A Fork in the Road

The 1990s was, until now, the most significant – and certainly the most auspicious – decade for SIDS in the postcolonial period because the critical mass they attained in the international system – comprising a fifth of UN members – helped to instigate a degree of collective cross-regional island consciousness. This was, in turn, reinforced by an unambiguous sense that SIDS faced a range of analogous, pressing challenges (Corbett et al. Reference Corbett, Yi-chong and Weller2021). The SIDS agenda thus arose in an era in which these island states were either taking their first tentative steps as young nations or recovering from the traumatic commodity crashes of the preceding decade and confidence in post-colonial ideas about the merits of national developmentalism had been shaken (see Payne and Sutton Reference Payne and Sutton2007). But in retrospect, many SIDS benefitted from the ‘permissiveness’ of this period – albeit unevenly, and with significant distributional inequalities – as they worked hard to transition away from preference-based agriculture to exploit new niches in emergent services sectors (more on this in Section 2). By dispensing with state-led developmentalism, they also became more assertive about the way their small size created unique economic and environmental vulnerabilities.

In 1990, prior to the second World Climate Conference, thirty-nine countries established the Alliance of Small Island States (AOSIS), which helped create the SIDS label, and then spent the next few years disseminating it assertively throughout the UN system as part of the early round of global climate change negotiations (Ashe et al. Reference Ashe, Van Lierop and Cherian1999; Sutton Reference Sutton2001; Betzold Reference Betzold2010; Corbett et al. 2019). Working through AOSIS, they ensured the ‘special case’ of SIDS was captured in Agenda 21 of the 1992 United Nations Conference on Environment and Development (Ashe et al. Reference Ashe, Van Lierop and Cherian1999). Recognition of the special vulnerabilities of small island communities was not new, but it was given moral impetus by impending climate change (Corbett et al. 2019). By the mid-2010s many international organisations (IOs) had recognised the SIDS agenda and had dedicated hubs and workstreams, a remarkable achievement given that mainstream theories of International Relations (IR) would predict that these are the countries ‘least likely’ to influence global affairs (see Keohane Reference Keohane1969).

But since this relative high point, the world has become considerably harsher for SIDS. The three norms that led to an unprecedented era of ‘permissiveness’ noted earlier all came under severe strain by the end of the 2000s. Geopolitically, the unipolar moment was remarkably short-lived: the hubris of the post-9/11 Iraq invasion in 2003 demonstrated not the extent of American power, but its limits, and it revealed fissures in multilateral institutions that have only spread further, infecting every IO to some degree. Economically, the overconfident certainties of the ‘Great Moderation’ were rapidly called into question as neoliberal globalisation hit the rocks during the Global Financial Crisis (GFC) of 2008/9 (see Helleiner Reference Helleiner2010). Environmentally, as the frequent alarms sounded by climate scientists coincided with ever-more harrowing real-world disasters, it became clear that what we now call global warming is accelerating and likely to exceed numerous planetary tipping points sooner than expected (Wunderling et al. Reference Wunderling, Donges, Kurths and Winkelmann2021). These processes are, to a significant degree, the result of changes in the global balance of power, in which the relative economic decline of the West was mirrored by the concomitant rise of ‘the rest’ or the so-called ‘BRICS’ countries, and especially China (Bishop and Murray-Evans Reference Bishop and Murray-Evans2020).

For SIDS, this means that the rules shaping their interaction with IOs have not kept pace with the reality of their developmental predicament: depending on the territory in question, this is generally a mixture of volatile growth, elevated debt burdens (usually in the Caribbean) or aid dependence (often in the Pacific), severe exposure to external shocks, and therefore drastically accentuated vulnerability. Conceptually, opponents of differentiation have questioned whether the concept of vulnerability is a useful way of distributing development assistance and concessional finance (for discussion see Corbett Reference Corbett, Yi-chong and Weller2021, Chapter Five). By contrast, small state experts have increasingly questioned whether a narrow measure of GNI per capita remains an adequate measure of development in SIDS (Robinson and Dornan Reference Robinson and Matthew2017; Bishop et al. Reference Bishop, Kerrigan, Bacon and Spicer2023). Practically, IOs have questioned whether SIDS can absorb assistance and generate the types of gains that ODA and concessional finance generate elsewhere. SIDS have responded by attempting to develop better measures of their unique conditions, including the recent UN Multidimensional Vulnerability Index (MVI). This attempts to show in a ‘data-driven manner’ the intersecting ways in which SIDS are vulnerable and, on this basis, justify their case for ‘special and differential treatment’ (SDT). But the technical solution is yet to shift the political landscape.

This resistance matters because it is occurring at the same time as the conditions that have underpinned economic development in SIDS are rapidly deteriorating and critical funds are not forthcoming (Wilkinson et al. Reference Wilkinson, Panwar and Pettinotti2023). In general, ODA to developing countries has declined, albeit with a marginal increase in 2020, largely through donations of COVID-19 vaccines (Prizzon Reference Prizzon2022). But SIDS have suffered significant losses over the past decade (Wilkinson et al. Reference Wilkinson, Panwar and Pettinotti2023). This mirrors the broader decay in the liberal multilateral order that has characterised the post-global financial crisis period. As implied earlier, departing metropolitan powers expected SIDS to continue to rely on agriculture – generally bananas, sugar, and copra – as the basis of their postcolonial development model (Bishop Reference Bishop2013). In contrast to contemporary opinion that the lack of agriculture in SIDS is a result of scarce land and distance to export markets, the shift from the GATT to the WTO in the mid-1990s was a catalyst for the removal of EU concessions, which in turn led to the collapse of agricultural export commodities by the turn of the millennium (Payne Reference Payne2006; Heron Reference Heron2011). This was replaced by tourism and financial services, both of which had enjoyed a global boom from the 1980s (Connell Reference Connell2013). This new economic model brought levels of development in many SIDS that were the envy of many other larger postcolonial states. But they were vulnerable, too: 9/11 led to increased regulation of financial services and, over time, ever-greater forms of oversight and monitoring (Vlcek Reference Vlcek2007). Tourism is prone to global market fluctuations – brought on by events such as the global financial crisis and COVID-19 in which it quite literally ground to a halt – and its long-term success is threatened by climate change. The upshot is that SIDS are in desperate need of SDT at the very moment at which their agenda is stalling in IOs.

The geopolitical context, as evidenced by the Trump presidency, China’s rise and its relationship with its periphery, including Hong Kong, and the fact that armed conflict has returned to continental Europe, is also changing. The direction of travel appears to be the potential unravelling of the post–Cold War liberal order (e.g. Nye Reference Nye2017; Ikenberry Reference Ikenberry2020). This may present some opportunities but also an increased existential threat to SIDS as the structurally weakest members of the international system. Amidst this flux, we ask: what does genuinely sustained development mean for SIDS?

Our Argument: Enhancing the Permissive Liberal Order

Academics and policymakers have spent much of the late twentieth and early twenty-first centuries framing the development challenges faced by SIDS as the dynamic consequence of inherent vulnerabilities and forms of resilience (see, for example, Baldacchino and Bertram Reference Baldacchino and Bertram2009; Briguglio et al. Reference Briguglio, Cordina, Farrugia and Vella2009; Mycoo Reference Mycoo2018; Kelman Reference Kelman2020; Moncada et al. Reference Moncada, Briguglio and Bambrick2021 for discussion). Vulnerability was said to arise directly from small size and isolation which produced diseconomies of scale that dramatically magnified the impacts of exogenous shocks (e.g. extreme weather events, global economic downturns, or pandemics). Resilience arose from the inherent advantages of small size, including the ability of SIDS to engage in niche forms of ‘enclave capitalism’ (e.g. financial services, tourism, and sovereignty sales). For some, those emphasising vulnerability were too deterministic because of the focus on what SIDS cannot do rather than what they can. This trapped them discursively, limiting the constraints facing them to endogenous weaknesses rather than systemic inequalities (Lee and Smith Reference Lee and Smith2010). For others, those emphasising resilience could be excessively voluntaristic and over-optimistic about the extent to which the agency of SIDS can transcend their inherent vulnerability: no matter how developed a small state becomes, it will always be highly exposed to sudden and disproportionate shocks that can reverse that development to a relative extent that simply is not the case for larger countries (Bishop Reference Bishop2012).

