ISLANDS AND SMALL STATES INSTITUTE Occasional Papers on Islands and Small States SMALL ISLAND ECONOMIES: CARIBBEAN VERSUS PACIFIC

After a review of the small island economy literature, this study compares the average performance of 16 Caribbean versus 15 mainly Pacific islands with three from the Indian Ocean. Mean difference analysis is employed across 22 socio-economic and demographic variables. Results confirm previous research. The Caribbean outperforms the Pacific with higher per capita GDP and life expectancy and lower infant mortality and fertility. Different migration experiences discriminate the more dynamic Caribbean characterized by heavy immigration from the relatively stagnant Pacific marked by chronic emigration. The three determinants offered to account for these differences involve significant Caribbean advantages: (1) geographic proximity to the major global markets, (2) early post-war development of international tourism and offshore banking, and (3) a longer and more intense period of colonisation that early on established basic infrastructure and market institutions. ∗ Jerome L. McElroy is Professor of Economics at Saint Mary’s College in Notre Dame, Indiana, USA. His research specialty focuses on the behaviour of small island economies. § Kimberly J. Medek is a 2012 graduate of Saint Mary’s College, Notre Dame, Indiana, USA.