countries did not cater to the needs of and investment promotion for 14 Pacific students from Pacific Island countries (Chand Island country members. Offices in Australia, 15 2010). China, Japan and New Zealand support staff Fisheries management is another example from member governments that are respon- of where pooling, despite its challenges, has sible for promotion of trade and investment in achieved considerable success. The delivery their country. Promotion of individual coun- by the FFA and PNA of services such as vessel tries is the responsibility of national staff, registration and monitoring, data collection minimising conflicts of interests between and analysis, and negotiations advice has been PT&I members. more cost-effective and efficient at the regional The SPTO is another example. The SPTO level than would have been the case had indi- delivers marketing services and technical vidual states sought to provide those services. assistance in tourism development for 14 Scientific research by Secretariat of the Pacific Pacific Island countries and territories. The Community (SPC) has supported the activities organisation promotes the region to distant of FFA and PNA. The success of regional fish- markets, which members would be unable to eries management is a result of the trans- reach on an individual basis. boundary nature of many fisheries in the Pooling in the Pacific has therefore been a Pacific, including migratory tuna; the manage- success in some cases, although it would be ment of which requires a regional approach. fair to say that experience is mixed and that 15. Although, some larger member states have since pooling has not met the optimistic expecta- established national universities. tions for regionalism articulated in the Pacific

© 2014 The Authors. Asia and the Paciﬁc Policy Studies published by Wiley Publishing Asia Pty Ltd and Crawford School of Public Policy at The Australian National University 14 Asia & the Paciﬁc Policy Studies •• 2014

Plan. What differentiates successful and entities performed. For example, after a diffi- unsuccessful pooling initiatives? cult period, USP has stabilised under its current leadership, which is supported by 4. Discussion member countries and development partners. Continuity of leadership has also been impor- This study examined initiatives in which tant in this case. In contrast, organisations such pooling of services between Pacific Island as the Pacific Aviation Safety Office (PASO) states was identified as a component. Of the 20 and PFL have struggled when management initiatives where pooling of services was a lost the support of stakeholders. primary objective, 11 could be considered to An important aspect of good management is have achieved some success, although levels of effective consultation. Successful initiatives success varied and no initiative was without have involved consultation with member coun- its problems. Seven initiatives were found pri- tries and, where relevant, development part- marily to be failures, and two could not be ners. Some pooling initiatives have failed as a evaluated. result of poor consultation. For instance, a Pooling initiatives have been more likely to World Health Organisation proposal to estab- succeed where they fill a clear gap in service lish a system for the bulk procurement of phar- delivery. This usually involves the provision of maceuticals in the Pacific was rejected in 2009 a public good or a private good with significant by Health Ministers, who cited insufficient positive externalities, or management of a information and lack of consultation with common pooled resource. Successful initia- governments. tives avoid service delivery in areas where Adequate technical knowledge and support national governments or the private sector is has also been important, especially where already operating effectively. The cases of the member states are small and have limited SPTO and PT&I demonstrate this point. Both technical or administrative capacity. Large organisations focus their activities in niche organisations such as SPC can provide a tech- areas where national governments are absent. nical backstop and broader institutional The SPTO, for example, markets the South support in the delivery of pooled services, Pacific to distant markets like Europe and such as the SPC Regional Maritime Pro- Canada, rather than Australia and New gramme. The Fiji Government provides a Zealand where tourism agencies from Pacific similar backstop when purchasing pharmaceu- Island governments are already active. tical products on behalf of Tuvalu. A number Avoiding or resolving conflicts of interest of smaller organisations established to pool between member states is also important. The service delivery have not had this support and approach of SPTO and PT&I, which offer ser- have suffered as a result. The PASO is one vices to Pacific Island countries without such example. engaging in the promotion of individual coun- Successful pooling initiatives have com- tries, enables the organisations to sidestep con- monly made use of technological innovation to flicts of interest between member countries. develop new services, make existing ones avail- This has proven difficult for many other initia- able to more people, or improve delivery effi- tives, especially where commercial interests ciency. The management of fisheries by PNA/ were involved. Conflicts of interest were the FFA has been enhanced with the advent of main reason that Air Pacific and PFL ceased global positioning system technology and USP to function as regional entities. Both has a dedicated platform (Moodle Pty Ltd, organisations chose to prioritise commercial Perth, Australia) for the online delivery of routes at the expense of unprofitable services course components. As connectivity and tech- to smaller member countries, thereby under- nology penetration in the region increases, we mining support from stakeholders. should expect to see greater use of information The issue of leadership and management and communication technologies for pooled has loomed large as a factor in how pooled service delivery.