This framing allowed academics and policymakers to explain the unique condition of the group but also variation between individual SIDS whose distinct trajectories are said to be a consequence of shifting vulnerability, on the one hand, or resilience, on the other. We do not seek to relitigate these debates here. In our view, it is unarguable that the extent of SIDS resilience is unavoidably embedded within the contours of their inherent vulnerability, and this does, in turn, derive from their size, remoteness and insularity (Bishop et al. Reference Bishop, Scobie and Corbett2021a). They are, therefore, not two sides of the same coin, but rather alloys from which the coin is mixed, intrinsically and inseparably integrated with each other (see Hay Reference Hay2002). Our specific intervention in this Element turns on the crucial, but unacknowledged, point that the vulnerability-resilience framing focuses primarily on intervening variables – that is, shocks and capacity – rather than the underlying norms of the international order on which they depend and are notably permissive (Sharman Reference Sharman2015, Reference Sharman2017). The permissive order is contingent on the establishment of the UN in 1945 and subsequent decolonisation. But its current form was codified by the adoption of the UN’s Declaration of the Right to Development in 1986. The evolving shape of this order remains vital to comprehend what sustainable development means for SIDS because permissiveness is the essence of their ‘special case’. SIDS have the biggest stake in the maintenance of key twentieth-century norms – sovereign equality, non-interference, and the right to development–because they underscore their differentiation and thus survival. By starting our account with permissiveness and survival we provide a clearer articulation of what development means for ‘special case’ countries, and how it might be created and pursued beyond more resilience and less vulnerability (Bishop et al. Reference Bishop, Scobie and Corbett2021a).

By ‘permissive’ we mean a liberal order that upholds the three norms mentioned earlier: sovereign equality and non-interference, which are enshrined in the UN Charter, and the right to development (see Sharman Reference Sharman2015, Reference Sharman2017: 560–61 for discussion). In a permissive liberal international order, the norms of sovereign equality and non-interference are upheld regardless of the size and ability of individual states to defend themselves against armed conflict. The consequence is that a state as small as Tuvalu (population, 11,000), that does not maintain a standing army but has the same vote in the UNGA as China (population, 1.4 billion), faces limited systemic pressures to seek military protection from larger states. Likewise, in a permissive liberal international order the imperatives of the economic self-help principle are somewhat reduced by the provision of foreign aid, with many Pacific SIDS recipients of the highest levels of ODA per capita in the world (Dornan and Pryke Reference Dornan and Pryke2017). To be sure, some Pacific SIDS also remain designated as Least Developed Countries (LDC) by the international community, which raises questions about how useful ODA is for achieving development in SIDS, and sea-level rise presents an existential threat to low-lying atoll states, rendering questions about economic viability in relation to size irrelevant. Nonetheless, the acceptance of these norms ensures that:

Indeed, Sharman notes that small states have delegated fewer sovereign prerogatives than much larger and wealthier members of the EU (Sharman Reference Sharman2017: 561). The upshot is that, rather than competitive selection, in which economic viability or security predetermines the survival of states under anarchy, under a permissive liberal international order, small states not only survive, but they exercise autonomy. And if that order is enhanced, this self-determination might continue to sustain their development.

Intellectually, this is a similar argument to that outlined by the critical IR scholar Amitav Acharya (Reference Acharya2014, Reference Acharya2018), who has emphasised that world order is not something that rests solely on the material power of hegemons: it is constructed (and contested) on the basis of shared (or resisted) norms and practices. Three specific ideas from his work chime with our analysis here. One is that these norms are also reproduced by non-hegemonic actors who reshape them; they are not passive recipients of them. Another is that existing order is breaking down in the wake of decaying US hegemony, leading to what Acharya calls a ‘multiplex world’ with ‘both risks and opportunities for managing international stability’ (Acharya Reference Acharya2017). This means that elements of ‘order’ and ‘disorder’ can exist simultaneously. A third is the notion that globalisation will not disappear: it will change in form and become less western-centric as the ‘rising powers’ accrue ever-greater economic power (see Bishop Reference Bishop2016). Where we differ (slightly) from Acharya is the implication that we are only now entering the post-American world. Mainstream IR has spent much of the post-2008 period worrying about this question; however, many working in critical International Political Economy (IPE) actually date the end of US hegemony to the economic crises of the late 1970s, and the emergence of contemporary neoliberal globalisation (see Bishop and Murray-Evans Reference Bishop and Murray-Evans2020). The crucial point is that this marked the moment at which the United States (US) was no longer truly ‘preponderant’ across all domains of hegemonic power, and could not decisively recast world order in its own image (Payne Reference Payne2005).

Perhaps ironically, it was also a period – in retrospect – during which many SIDS navigated a range of destabilising economic upheavals to exploit the ‘globalisation niches’ that emerged to great effect. The issue, from their perspective, is less that world order destabilised, and more that a period in which permissiveness was at its height may now, since the twin 2008 and 2020 crises, be giving way to something considerably less so. We are, of course, not trying to suggest that everything was rosy under neoliberal globalisation. While the causes of the climate crisis can be traced back to European industrialisation, it has accelerated rapidly under this order, which has so far also proven incapable of reversing course. A permissive order has also reproduced, in many ways, neocolonial relationships and patterns of control that are undoubtedly inequitable. This is in part because the liberalism on which that order was based was often honoured in the breach, masking the enduring pursuit of self-interest on the part of powerful states, along with the bending of IOs to serve their interests, or disregarding them when this was resisted (Muzaka and Bishop Reference Bishop2015). Moreover, for SIDS specifically, this epoch brought with it a range of thorny problems that we discuss in the Element, including the defeat of national development projects, the imposition of structural adjustment, reduced trade policy space, painful economic transformations, elevated debt burdens, the rise of illicit economies and violence, and accentuated demographic and social inequality. Neoliberal capitalism was, then, far from perfect. Indeed, a more ‘embedded liberal’ form of globalisation – reflective of the kinds of social democratic compromises that existed between 1945 and the late 1970s – would likely have been more permissive (see Bishop and Payne Reference Louis and Payne2021a). This is the future order we argue SIDS should seek to create.

In making this case we must first admit, to our surprise, the hitherto unacknowledged benefits of a permissive liberal international order. In retrospect, it was, to some degree, ‘better’ than many possible alternatives that may have existed. The US hegemony on which it was anchored certainly constrained the options of many SIDS, perhaps most infamously in the brutal destruction of radical political experiments in places like Grenada and Jamaica in the 1970s and 1980s or the advancement of American corporate interests in the ‘banana trade war’ that decimated export agriculture in other Eastern Caribbean islands in the two decades that followed (Clegg Reference Clegg2002). But it also provided – certainly in theory, if not always in practice – the public good of international order and relatively open markets on which their successful adjustment depended. In this sense, it offered opportunities that, crucially, might not have existed in a less permissive order, something that appears increasingly evident today as US hegemony is an advanced state of decay (Cooley and Nexon Reference Cooley and Nexon2020) and the neoliberalism of the recent past has given way to much darker forms of more monopolistic and exploitative ‘disaster’, ‘surveillance’ or ‘cannibal’ capitalism (Klein Reference Klein2008; Fraser Reference Fraser2022). These morbid tendencies have only intensified through and beyond the COVID-19 pandemic, essentially extending and worsening the stagnation that came in the wake of the global financial crisis (Tooze Reference Tooze2021; Baccaro et al. Reference Baccaro, Blyth and Pontusson2022). The relative permissiveness that existed prior to this witnessed the promotion of IOs and myriad global governance regimes in which SIDS could participate and pursue their interests – even leading initiatives as norm entrepreneurs (Corbett et al. 2019) – and, until now, was undergirded by a comparatively benign natural environment (or, more pessimistically, reservoirs of ecological capital that could be depleted).

Whether or not we agree that the permissive order was mostly good or mostly bad, the key point is that SIDS’ ability to exploit it was contingent on a geopolitical context in which interstate conflict was rare, borders were porous, and openness and interconnectedness were prized. These conditions, which the countries we now call SIDS and their intellectuals helped to create during the decolonisation period (Getachew Reference Getachew2019), provided them with a space to identify and exploit niches in creative and innovative ways that leveraged, rather than overcame, the advantages of their small size and peripheral position in global affairs (Baldacchino Reference Baldacchino2010). If any or all of these conditions, and the institutions that sustain them, are removed, then development progress in SIDS becomes unsustainable (in the economic sense). Rising geopolitical tensions between great powers and climate change are thus potentially existential threats for their postcolonial development model.

