The challenges posed by high balance of payments deficits that manifest as high saving-investment gaps in Papua New Guinea (PNG) are analysed. Foreign aid can play play a pivotal role to fill these balance of payments or savings-investment gaps. Australia as the largest donor of foreign aid to...

This paper measures the extent to which both donor finance and resource revenues have contributed to higher rates of expenditure in key development sectors of the PNG economy-social services (including health and education) and infrastructure, between 1975 and 2010. Estimated elasticities are...