Our analysis reveals that a patchwork of demand is greatest and resistance is least. If a pooled service provision has emerged in the particular initiative is not working, that service Pacific. Initiatives in the Pacific exhibit high can be restructured or even discontinued; levels of diversity, with almost no two pooled countries are not locked into a service provider services looking the same. ‘Clubs’ that pool and can turn to alternatives where existing services have different membership bases. In arrangements are not adequate. This enables fisheries management, the FFA has 17 Pacific Island states to avoid the famous ‘cartel members while the PNA has 8. The Microne- of good intentions’ and ensures that pooled sian Shipping Commission has 3 members, service provision proceeds where the benefits USP has 12 members and the SPTO has 15 outweigh the costs for all participating coun- government members (which include several tries (Easterly 2002). non-independent territories and China). The The benefits of such an approach are evident situation is consistent with the recommenda- in the Pacific at the subregional level, at least tions of Toward a New Pacific Regionalism in a broader sense, where in the last decade (Asian Development Bank and there has been strong political and financial Commonwealth Secretariat 2005), which support for subregionalism, especially in envisaged ‘varied approaches and subregional Melanesia. It is evident for regional service groupings’. delivery in tuna fisheries management, where The highly variable approach to pooled some countries have pursued agreement on service provision has both weaknesses and restricting fisheries access through the PNA, strengths. It has been criticised for creating rather than the FFA, the broader membership duplication among different organisations. of which is a barrier to reaching agreement. This led to attempts in 1988 to coordinate the The tuna fisheries example also demon- activities of regional organisations through the strates the potential for complementarity. PNA South Pacific Organisations’ Coordinating members have been the key driver of regional Committee, which has since been renamed the cooperation in fisheries management, Council of Regional Organisations in the harmonising terms and conditions for fishing Pacific (Herr 2006). Continuing duplication vessels, and restricting access to fisheries later resulted in an effort to reduce the number among distant water-fishing nations. Many of of regional organisations through the Regional these measures have subsequently been Institutional Framework process, which adopted by the broader FFA membership. FFA achieved limited change given political support, in turn, has been crucial in the imple- economy factors (Chand 2010).16 It would mentation of PNA-agreed measures, with the probably be more efficient to coordinate FFA providing technical knowledge and finan- pooling in a more uniform way under a single cial assistance (much of it donor funded), and supranational organisation, such as has until recently, performing the role of secre- occurred to some extent in the European tariat to the PNA. Union. A centralised arrangement would give Two other features are evident when exam- greater clarity of political purpose and help to ining pooling initiatives across the Pacific. streamline reporting and governance. Extensive reliance on donor funding for However, the patchwork approach is also pooled service delivery sets the Pacific experi- highly pragmatic. The patchwork of clubs ence apart from that of other regions and reflects the efforts of Pacific Island states to marks a departure from club theory. On navigate the challenges to pooling identified average, the initiatives we examined received earlier, with pooling progressing where over 80 per cent of their funding from development partners. USP receives 21 per cent of its income from donors, which also fund schol- 16. It did succeed in reducing the number of CROP agencies from 10 to 8, but that number is considerably larger arships that form part of the 25 per cent of than would have been the case had the ‘Pacific Commis- revenue received in tuition fees. The PRAI sion’ proposed by Hughes (2005) been established. receives only NZ$2,600 in membership fees

© 2014 The Authors. Asia and the Paciﬁc Policy Studies published by Wiley Publishing Asia Pty Ltd and Crawford School of Public Policy at The Australian National University 16 Asia & the Paciﬁc Policy Studies •• 2014

Figure 2 National-level Capacity Building and Donor Funding in Regional Initiatives

Pooling of eﬀorts to Pooling of build naonal capacity service delivery Not reliant on MSC donor funding Air Paciﬁc

PNA Fiji bulk SPTO PFL pharm.

UNICEF vaccines USP iniave PASO

FFA OCO Paciﬁc catastrophe SPBEA PT&I APTC PPA POA risk insurance PIPSO PHAMA PWWA PRAI Donor funded OCTA PFTAC PIRRC PRISM RAMSI

APTC, Australia-Pacific Technical College; FFA, Forum Fisheries Agency; MSC, Micronesia Shipping Commission; OCO, Oceania Customs Organisation; OCTA, Office of the Chief Trade Adviser; PASO, Pacific Aviation Safety Office; PFL, Pacific Forum Line; PFTAC, Pacific Financial Technical Assistance Centre; PHAMA, Pacific Horticulture and Agricultural Market Access Program; PIPSO, Pacific Islands Private Sector Organisation; PIRRC, Pacific ICT Regulatory Resource Center; PNA, Parties to the Nauru Agreement; POA, Pacific Ombudsman Alliance; PPA, Pacific Power Association; PRAI, Pacific Regional Audit Initiative; PRISM, Pacific Regional Information System; PT&I, Pacific Islands Trade and Invest; PWWA, Pacific Water and Wastes Association; RAMSI, Regional Assistance Mission to Solomon Islands; SPBEA, Secretariat of the Pacific Board for Education Assessment; SPTO, South Pacific Tourism Organisation; UNICEF, United Nations Children’s Fund; USP, University of the South Pacific.