What Next for the Liberal International Order?

The term ‘critical juncture’ is used by political scientists to refer to particular moments in which agents’ choices are especially significant (Capoccia and Keleman Reference Giovanni and Daniel Kelemen2007). These moments are usually only apparent in hindsight – revealed by the backward glance of the historian. But, as mentioned earlier, we know they are important because SIDS have faced such moments before. Our intervention is made in that light. The argument presented in this Element is necessarily tentative, as claims that SIDS face a critical juncture at which they might become unviable have been made repeatedly since the end of the Second World War (see e.g. Doumenge Reference Doumenge1989; Cole Reference Cole and Cole1993). In each instance the alarmism has proven to be false. But rapid change has also occurred, as we saw in the 1990s. Creativity, both individually and collectively, was crucial to this adaptation and we continue to place great stock in the ability of SIDS to shape these changes to suit their developmental needs.

This Element is designed to assist in that effort by mapping out the potential scenarios and consider how SIDS might maintain, and even enhance, the permissiveness of the liberal international order. Our analysis is structured around three potential scenarios: (1) that the order becomes more anarchic, competitive and self-help; (2) that the order moves to a more muscular liberalism; or (3) that the order is augmented to become more permissive. We assess that the third scenario is the most desirable for SIDS and outline the types of strategies and issues that they, and other states who seek to uphold a permissive liberal international order, might champion. Indeed, we go so far as to argue that we can assess how permissive the liberal international order is by the way it treats SIDS as its structurally weakest members. In making this case we borrow heavily from IR theory in particular, with classical realists having long viewed conflict between self-interested states as the inexorable outcome of power imbalances in an anarchic international system. This view is countered by liberals who argue that cooperation can produce order and mitigate anarchy. Each position, at the extreme, reflects the two outlier scenarios – self-help vs muscular liberalism – that we discuss throughout the Element.

These three scenarios are primarily a heuristic or analytic device. We employ heuristics because it helps to think through the issues and possibilities. But they unequivocally should not be confused with facts or be used as a basis for prediction: they are ‘rules of thumb’ or mental ‘shortcuts’. The standard we set for them is that the reader can imagine them occurring. That is, they are plausible possibilities grounded in real-world questions and challenges rather than thought experiments of the type employed by philosophers to establish principles. It is therefore important to state from the outset that each is fundamentally a tendency of the same order. Aspects of all three have always been latent in the ‘real-world’ post-1945 order – whether its embedded liberal, neoliberal, or, now, perhaps, ‘post-neoliberal’ variant – and they will likely exist simultaneously in the future (alongside patterns of order and disorder as suggested earlier). But, the point is that the extent of each, or its effects in specific global policy domains, will differ, and potentially come into conflict with the others. We could certainly imagine a world in which ‘muscular liberalism’ dominates environmental and economic domains but a ‘self-help’ scenario pervades security discourse, for example, and the transitions between them may not be as clear and obvious as our stylised account suggests. Yet the most beneficial tendency is, in our view – and on the basis of the analysis at hand – the permissive, and a world in which that orientation is most pronounced vis-à-vis more competitive or muscularly liberal logics is one that is likely to redound to the benefit of SIDS specifically, and larger states, too.

As outlined in our discussion of Acharya, a key building block of our argument is the idea that international orders or regimes, including the climate regime, are social institutions (Young Reference Young, Gasser and Young1998) constituted by norms or appropriate standards of behaviour that reflect what actors consider to be morally and ethically correct (Finnemore and Sikkink Reference Finnemore and Sikkink1998). Norms are created by the common understandings of actors based on shared learning, maintained by their inherent legitimacy and reinforced by their incorporation into regulatory and legal systems. These frameworks and structures are characterised by a complexity of actors, institutional interplay, institutional complexes (Gehring and Oberthur Reference Gehring, Oberthür, Young, King and Schroeder2008), modalities of hierarchy, space, scale and networks that are involved in agenda setting, decision-making, policy implementation, monitoring, and review (Biermann and Pattberg Reference Biermann and Pattberg2008; Dellas et al. Reference Dellas, Pattberg and Betsill2011). The contestation of key norms is what makes this a critical juncture for SIDS in which alternative scenarios appear possible.

Maintaining Diversity in the Coming Order

SIDS helped create the current permissive liberal international order (Getachew Reference Getachew2019), and this Element starts from the assumption that they can be key players in the formation of the coming order, too. Our claim is that the revival of a permissive liberal international order will require a simultaneous strengthening and weakening of norms and practices of global governance. SIDS need stronger multilateralism because their survival as states depends on the continuance of global norms. They also need multilateral processes to work better, especially in climate finance. But it also must be weakened in relation to forms of conditionality and large state regulation if SIDS are to maintain, let alone extend, the developmental gains made during the late twentieth and early twenty-first centuries. Our hope is that by recasting the debate about their development to focus more on the international governance context that sustains SIDS, rather than the domestic factors that act as intervening variables, we can help to shift international opinion towards more viable alternatives and the kind of ‘global bargain’ that is required (Bishop et al. Reference Bishop, Kerrigan, Bacon and Spicer2023).

The types of changes that reformers should immediately pursue include:

1. 1. altering the way development assistance is allocated, as current formulations do not account for relatively wealthy yet highly vulnerable states;

2. 2. generating new forms of debt relief that will arrest the current debt trap in SIDS, releasing funds that can be used to provide better public services and address social issues;

3. 3. improving climate financing mechanisms, so that promised adaptation funds in particular are both easier to access and can be more easily absorbed to strengthen resilience of SIDS;

4. 4. using international law to press for clarity on responsibilities and seek compensation for climate and environmental harms suffered by SIDS;

5. 5. reforming the international financial institutions themselves, particularly the Multilateral Development Banks (MDBs), and ensuring SIDS’ priorities are better represented in these changes.

This list is certainly not exhaustive, and these changes may not be transformative in the manner imagined by architects of the New International Economic Order (NEIO) half a century ago (Getachew Reference Getachew2019). But the combination might provide SIDS with a better chance of securing a prosperous future than the rapidly deteriorating status quo. They are a first step. Medium-term options include:

1. 1. expanding but democratising and constraining multilateral organisations. SIDS need representation in the G20, for example, with Singapore a possible candidate and site of a permanent secretariat (see Bishop and Payne Reference Louis and Payne2021b);

2. 2. further reform of the development architecture to recognise the unique circumstances of SIDS and the accumulated historical debts of colonisers; and

3. 3. recasting how IOs support climate adaptation, to include but also go beyond loss and damage compensation, while also recommitting the world to more aggressive targets.

Again, these are illustrative options with the common aim of enhancing permissiveness. The thread that ties them together is that academics and policymakers need to focus specifically on how SIDS’ development is enabled and constrained by the global governance architecture and its ‘ruling ideas’ (Ban Reference Ban2016). By implication, if the development of SIDS is going to be rendered genuinely sustainable, then global institutions need to become even more sensitive to their distinctive needs (Scobie Reference Michelle2019a). If they do not, an already troubling developmental panorama could see their progress wound back significantly.

SIDS Economic Development in Historical Context

Caribbean states were among the first to be colonised by Europeans during the so-called Age of Discovery. They imported with them a model of plantation slavery that had first been trialled in the Macaronesian Atlantic islands – Madeira, the Canaries, and the Azores – that remain territories of Spain and Portugal (Greenfield Reference Greenfield1977; Fradera and Schmidt-Nowara 2013). Plantation slavery and colonialism continued through the Age of Empire until 1804 when Haiti forcibly seized independence from France (James Reference James and Walvin2001 [1938]). During this period, these islands were sources of hitherto unimaginable wealth for Europeans, who went to the new world in search of gold and instead found a much more valuable commodity in sugar (Williams Reference Williams1980 [1944]). Indeed, it is difficult to overstate the wealth – and the immiseration – generated by sugar. In 1763, to settle the Seven Years War, France ceded its continental North American possessions – the whole of Canada and the American mainland east of the Mississippi – for just the island of Guadeloupe, which was considerably less productive than St Domingue [Haiti] or Jamaica. The wealth generated by the transatlantic plantation model, in which slaves were brought from Africa to work Caribbean plantations producing sugar for metropolitan consumption, began to decline from the late eighteenth century, partly due to South American competition and partly due to the emergence of sugar beet production in Europe (Richardson 2009a; 2009b; 2015). Declining profitability was thus a key factor in the decision by metropolitan governments to support abolition, which came into effect for the British Caribbean colonies after Westminster passed legislation in 1833 (Lewis Reference Lewis2004).

