The international tourism industry is booming, giving many developing nations unprecedented opportunity in trade. But for some developing nations, law and order problems appear to have obstructed growth in tourism. With little attention in the literature given to the influences of safety considerations for tourist demand, this paper investigates the deterrent effect of crime on tourism in developing island economies of the South Pacific and Caribbean. Using annual time-series data, a simple country-specific model is estimated. The empirical results confirm the importance of crime levels as a hindrance to the demand for tourism, the inference being that news of a deteriorating law and order situation in destination countries is being successfully disseminated to potential tourists in source countries despite the general inaccessibility of up-to-date crime statistics.

The European Union grants preferential market access for sugar to a group of African, Caribbean and Pacific (ACP) countries. Sugar exported under these quotas receives between two and three times the world price. These trade preferences are intended as a form of aid, but they tend to stifle productivity growth in the recipient countries. The European Union could better assist ACP countries by providing direct development assistance in place of sugar subsidies, for example by investing the aid transfers into infrastructure or other essential public services. This paper tests this proposition for the case of Fiji using a computable general‐equilibrium model. It is found that significant gains in economic performance can be achieved by employing such alternative strategies for aid. These gains are particularly strong over the medium to long term when the aid funds are diverted to infrastructure development. However, there are issues of equity to consider since, in the case of Fiji, the rural poor would be the losers if trade preferences were to be removed. Moreover, the degree of benefit in alternative strategies such as infrastructure development will be contingent on the economy's flexibility, which in turn depends upon the country's regulatory regime and education performance.

Papua New Guinea has pinned its hopes for economic development on its mineral wealth but, so far, this has been a false promise. Given Papua New Guinea's vulnerability, this raises questions of a Dutch Disease e¡ect. Dutch Disease is dismissed in principle, but an appreciating real exchange rate is considered to have important o¡setting economic consequences via its implications for crime. Using a CGE model incorporating crime as an economic activity, the contribution to welfare of a resources boom is investigated. The results con¢rm that a resources boom will deliver a net welfare bene¢t, but far smaller than the revenues generated would suggest, and at a cost to equity.

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