towards its NZ$3.2 million budget. The FFA has led to disengagement among Pacific Island receives over 60 per cent of its budget from states in several initiatives examined as part of development partners; over 35 per cent is this study. income it generates through registering foreign A second distinctive feature of ‘regional’ fishing vessels and other schemes. initiatives in the Pacific, and one not discussed The attraction for development partners in previously, is the strong focus on capacity funding regional initiatives is obvious: building at the national level. Eleven of 20 regional approaches enable donors to generate initiatives examined as part of this study economies of scale, reduce transaction costs involved a national capacity-building element and spread spending across a greater number (see Figure 2) and this is a primary component of countries. For recipients, reliance on donor in four cases. Capacity-building initiatives are funding has positive and negative impacts. The in many cases warranted. But they can also be provision of funding by development partners considered to contradict the central purpose of has enhanced financial viability, in many cases pooling. Pooling aims to deliver services on a avoiding a situation in which a pooled service regional basis in order to overcome national ceased to exist owing to under-capitalisation. capacity constraints. Regional capacity- This was evident in the case of PFL. But the building initiatives aim instead to build prevalence of development assistance also national capacity to deliver services on a inevitably affects the incentives of regional national basis. These contradictions are rarely organisations, reducing their accountability to acknowledged, and point to confusion about Pacific Island states (Hughes 2005; Chand the term ‘regional service delivery’.17 Inter- 2010). Development assistance can thereby result in the funding of regional schemes that 17. There are interesting parallels between this and the are not valued by Pacific Island countries. This tendency for development partners to label projects that

© 2014 The Authors. Asia and the Pacific Policy Studies published by Wiley Publishing Asia Pty Ltd and Crawford School of Public Policy at The Australian National University Dornan and Newton Cain: Pacific regionalism 17 views with regional organisations indicate that challenge. Political leaders are less likely to such emphasis on building national capacity support pooling initiatives given that their ben- also reflects the demands of Pacific Island efits are highly uncertain (due to principal– governments. agent problems), take time to materialise and are generally attributed to regional agencies 5. Conclusion rather than national governments. A broader issue is the limited support for regionalism There has been a significant increase in the among the public in the Pacific; regionalism of number of investigations and attempts at the kind advocated by development partners is regional service delivery among Pacific Island a foreign concept that is relatively new and states in the last decade. Regional service pro- lacks legitimacy. vision, or pooling, has been advocated on the There are successful examples of pooling in grounds that the centralisation of expertise and the region despite such challenges. Effective economies of scale can help Pacific Island initiatives filled a clear gap in service delivery states respond to a range of development chal- and were supported by Pacific Island govern- lenges and capacity constraints. The establish- ments and citizens. Successful initiatives also ment of the Pacific Plan has provided impetus benefitted from good leadership that consulted to this trend, with the plan promoting pooling and enjoyed the confidence of stakeholders in nine key areas. and effectively managed conflicts of interest. This is the first published study of experi- Many unsuccessful initiatives did not meet ence with pooling in the Pacific since 2005. these criteria and consequently lost the support The study of 20 pooling initiatives in the of members as conflicts of interest and finan- region found that pooled service provision has cial troubles arose. achieved mixed results in the Pacific and that The study showed that a patchwork of despite some success stories, it has not met the pooling initiatives has emerged in the region. optimistic expectations articulated in the Pooling initiatives vary enormously, some- Pacific Plan. There are a number of explana- times overlapping and sometimes comple- tions for this that are linked to the challenges menting one another. This has both positive inherent to voluntary regionalism. The remote- and negative implications. The patchwork ness, small size and diversity of Pacific Island approach in some cases results in duplication, countries reduce the net benefits of regional as is evident in the large number of regional service provision, making it difficult to offset organisations with overlapping purposes that adjustment costs and the loss of (significant) operate in the region, and in corresponding ‘sovereignty benefits’ currently enjoyed by efforts to consolidate this regional architec- Pacific Island states. The limited capacity of ture. We have argued that the patchwork under-resourced and overburdened bureaucra- approach also involves benefits, as it helps to cies to engage with regional service providers ensure that pooling proceeds where it provides is also a factor. Remoteness, small size and net benefits to members. limited capacity are commonly used to argue This is not to argue that reform cannot be of for regionalism in the Pacific. This article has benefit in the region. Greater coordination of argued that these factors, which constrain initiatives that form the patchwork, as has been national service provision, are also obstacles to recommended in the Review of the Pacific regional service delivery. Plan, could help minimise overlap while ensur- Political economy factors also work against ing that initiatives generate net benefits, regional service delivery. There are strong provided that coordinating mechanisms incor- vested interests in national service provision, porate the views of member countries. As with which make the pooled provision of services a all such institutional arrangements, the success involve ongoing ‘capacity supplementation’ as examples of any coordinating mechanism will depend on of ‘capacity building’ (Herr & Bergin 2011; Haque et al. how it is established and the support that 2012). it receives from Pacific Island governments.

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