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Paradise Lost? Growth, Convergence and Migration in the South Pacific


  • Norman Loayza
  • Paul Cashin


This paper examines the determinants of growth for nine South Pacific countries during the period 1971-93, using the analytical framework of the Solow-Swan neoclassical growth model. Chamberlain’s II-matrix estimator is used to account for unobserved country-specific heterogeneity in the growth process, and to control for errors-in-variables bias in calculations of real per-capita GDP. The speed of convergence of South Pacific countries to their respective steady-state levels of per-capita GDP, after controlling for the important regional effects of net international migration, is estimated at a relatively fast 4 percent per year. In addition, private and official transfers emanating from regional donor countries have kept the dispersion of real per-capita national disposable income constant over the period, despite a significant widening in the regional dispersion of real per-capita GDP.

Suggested Citation

  • Norman Loayza & Paul Cashin, 1995. "Paradise Lost? Growth, Convergence and Migration in the South Pacific," IMF Working Papers 95/28, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:95/28

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    References listed on IDEAS

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    Cited by:

    1. Patrizia Tumbarello & Ezequiel Cabezon & Yiqun Wu, 2013. "Are the Asia and Pacific Small States Different from Other Small States?," IMF Working Papers 13/123, International Monetary Fund.
    2. Maria Abreu & Henri L.F. de Groot & Raymond J.G.M. Florax, 2005. "A Meta-Analysis of Beta-Convergence: The Legendary Two-Percent," Tinbergen Institute Discussion Papers 05-001/3, Tinbergen Institute.
    3. DOBSON, Steve & RAMLOGAN, Carlyn & STROBL, Eric, 2003. "Why do rates of convergence differ ? A meta-regression analysis," CORE Discussion Papers 2003020, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Stephen Dobson & Carlyn Ramlogan & Eric Strobl, 2006. "Why Do Rates Of Β-Convergence Differ? A Meta-Regression Analysis," Scottish Journal of Political Economy, Scottish Economic Society, vol. 53(2), pages 153-173, May.
    5. Bertram, Geoffrey, 2004. "On the Convergence of Small Island Economies with Their Metropolitan Patrons," World Development, Elsevier, vol. 32(2), pages 343-364, February.
    6. Easterly, William & Kraay, Aart, 2000. "Small States, Small Problems? Income, Growth, and Volatility in Small States," World Development, Elsevier, vol. 28(11), pages 2013-2027, November.
    7. Easterly, William*Kraay, Aart, 1999. "Small states, small problems?," Policy Research Working Paper Series 2139, The World Bank.


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