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Open‐air marketplaces are vital to food security, livelihoods, and the national economy in Papua New Guinea (PNG). Over the past 60 years, rapid growth of urban populations, changes in global commodity prices, and the decline in value of the PNG currency have stimulated demand for domestic fresh food. Selling fresh food in marketplaces has also become an attractive way to earn money for rural producers, whose returns on labour on their export crops have declined, and for urban residents struggling to make a living. This in turn has led to significant changes in PNGʼs marketplaces: spatial and temporal changes, changes in what is bought and sold, changes in who is selling, and changes in how food is transacted. In this paper, we bring together research on PNGʼs marketplaces from between 1961 and 2022 to document these changes and their causes, alongside important continuities, and to examine the implications and substantial gaps in our knowledge. [ABSTRACT FROM AUTHOR]

Papua New Guinea (PNG) has faced a foreign exchange (forex) shortage since 2015. The Bank of PNG has resorted to forex rationing to protect reserves, leading to a large backlog of orders and import compression. This paper surveys the structure of PNGʼs forex market and analyses recent market conditions. We argue that a real exchange rate depreciation is required to restore currency convertibility. We develop a forex market model that features a backlog of unmet orders which suggests that a frontloaded depreciation is preferred to an often‐favored gradual adjustment. Empirical results indicate that the governmentʼs large budget deficits have contributed to the forex shortage, highlighting the need for greater fiscal restraint. In the longer term, we argue for more exchange rate flexibility and forex allocation through competitive auction. [ABSTRACT FROM AUTHOR]

Abstract: The paper discusses the problems that have plagued service delivery in Papua New Guinea—both over the long term and with the rollout of the District Development Authority Act of 2014. Various principal/agent and moral hazard problems are identified as well as the persistent poor delivery of national government funds to the local level; the difficulty of recruiting civil service skills into positions in local‐level government; and confirmation that the power to make decisions at the district level remains much the same as before with the composition and influence of the District Development Authority Boards little changed from the former arrangements. Looking at service delivery from a supply–demand perspective, ways are suggested in which improvements may be realised. It appears more likely that improvements will come from an emphasis on increasing the demand for better governance of service delivery rather than from continuing to seek improvements in the supply side of service delivery. [ABSTRACT FROM AUTHOR]

Abstract: Clientelism is a central feature of politics in Solomon Islands and Papua New Guinea. Most voters vote in search of personalized or localized benefit, and most politicians focus on delivering benefits to their supporters at the expense of national governance. In this article, I explain how clientelism impedes development in both countries. I then describe underdevelopment's role in causing clientelism. I also explain the resulting trap: clientelism causes underdevelopment, and underdevelopment causes clientelism. Because of the trap, clientelism will shape the two countries' politics for the foreseeable future. However, the history of other countries gives cause to believe it can be overcome in the long‐run. In the second half of the paper, I explain how change may occur. I also outline implications for aid policy, looking at how clientelism constrains the impact aid can have, and explaining how donors can act to maximize their impact in a difficult environment. [ABSTRACT FROM AUTHOR]

Abstract: Papua New Guinea's (PNG) resource boom has come to an end. Theory suggests that the real exchange rate (RER) should subsequently depreciate in order to restore internal and external balance. In practice, however, the imposition of foreign exchange controls has led to a large backlog in foreign currency orders suggesting that the RER is significantly overvalued. The purpose of this paper is to inform the ongoing policy debate surrounding this issue by estimating the extent to which PNG's RER is currently misaligned. Our results suggest that the kina should depreciate by about 20% to close the gap between the actual and equilibrium value of the RER. Otherwise PNG is likely to pay high economic costs as real overvaluation sustained through foreign exchange restrictions led to resource misallocation, lower economic growth, black markets, and ultimately a balance of payments crisis in many other developing countries in the past. [ABSTRACT FROM AUTHOR]