A plantation economy was imported to the Indian Ocean and some Pacific islands – notably Mauritius and Fiji – during the nineteenth century (discussed in the next section). The historical parallels end there, however. Despite Spanish explorers venturing into the Pacific during the sixteenth century searching for a different passage to India and later using some islands, such as Guam, as waystations for galleons en route to the Philippines, most Pacific islands were among the last to be colonised. Fiji aside, which still has a sugar industry, the main agricultural crop Europeans sought to cultivate was copra, refined from coconut. This industry was never as lucrative as sugar, and the costs of transport from the region were high, so Pacific island colonies were largely neglected. Colonial administration and associated infrastructure development barely extended beyond capital cities (Firth Reference Stewart and Denoon1997). Basic education and healthcare were delivered by mission organisations, or not at all. This form of colonisation stands in direct contrast to the intense centuries-long occupation of the Caribbean in which indigenous communities were replaced by wholly new and modern societies created ‘de novo’ as ‘a tabula rasa on which the European colonisers … put their imprint as they wished’ (Lewis Reference Lewis2004: 3–4).

During the early twentieth century, most of the small islands we now call SIDS struggled to return a profit and thus came to be seen as a burden on metropolitan treasuries. Poverty and underdevelopment were rife, especially in urban settings and among waged islanders. Beyond the reach of the metropole, and especially in the far-flung archipelagos of the Pacific, patterns of pre-colonial ‘subsistence affluence’ continued (Fisk Reference Fisk1970). In much of the Caribbean, sugar production stumbled on. But it was also marked by a striking sense of decline and decay: labour experienced ‘serflike conditions’ that were little better than those of a century earlier when slavery ended (Brereton Reference Brereton1981: 85). Indeed, in 1872, British Prime Minister Benjamin Disraeli had already captured the sense of stagnation by describing territories that once generated unimaginable imperial riches as ‘wretched colonies’, ‘millstones round our necks’ and ‘colonial deadweights’.

This pessimism framed debates about the viability of decolonisation. The Dominican Republic followed Haiti in gaining its independence from Spain in 1865, with Cuba also becoming independent after the war between Spain and the US of 1892, remaining under US rule for four years until 1902. But, elsewhere, SIDS had to wait for the ‘winds of change’ for the topic of independence to be taken seriously, and even then there was often little enthusiasm for it on the grounds that even if the metropole was able to jettison islands that were otherwise a financial ‘burden’, their subsequent economic performance – determined as it was by (dis)economies of scale – was unlikely to be a glowing ‘advertisement for past rule’ (Corbett Reference Corbett2023: 38). Although not always rendered fully explicit, this concern with economic viability unquestionably permeated the politics of decolonisation in small islands. At its most basic, it explains why different groups of states were seen by metropolitan elites to be ‘ready’ for decolonisation at different times. So, after the largest countries seized independence, it was generally only the next-largest ones that were granted independence in the 1960s and early 1970s, with the smallest territories coming later or even, to this day, remaining non-sovereign.

This led to a debate, which persists today, about how SIDS economies might be rendered viable in practice. The first set of arguments proposed scaling up SIDS economies via regional integration. Put most forcefully in relation to the Anglophone Caribbean by Nobel Prize–winning St Lucian economist Arthur Lewis, the argument was essentially that regional integration would create economies of scale and enable import substitution. When coupled with the pursuit of external capital to kick-start industrial expansion – disparagingly termed ‘industrialisation by invitation’ by critics – Lewis argued that this model would gradually internalise the growth dynamic and generate a level of development that had eluded the region post-emancipation (Lewis Reference Lewis1954). For a time, he appeared to be correct, with Jamaica and Trinidad, in particular, achieving substantial economic growth in the 1950s and 1960s. But this growth was short-lived. More generally, regional integration collapsed due to the general unwillingness of British colonial officials to provide substantial economic subsidies and as a result the West Indies Federation (1958–1962) unravelled because the larger islands did not want to be locked into an arrangement in which they were perpetually subsidising their smaller neighbours (see Mordecai Reference Mordecai1968; Bishop and Payne Reference 92Payne2010).

Decolonisation in other islands and regions, which largely occurred from the 1970s onwards, adopted a more conventional nation-state model than the short-lived attempt to create a single, federal, multi-island Caribbean state. It also gave rise to alternative explanations for, and conceptualisations of, economic development in small islands. One of these was dependency theory, an offshoot of Latin American structuralist thought made most famous by Raúl Prebisch and Hans Singer (see Margulis Reference Margulis2017). This encompassed two broad variants: a reformist-structural one associated with thinkers such as Fernando Henrique Cardoso, Enzo Faletto, and Theotonio Dos Santos, and a more explicitly radical Marxian historical-materialist one associated with André Gunder Frank, Paul Baran and Paul Sweezy. Both shared an analysis of the dependency and underdevelopment that afflicted post-colonial societies, but they diverged on the solution: the former viewed ‘dependent development’ as plausible within wider relations of dependency (Cardoso and Faletto Reference Cardoso, Faletto and Mattingly Urquidi1979), but the latter argued a more deterministic line of which the only logical conclusion was a rupture with international capitalism (Frank Reference Frank1967). These debates were mirrored closely by thinkers in SIDS. In the Caribbean, for example, the New World Group (NWG) of scholars at the University of the West Indies (UWI) – comprising many of Arthur Lewis’s critics – developed their own distinctive brand of dependencia, although many distanced themselves from that specific label (see Bishop and Thompson Reference Thompson2020).

The third theory emphasised the impact of smallness on economic development (e.g. Demas Reference Demas1965). The 1938 Moyne Report into Caribbean development saw industrial development as largely unsuited to the region, thus resigning it to a marginal future of plantation agriculture and small-scale manufacturing. Fast-forward to the early 1990s and the creation of the SIDS category, we find the prevalence of similar ideas that emphasise how small geographic size means that SIDS lack adequate, exploitable economic resources, resulting in a limited pool of competitive growth sources, which, in turn, fosters undiversified economies. Due to their remoteness and insularity, SIDS face huge challenges in shipping and other kinds of connectivity. They thus suffer from low production volumes and high labour costs, and are unable to compete on the basis of price on their export products. They are also unable to compete on the basis of quantity due to shortage of land and fragile ecosystems, as well as expensive energy supplies (Dornan and Shah Reference Dornan and Shah2016). Archipelagic SIDS suffer from additional issues such as inadequate levels of government services, which in some cases harbour resentments (Baldacchino Reference Baldacchino2020) and thus threaten political unity. Because they are small, these countries are also extremely trade-dependent, importing even basic items as food and fuel, and with a narrow export base, they are extremely vulnerable to external economic shocks (see Heron Reference Heron2008).

What none of these prior assessments of SIDS economic fortunes predicted is the emergence of ‘enclave capitalism’ or ‘globalisation niches’ and, perhaps more importantly, SIDS’ ability to exploit them (see Baldacchino Reference Baldacchino2010; Connell Reference Connell2013; Rezvani Reference Rezvani2014). This was reflected in the boom in the global tourism industry and parallel ability of the smallest states, in particular, to lease and sell sovereignty in the form of financial services and citizenship by investment schemes. Selling globalised services is dependent on a permissive liberal order, which was, as discussed earlier, effectively created by the political structures of the immediate post-war period – including the norms of sovereign equality, non-interference and the right to development – that intensified once the Soviet Union collapsed in 1989, ending the era of bipolarity in international relations. In particular, a world in which violent inter-state conflict was rare (Sharman Reference Sharman2017), reduced the cost of travel and fast-tracked the creation of offshore financial services centres. This led to a shift in development and growth trajectories unimaginable in previous decades (see Buzdugan and Payne Reference Buzdugan and Payne2016).

