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The purpose of this paper uses household survey data to model the correlates of household consumption and poverty in Fiji. A multivariate empirical analysis is conducted to ascertain those household and community characteristics that correlate with household welfare and poverty. In particular, the results will show how a particular characteristic will affect household poverty conditional on the level of other characteristics that are also potential determinants of poverty.

The key approach in this paper is similar to Mukherjee and Benson and is based on ordinary least squares (OLS) modeling of the natural logarithm of total per capita consumption of households, which serves as the household welfare indicator, against a set of exogenous determinants such as household and community characteristics. For robustness checks, a probit regression is also estimated with the probability of a household being in poverty as the dependent variable and an identical set of independent variables used in the OLS regression.

The results show that higher levels of education, supporting agricultural growth policies in rural areas and reallocation of labour into the formal sector of the economy will prove effective in reducing poverty at the household level. These results can have important policy implications for design and implementation of poverty reduction policies.

Empirical studies on the determinants of household consumption and poverty are non‐existent in Fiji. This thus is the first study which attempts to model the determinants of poverty at the household level and is the major contribution of this paper.

Education is highly regarded as having a central influence on individuals' understanding and backing of democracy, but whether this occurs in young and small democratic states remain unknown. The purpose of this paper is to examine whether schooling and education have a positive impact on an individual's democratic values in Fiji, whose democratic system has been subject to three coups since independence in 1970.

To achieve the goal of this paper, the ordered probit probability model is used. The ordered probit model serves as a better framework for statistical analysis whenever field survey responses are ordinal as distinct from numerical.

The results from an ordered probit model reveal that the education level does not affect an individual's democratic values. However, it is found that gender, age, and ethnicity do have an influence on individuals' endorsement of democracy.

Democracy has more than once proved to be an elusive dream in Fiji. This paper aims to provide the answer whether education can be the facilitating factor in transition towards a more democratic state.

This is the first study which comprehensively explores whether schooling and education has a positive impact on an individual's democratic values in Fiji.

Understanding the relationship between government revenue and government expenditure is important from a policy point of view, especially for a country like Fiji, which is suffering from persistent budget deficits. The aim of this paper is to investigate the relationship between government revenue and expenditure for Fiji.

The Johansen test for cointegration and Granger causality test are used to conduct the empirical analysis.

The key findings are that: government revenue and government expenditure in both the aggregate and disaggregate sense are cointegrated; in the short‐run government expenditure Granger causes government revenue in an aggregate sense, departmental expenditure Granger causes aggregate revenue, and there is bidirectional causality running between government expenditure and customs duties; and in the long‐run there is evidence of fiscal synchronization, implying that expenditure decisions are not made in isolation from revenue decisions.

This fiscal synchronization has not been able curb the current account deficit in Fiji. Moreover, the confirmation of the spend‐tax attitude of the government does not bode well for the level of investments and skilled human capital in Fiji as this may perpetuate tax increases in the future. Given that the Fiji Government is currently trying to rein in the escalating level of fiscal deficit, it is an opportune time for them to engage in extensive expenditure reforms.

The findings of this paper should allow policy makers to make informed decisions. Furthermore, the paper is different from others because apart from examining the revenue and expenditure in an aggregate sense, it also considers the different components of revenue and expenditure.

The purpose of this paper is to explore the two issues of regional trade agreements (RTAs) and the new theory of international trade and draw conclusions for Pacific Island countries (PICs). The authors provide a deeper conceptual treatment of the consequences of RTAs and analyse the new theory of international trade to explore its implications for trade policy in PICs.

With regard to RTAs, the argument is developed in the context of the conjecture that questions the benefits from adopting more open trade policies with neighbours while maintaining restrictive policies towards the rest of the world. The authors draw on international and regional analytical literature and on recent modelling work to review critically the possible gains and losses of RTAs for PICs. In the latter issue, the focus is on the roles of imperfect competition and scale economies and their relevance to PICs.

Freeing up trade gradually and unilaterally and realizing the benefits of comparative advantage remains the best way to maximise welfare. PICs could be worse off under a complex system of overlapping RTAs and existence of RTAs by Australia and New Zealand outside the region has the possibility of marginalizing weak PICs economies.

PICs are currently at a critical juncture in terms of trade policy making with various trade agreements being thrown in the region and this paper has the capacity to provide some answers to policy makers on the approach to take.

The paper offers insights into regional trade agreements and the new theory of trade.