We can see the impact of these trends when we compare those islands that have been able to participate in forms of enclave capitalism and those that have struggled to do so. Caribbean and Indian Ocean countries are almost all middle- to upper-middle income countries, for example. Likewise, the best-performing Pacific states, such as Palau, Fiji, Vanuatu, and Cook Islands, all have substantial tourism economies (Wolf et al. Reference Wolf, Moncada and Surroop2022). The LDCs, by contrast, continue to rely on agriculture and other primary sectors rather than services. The exceptions to this trend are the small number of SIDS with substantial natural resources, such as Trinidad and Tobago, São Tomé and Príncipe, Nauru (historically), and Guyana (in the future).

This correlation is obviously a fairly crude and limited measure of development, and there are many other explanations – size, scale, distance from markets, regional specificities – for why SIDS perform differently in terms of growth patterns. Moreover, high levels of per capita income may not represent intrinsically desirable forms of development, as it could well be maldistributed and come at the cost of severe ecological or social dislocation. Indeed, it is often said that the poorest and least developed of the small Eastern Caribbean countries, Dominica, which has no ‘mass’ tourism and a tiny airport that does not serve metropolitan destinations, is the happiest and healthiest, with much of its electricity produced by renewables and both the highest life expectancy at birth in the Caribbean and the largest number of centenarians per capita on earth (Government of Dominica 2022). Nonetheless, the point remains that the more that SIDS were able to exploit globalisation niches – whether in tourism or in other services sectors – the more their per capita income seemed to rise. So, the trade-off of a strong environment and social cohesion in Dominica has been limited economic diversification: the inverse to some neighbouring islands which have experienced higher, but more volatile, growth alongside overdevelopment and greater social inequality (see Payne Reference Payne2008).

In sum, the consequence of these trends is that from the 1980s onwards we could begin to talk about SIDS sharing an economic model distinct from that of other developing countries. To be sure, larger states also have substantial tourism and financial services sectors. But SIDS are almost entirely reliant on them for local income generation because they comprise a disproportionate share of the economy. The model is not without problems, however, as we discuss at length in the rest of the Element. But it is unclear that radical alternatives will offer better outcomes. Rather, we posit that SIDS are likely to achieve more sustained development if we retain and enhance the norms that drove this relative success.

Economic Development and the Future

SIDS have benefitted from a permissive liberal order. But, as outlined earlier, they now face a critical juncture. By considering three alternative scenarios of a changing global order, we throw into sharp relief how high the stakes are for them.

Towards a More Permissive Liberal International Order

Economic development remains contingent on a permissive liberal international order that helps provide long-term, reliable, and cheap development finance. How, then, might SIDS work, individually and collectively, to achieve this? SIDS are already adept at advocating for their unique needs and circumstances to be recognised, and have pushed particularly hard for the MVI to be adopted and used as a complement to GNI per capita, which is a weak measure of material welfare or well-being, particularly for SIDS where it overstates their relative level of development (see Bishop et al. Reference Bishop, Scobie and Corbett2021a: 15–16). The MVI offers a common method for identifying and prioritising those countries with severe structural vulnerabilities, and has given SIDS renewed hope and impetus to the ‘beyond GNI per capita’ agenda. Indeed, it could become, as the UN notes, ‘a vital tool to help small island nations gain access to the concessional financing that they need to survive the climate catastrophe, to improve their long-term national planning, service their debts, and sign up to insurance and compensation schemes that may be their last hope when the waters rise’ (for a discussion, see Bishop et al. Reference Bishop, Kerrigan, Bacon and Spicer2023). But it is not clear yet how donors or MDBs will use the rankings and information about vulnerability in their finance allocations. For the MVI to unlock more finance for SIDS, it needs to gain strong buy-in from across international financial institutions.

Bilateral donors allocate ODA according to their own policies and priorities, but, according to rules set by the OECD Development Assistance Committee (DAC), countries with a GNI per capita above USD$12,695 (in 2020) are no longer eligible and graduate from the list. This excludes eight SIDS that are considered high income. MVI scores could be used to inform the graduation process – potentially providing those countries with high levels of vulnerability additional assistance and more time to strengthen resilience before graduating – but all DAC members would need to agree, and there is strong resistance from some quarters. Nonetheless, engagement between DAC members and SIDS is growing thanks to an OECD DAC-AOSIS taskforce, initiated in 2022, and this will help bring the special circumstances of SIDS to the attention of more development partners. In particular, recognition of aid ineffectiveness in SIDS could lead to further guidance being produced for DAC members and emphasis being placed on long-term capacity building, strengthening of data systems, and prioritisation of finance that strengthens resilience in SIDS.

MDBs are another critical component of the multilateral system and major provider of development finance for SIDS. Set up after the Second World War, but before many SIDS existed, for a long time they ignored the special needs of SIDS partly because engaging them was considered too costly and complex: SIDS have far fewer experts staffing the departments that engage externally; their financing needs are generally perceived as too small (yet also too risky) to be worthwhile facilitating; and they are thought to lack capacity to manage large investments (Bishop et al. Reference Bishop, Kerrigan, Bacon and Spicer2023). The World Bank and Asian Development Bank (ADB) have developed special ‘exceptions’ categories for SIDS so they are eligible for – and receive determined allocations of – grant finance regardless of income level. But how they do this is very different, and other MDBs do not make any exceptions for SIDS. The result is that overall levels of financing to support resilience in SIDS remain low in relation to levels of vulnerability (Wilkinson et al. Reference Wilkinson, Panwar and Pettinotti2023). This is a problem, because it intrinsically undermines the sovereign equality and right to development that they are supposed to enjoy.

Problems still abound when it comes to concessionality for SIDS, because ODA (primarily grants and concessional loans) is predicated on being temporary, so recipients are supposed to outgrow their need for it by developing and thus graduating from the DAC list. SIDS simultaneously have to convince the international community that such finance can generate developmental progress, while implicitly arguing that, because of their structural vulnerability, they may require development assistance into perpetuity. These tensions are inherent in the contemporary MVI process. On the one hand, SIDS are treading a fine line in arguing they are (uniquely) vulnerable due to their distinctive characteristics, while implicitly leaving open the possibility that other states might be too – the MVI being a universal UN index, which does not necessarily capture the main features of vulnerability in SIDS specifically. On the other hand, they are also implying that the MVI is not solely about accessing greater shares of finance to which many of them are not presently entitled, yet maintain hope that it achieves precisely that once implemented (Bishop et al. Reference Bishop, Kerrigan, Bacon and Spicer2023: 3).

Use of the MVI alone will not lead to a radical shift in the SIDS condition. But it can help ensure their survival in an economic, environmental, and geopolitical environment that is rapidly changing. Moreover, initiatives like this – which are both multilateral in intent while also potentially finding exceptions and derogations for specific country needs – are only conceivable, even if not always honoured in full, under a permissive, rather than self-help or muscularly liberal, order. Development finance will continue to be needed by SIDS to invest in opportunities and improve their condition, albeit in an incremental way. For some, this will be seen as a disappointing concession to the limitations of global capitalism. We acknowledge this and will explore it more fully in the next section. We also appreciate that development in SIDS has been uneven, with not all countries and regions benefitting equally. Nonetheless, it is important to recognise that the economic model developed by SIDS in the 1980s and 1990s has often been a remarkable success. That success was contingent on specific political and economic circumstances, however, and the lesson for SIDS is that they should seek to maintain and enhance these conditions into the future, while also mitigating their negative effects, which we will discuss further in the next section.

SIDS Societies in Historical Context

It is hard to overstate the extent to which SIDS are, in general, products of their distinctive historical and geopolitical positioning. As we saw in the previous section, in the Caribbean, pre-colonial society was almost-entirely wiped out by colonisation, with a completely new Creole society transposed onto it. By contrast, European colonisation came relatively late to the Pacific, did not completely eradicate existing society, and its administrative writ did not travel far beyond capitals. This reflected, in part, the archipelagic nature of many Pacific states, their remoteness and insularity, and the relatively limited wealth available to colonisers. By the time colonisation began in earnest in the 1800s, trans-Atlantic slavery was already being abolished and sugar was declining in value. So, with some partial exceptions – indentured labour in Fiji and ‘blackbirding’, meaning coercing or kidnapping indigenous people from Vanuatu or the Solomon Islands to work in servitude in Australian plantations – Pacific colonists could not create analogous plantation societies. Because their economic objectives differed, they often sought to minimise their interference in – and in some cases even protected – traditional ways of life by discouraging white settlers and disallowing land claims (Firth Reference Firth and Borofsky2000).

Nonetheless, the divergent experiences of colonialism in disparate SIDS regions converge in one place: that is, the generation of enduring legacies and social characteristics (or pathologies) that can be traced back to the earlier colonial experience. These effects are reproduced daily, whether through patterns of ethnic stratification or island secessionist pressures; modes of cultural organisation and interaction; the nature of community and familial organisation; ongoing forms of violence and intergenerational trauma; and even quotidian mores, such as dietary preferences that weigh heavily on contemporary health outcomes (see Wilson Reference Wilson2016, Reference Wilson2023; Thompson Reference Thompson2020). In short, colonialism had – and still has – negative impacts everywhere, whether ensuing state forms are larger or smaller, and regardless of the extent of the horrors experienced in individual societies. These effects are therefore ongoing – albeit uneven in their scope – and substantive decolonisation is not a one-off event, but an ongoing process that continues into perpetuity (Banivanua Mar Reference Banivanua Mar2016).

Crucially, its effects are evident in the patterns of inequality and injustice that we see across SIDS. Partly in recognition of this, the early post-colonial period entailed an attempt to right these wrongs by creating more just, fair, and equitable societies. In the Caribbean, this meant the creation of social democracies in which political parties (on both sides) had their roots in a powerful trade union movement whose platforms invariably included strong social rights, institutionalised tripartism, and free healthcare and education. Elsewhere, the absence of plantation agriculture ensured that trade unionism did not take the same form (Bishop, Corbett, and Veenendaal Reference Bishop, Corbett and Veenendaal2020). Consequently, the maintenance of traditional institutions amidst modernity was seen by some as an attempt to ensure forms of social redistribution persisted (White and Lindstrom Reference White and Lindstrom1997). In the Indian Ocean, Mauritius – which experienced indentureship like Fiji, Trinidad, and Guyana – combined interventionism with a high level of trade openness and social welfare, generating sustained growth and development alongside a vibrant democracy in an ethnically complex society (Lindsay Reference Lindsay, Bishop and Payne2018). By and large, most SIDS did not trial socialism or communism, with the exception of important but short-lived experiments in Grenada, Jamaica, and Guyana, and the somewhat anomalous case of Cuba, which has a significantly larger in population than most SIDS but is usually included in the group.

Over time, these systems of redistribution and reciprocity, whether state-led or traditional, have weakened. There are several explanations for why. The first is that emergent neoliberalism undermined early attempts to recast the post-colonial state as a more just and equitable arbiter of domestic economic relations. This was apparent from the unravelling of the NIEO, of which SIDS were champions, and continued via structural adjustment imposed by the IFIs and MDBs (Buzdugan and Payne Reference Buzdugan and Payne2016). Privatisation, deregulation, and liberalisation were largely imposed from outside and regardless of their suitability: ‘discussions about development were no longer ones of grand design developed within the region, for the region, but about how best to administer the programmes that were designed elsewhere under the neo-liberal paradigm’ (Sutton Reference Sutton2006: 59). This process proceeded unevenly across SIDS as a whole, depending on their capacity to resist the imperative of liberalisation or exploit it in the pursuit of growth. The paradox of these ‘pseudo-development strategies’ (Baldacchino Reference Baldacchino1993) is that they drove growth but also aggravated social inequality.

The second reason for a weakening of social welfare systems in SIDS is that this is simply the nature of capitalism, which depends on and encourages individualism (see Sonenscher Reference Sonenscher2022). Yet capitalism in general, and neoliberal globalisation in particular, are not impersonal forces that result from divine intervention, but rather irredeemably political processes (Bishop and Payne Reference Louis and Payne2021a). Caribbean countries were certainly constrained in their options, but the wider context was shaped by the preferences of powerful actors, primarily the US and EU (Girvan Reference Girvan2010). We see similar arguments in the Pacific, but in reverse: economists still bemoan the collectivist inclinations of islanders, including gifting surplus capital to relatives and kin rather than using it as the basis for investment, along with the fact they persist with collective land tenure when private property rights would stimulate growth (Duncan Reference Duncan and Narayan2008). In all cases, the argument is that, while individualism is taking root in Pacific societies, it has not gone far enough to achieve developmental gains. Yet if we prioritise equity rather than growth, then it is arguable that the Pacific’s resistance to neoliberal mores is potentially the very thing that has preserved high levels of social capital, and this in itself is evidence of development, albeit of a different kind.

A third, related set of arguments is that, rather than mitigating poverty and social exclusion, the interaction between small size and collectivist cultures has led to the domination and exploitation of SIDS by key personalities and their families who have sometimes treated their populations as personal ‘fiefdoms’ (Crocombe Reference Crocombe2008). In the Pacific this is often referred to as neo-traditionalism or patrimonialism (Morgan Reference Michael2005). But we see similar patterns in other SIDS, too, with certain families often synonymous with the politics of specific islands – for example, the Birds in Antigua (Gascoigne Reference Gascoigne2023) – despite the absence of so-called ‘traditional’ cultural practices. An optimistic reading of this would be that dominant leaders simply reflect electoral popularity and governing competence: the Barbados Labour Party under Mia Mottley, for example, won successive elections in 2018 and 2022 with a clean sweep of all thirty seats. And, despite having held office for almost twenty-five years as this Element went to press, Ralph Gonsalves of St Vincent actually sought to decentralise power in an ultimately unsuccessful constitutional reform process in the 2000s (Bishop Reference Bishop2011). Nonetheless, whether the cause is population size, political system, or culture, the argument runs that the anticipated outcome in most SIDS is, at best, clientelism, and, at worst, cronyism, nepotism, and corruption, all of which undermine development (Stone Reference Stone1986).

A fourth set of arguments are grounded in critiques – often postcolonial and feminist ones – of religion. Specifically, they see religiosity and the dominance of Christianity, in particular, as ensuring that small states remain conservative societies, to the detriment of some sections of the population, including most obviously women and sexual minorities. But this also affects everyone in some way, such as through resistance to sex education in schools or the retention of misogynistic laws and customs. Despite being signatories to the UN Conventions on the Rights of the Child (CRC) and Elimination of All Forms of Discrimination Against Women (CEDAW), adolescent marriages remain prevalent in some Pacific countries, including Solomon Islands, Marshall Islands, Nauru, and PNG (see UNFPA and UNCIFEF 2022). The region also has the lowest levels of women’s representation in democratic politics globally (Baker Reference Baker2018). Numerous states have, or have recently had, just one or two female MPs, or even none at all. For some scholars, this form of patriarchy is a relic of a particular type of imported religion that arrived with colonialism but is alien to indigenous culture. Some Pacific societies are matriarchal, for example, and others retain a distinct third gender with religious conservatism sitting uneasily alongside traditional belief systems (Schmidt Reference Schmidt2016). Similar arguments are sometimes made about Creole religions and practices such as Obeah, Vodou, and Rastafarianism in other regions. Either way, the point, to return to where we started this section, is that the social settlement in SIDS is blighted by problematic gender norms and practices, often intersecting with racialised hierarchies, that reflect the colonial inheritance (Barriteau Reference Barriteau1998; Barrow Reference Barrow and Barrow1998; Morgan and Youssef Reference Morgan and Youssef2006). These can, in turn, lead to yawning labour market inequalities and sizeable gender pay gaps (ILO 2020) and a triple, quadruple, or even quintuple burden, where women are responsible for domestic labour, paid work outside the home, and the mental and emotional labour associated with caring for children and the elderly.

In sum, a permissive liberal order has produced mixed results for social development in SIDS. The positive effects include obtaining noteworthy levels of – albeit exceptionally volatile – growth that has maintained reasonable living standards and good health and educational outcomes relative to international comparators. The downside is persistent poverty, inequality, and social exclusion. Indeed, tourism infrastructures are themselves emblematic. They have generated jobs, but for limited numbers of predominantly younger people, offering low wages, while enjoying enormous tax breaks and other subsidies, with working conditions waxing and waning alongside upheavals in the global economy. The sector has also colonised limited public space, especially beaches, leading to the implicit – even explicit – exclusion of local people, and reshaped local cultures in often-problematic ways, while reproducing familiar side effects, including severe pressure on scarce natural resources, especially water, permanently blighted natural landscapes and the provision of often-illicit tourist services, such as sex work and drugs (see Lee, Hampton, and Jeyacheya Reference Lee, Hampton and Jeyacheya2015). All of this will be exacerbated, in multiple complex ways, by accelerating climate change, the imperatives of a ‘just’ transition, and wider questions of island ecologies and mobilities, which we discuss in the next section (Bishop et al. Reference Louis and Payne2021b).

Small Island Societies and the Future

The mixed results for SIDS societies produced by the permissive order can explain why many commentators and policymakers would favour the development of a radical alternative. But we think this risks too much, and instead champion the enhancement or augmentation of a permissive liberal order as the best way to manage these pathologies rather than the return of a self-help system or the creation of a more muscular liberalism.

Towards a More Permissive Liberal International Order

There is no single policy that will heal the intergenerational impacts of colonisation, global capitalism, patriarchy, and ethnic division on island communities. Some commentators and policymakers will argue that nothing short of radical re-ordering of the type envisaged by the architects of the NIEO will do. Maybe that is true. But as the previous scenarios illustrate, radical alternatives create their own problems, too. Besides, no amount of re-ordering will change the geographical factors that make SIDS vulnerable: that is, small population size, remoteness, and insularity. These factors make them, by their nature, dependent on a permissive external environment. Therefore, rather than starting again, this Element unapologetically argues that we can augment the current order to improve their condition. Put differently: we can build a better globalisation that simultaneously strengthens multilateral governance while expanding the options for SIDS to pursue their developmental ambitions within it.

A critical way of achieving this is, first and foremost, to expand the fiscal space available to SIDS. In one sense, this is an economic, rather than social, solution, but local resource mobilisation is the most straightforward way for the state to deliver social services and enhance wellbeing. Moreover, the two are intimately linked. These services – health, education, social security, and other social (and environmental) intervention programmes, as well as policing – are almost-always the first to be jettisoned when a fiscal crunch happens, and this in turn negatively affects the capacity of a small country to mobilise the finance necessary to invest in resilience. The consequence is that stagnation can occur, in terms of both the capital stock available (including, of course, social capital) and the everyday quality of state services. By the same token, the opposite is true: the more fiscal space SIDS have to invest in those services, sustaining healthy, highly educated and peaceful societies, the more likely they are to then build and maintain high-quality infrastructure and other capital stock, in turn helping to create resilience.

Yet many are struggling with unmanageable and highly volatile debt burdens: numerous SIDS are amongst the most heavily indebted countries globally, some carry debt-to-GDP ratios of well over 100 per cent of GDP, and these can cost as much as 30 per cent of GNI to service or even 50 per cent of government revenue. As we discuss in the next section, these also tend to be the countries that experience frequent external shocks and – because of their relatively high GNI per capita – have the worst access to concessional financing. So, increasing fiscal space, whether through debt relief or other novel mechanisms, is critical to expanding the scope for social investments in SIDS. In many respects, this is the most elegant solution: reducing debt burdens, or mitigating the risks that lead SIDS to build up elevated debt piles, would be the most effective form of development assistance, not least because it would leave them in control of their own social spending.

The international community also has a responsibility to increase fiscal space in SIDS precisely because they suffer disproportionately from a lack of it, and would, if it were expanded, benefit disproportionately too. Moreover, in a world where many of their challenges stem from participation in a deeply unequal international order inherited from colonialism – where huge wealth was extracted from them – which is still structured in many respects according to neocolonial logics, this would also have the effect of representing some degree of reparatory justice (see Beckles Reference Beckles2013). At present, SIDS struggle to deliver quality education, healthcare, water and sanitation, electricity, security, and safety nets to their populations. Bringing debt down to sustainable levels is, at the technical level, undeniably complicated and full of political tension, and it will require different kinds of mechanisms to restructure and reduce current debt burdens, as well as strong public financial management systems and instruments that can help build reserves and smooth public spending in the future. Debt relief should be a greater developmental boon than any other source of financing, but developing tailored policies that can be applied to increase fiscal space in a diversity of individual country situations is tricky, partly because there are significant data gaps. SIDS need support on debt management, and to negotiate with creditors and bring down the cost of borrowing. But the key point, as with ODA, is that SIDS need a new global bargain that reflects their unique condition.

Under a more permissive liberal international order, SIDS can push the international community to develop innovative finance mechanisms to ameliorate the tight fiscal situation in which they are often trapped. SIDS have been first movers in developing green and blue bonds to increase sustainable finance from private investors and promote environmentally friendly initiatives, without commodifying nature or enabling destructive forms of marine resource exploitation (Voyer et al. Reference Voyer, Quirk, McIlgorm and Azmi2018). They have engaged in debt-for-climate swaps to enable investments that reduce greenhouse gas emissions and enhance resilience to climate change. These initiatives need to be tailored to each context, but they also need to be scaled up, which will require significant collaboration between bi- and multilateral donors, including, ideally, non-traditional donors (see Hurley et al. Reference Hurley, Panwar, Wilkinson, Lindsay and Bishop2024). The rechannelling of Special Drawing Rights (SDRs) should be further considered. Cabo Verde, São Tomé and Príncipe, the Maldives, and Jamaica have all taken advantage of funds from the IMF, and other SIDS can potentially benefit (Bishop and Lindsay Reference Louis and Lindsay2024). Lastly, adopting a more ambitious approach to the current debt, climate, and food crises may form the basis for advocating a new wave of debt forgiveness, providing relief and enabling SIDS to effectively address pressing challenges including climate change, which is the focus of the next section.

SIDS Environments in Historical Context

So far, we have discussed the economic and social history of SIDS in terms of how the conditions and characteristics induced by formal colonialism were reproduced into the independence era. However, this history cannot be divorced from environmental questions. Indeed, the very exploitation of (tropical) islands by colonists was a reflection of both their distinctive physical characteristics and their geographic positioning. This explains why the Caribbean colonial experience – of indigenous genocide, plantation slavery, extractive sugar production, and the establishment of entirely new Creole societies – differed, for the most part, to the Pacific or Indian Ocean equivalent, where more distant, remote, insular societies were not subjected to the same extractive processes in quite the same ways, and pre-existing political structures often endured alongside the implanted colonial order (see Bishop, Corbett, and Veenendaal Reference Bishop, Corbett and Veenendaal2020).

SIDS experienced distinctive patterns of land settlement (and tenure), which in turn shaped how the environment itself would evolve, but many suffered under the exploitative colonial models of plantation agriculture and extractive primary production for export (Barclay et al. Reference Barclay, Wilkinson and White2019). Some have subaerial deposits from past volcanic activity, with hills and steep-sided mountains (Wilkinson et al. Reference Emily, Lovell, Carby, Barclay and Robertson2016). Others are low-lying atolls with the circle-like raised coral at the top of a mountain that is otherwise submerged under the sea. Most SIDS are in tropical climates, enjoy unique flora and fauna and beautiful beaches, making them heavily sought-after holiday destinations (Foley et al. 2023). SIDS are also increasingly referred to as ‘large ocean states’, a reconceptualisation of their size that emphasises how they occupy often-enormous and resource-rich maritime areas covered by their Exclusive Economic Zones (EEZs) (see Chan Reference Chan2018). These 200 nautical miles that extend from their coasts by far exceed their land mass. Thinking about them in this way – as large ocean spaces, rather than small territorial states – also implies that insularity can be beneficial. During the COVID-19 pandemic, such ‘splendid isolation’ did indeed allow many SIDS to shield themselves against the early spread of the virus (Agius et al. Reference Agius, Sindico, Sajeva and Baldacchino2022; Connell Reference Connell2022).

For many SIDS, the coast represents an obvious border – where most of the population, infrastructure, and economic activity is located by the sea, and the sea is visible from much of the interior – shaping psychological conceptions of what it means to be an islander (Bishop and Payne Reference Bishop2012). The same is true of the environment and climate more broadly: people live in unavoidably close proximity to an array of marine and terrestrial animal and plant life, their lives inextricably and viscerally linked to a far greater extent than the urban populations of bigger territories. In short, then, the environment is an integral part of island identity and national policy. Communities have thrived for centuries, despite the threat posed by natural hazards. Locals have relied on rich volcanic soil, a ready food supply, clean water, biodiversity, soil and sand formations, and natural protections from storm surges to survive. SIDS are the global guardians of biodiversity, which holds aesthetic, spiritual, and economic value for their societies.

But long-term survival in many islands is becoming more difficult to envisage because of the intensification of complex patterns of intersecting shocks (Scobie Reference Michelle2019a). SIDS are highly exposed to natural hazards such as hurricanes and cyclones, flooding, drought, and new disease vectors – all of which carry problematic secondary effects – due to their insular tropical location and distinctive topography. Climate change is one of the more relatively recent and pervasive threats, bringing with it troubling challenges linked to sea-level rise, which, in some atolls, is already destroying coastlines. Even for mountainous SIDS, though, it is a pressing concern, because disproportionate concentrations of housing and critical infrastructure – including the most expensive investments, such as airports – are located on the flatter coastal lands, which are themselves limited in scope in territories with small (even tiny) land-to-sea masses (Wilkinson et al. Reference Emily, Lovell, Carby, Barclay and Robertson2016). So, these structures are particularly vulnerable to extreme weather events, and the secondary effects of both immediate shocks and slow-moving challenges like sea-level rise – from saltwater intrusion in delicate and limited freshwater sources to devastating storm surges and beach erosion – continue to accumulate.

These effects are mediated by the distinctive characteristics of individual SIDS, but they all have – to differing degrees – similar patterns of settlement and infrastructural development in coastal areas. Put more crudely: no island can build an airport atop a volcano, and in some, a volcano constitutes as much as 90 per cent of the available land. Around 57 per cent of Pacific Island built infrastructure is located in risk-prone coastal areas (Kumar and Taylor Reference Kumar and Taylor2015). In Kiribati, the flow of rural populations from outer islands to the low-elevated island of South Tarawa (with a total land area of just 31 km²) led to a fourfold increase in the built area located less than 20 m from the shoreline between 1969 and 2008 (Duvat et al. Reference Duvat, Magnan and Pouget2013). Maldives also experienced similar recent rural-to-urban migration (Speelman et al. Reference Speelman, Nicholls and Dyke2016). In the Caribbean, over a decade ago, the cost of climate-related losses was already estimated at $4bn–$6bn per annum, or $187bn by 2080 – in real terms, this number will be much higher today – with water inundation alone likely to decimate almost a third of the region’s airports, almost all of its seaports, much of the limited agricultural land that exists, inducing displacement of hundreds of thousands of people (Bishop and Payne Reference Bishop2012: 1544).

Although these effects will play out unevenly, no small island will be immune from them in general, and some, particularly the atoll states, are acutely vulnerable. A significant proportion of land in the Maldives, Marshall Islands, Tuvalu, Kiribati, parts of FSM, and The Bahamas are likely to be uninhabitable under most IPCC scenarios for sea-level rise by 2100 (Oppenheimer et al. Reference Oppenheimer, Glavovic Glavovic, Hinkel, Pörtner, Roberts and Masson-Delmotte2019). Climate change also contributes to the omnipresent – but less visible, in terms of the global conversation – problem of Sargassum beaching events in the Caribbean, which have rapidly intensified over the past decade and are increasingly devastating for fishing and tourism. This seaweed, which originates in the Atlantic, reaches Caribbean shores in ever-larger volumes because of warming seas, coastal erosion, desertification, and deforestation in the Sahara and South America (Arellano-Verdejo et al. Reference Javier, Lazcano-Hernandez and Cabanillas-Terán2019). The region’s beaches are inundated with dense mats of the noxious seaweed for several months each year (Almela et al. Reference Almela, Appeaning Addo and Corbett2023). Beach clean-ups place a significant financial burden on local tourism and fishers, and are a health concern for local communities.

Global trade – and the pursuit of niche-based development – simultaneously supports and undermines sustainable development in SIDS. On the one hand, it generates exports and much-needed foreign exchange, with ‘mass’ tourism also necessary for ensuring that metropolitan airlines serve small-island destinations (Bishop Reference Bishop2013). But, on the other, it can drive the progressive loss of biodiversity, exacerbating other environmental stressors. These include overfishing, coral bleaching and reef degradation, water pollution caused by effluent and fertiliser run-off as well as other forms of problematic solid waste management. Indeed, the effect of climate change on biodiversity has been amplified by the heavy dependence of SIDS on large-scale ‘mass’ tourism (IPBES 2019). Even ‘eco’ tourism, which, when conducted with sensitivity for local heritage, can be damaging because it also relies on long-haul aviation and can generate unsustainable pressure on the most biodiverse sites – forests, mountains, volcanoes, rural savannahs, farming communities – which host a disproportionate amount of remaining pristine natural patrimony (Bishop Reference Bishop2010). By becoming incorporated into circuits of tourism accumulation, places which were previously relatively isolated can be altered dramatically, both socially and culturally, through their ‘green’ tourism exploitation.

To note that SIDS have contributed least to the problem of anthropogenic climate change yet suffer an unequal share of both its consequences and the imperative of adapting to it, is, to put it mildly, an understatement. A more radical way of putting it would be that the ongoing accumulation of wealth in those richer countries – and now the ‘rising powers’ of China, Brazil, and India, as well as many other large polluting states – rests on their continued immiseration through the plundering of a global environmental commons on which small islands rely and have never themselves exploited in terms of their own accumulated historical emissions, but which, as natural capital depletes, is increasingly failing to support the conditions necessary for their continued existence (Sealey-Huggins Reference Sealey-Huggins2017; Perry Reference Perry2023; Perry and Sealey-Huggins Reference Perry and Sealey-Huggins2023). Indeed, at the global level, the demands made by SIDS – most notably for restricting global temperature rises to 1.5°C of warming over pre-industrial levels – are likely to be breached in the near future, with some scholars even raising the prospect of ‘state extinction’ (Vaha Reference Vaha2015).

These trends fuel urgent calls for environmental justice (see Section 5): SIDS have been at the forefront of collective diplomatic efforts to not simply limit warming, but to demand all manner of compensatory mechanisms to both mitigate the worst effects of climate change and facilitate adaptation to them (Mohan Reference Mohan2023). Understandably, SIDS are actively involved in international environmental negotiations through AOSIS, basing their arguments on the notion that they are ‘the ‘‘canaries in the coalmine’’ in a tragedy of the commons that is unfolding for all states’ (Benwell Reference Benwell2011: 208). They have become powerful norm entrepreneurs, shaping global climate debates and influencing policy, but with mixed success as they face the combined might of the most polluting states (see Betzold Reference Betzold2010; Benwell Reference Benwell2011; Corbett et al. 2019). This builds on a long tradition of SIDS involvement in past oceans negotiations, including the 1982 United Nations Law of the Sea (UNCLOS) Agreement which codified the notion of extensive EEZs.

The point is that while SIDS are not a homogeneous group in terms of their environments any more than their economies or societies, they do face similar challenges to their survival that are amplified by global socio-ecological and economic trends (Popke et al. Reference Jeff, Curtis and Gamble2016). This combination of fragility and vulnerability in the context of global environmental change makes their priorities unique. The current permissive order has enabled SIDS to lobby as a unique group of states who share common challenges for collective action across a number of environmental negotiations. This section weighs how environmental and climate governance could play out under the three scenarios addressed in this volume.

Environmental Policy and the Future

A permissive liberal order has, in the environmental sphere, been a double-edged sword for SIDS. It has facilitated the expansion of a global economy driven by the exploitation of fossil fuels, the depletion of natural capital and ever-accreting levels of atmospheric pollution that severely threatens both the biosphere in general and the ongoing development – even existence – of island societies. Yet, at the same time, it is contemporary neoliberal capitalism, which, for all of its problems and pathologies, potentially embodies the requisite technological dynamism through which global decarbonisation and the NetZero transition may occur. Moreover, the voices of SIDS have been amplified and listened to in multilateral climate politics: although this politicking is regularly critiqued for falling short – ambitions watered down, targets missed, funding mechanisms insufficiently replenished, rhetoric belied by inaction – the very fact that fora exist in which island states can pursue their interests, and those interests are taken seriously, being codified in law and materialised (to some degree) in the various climate funds, matters. This is clear if we consider the alternatives.

Towards a More Permissive Liberal International Order

There is now sustained transnational mobilisation around ‘environmental racism’, ‘ecocide’, and ‘climate justice’ emphasising the essentially discriminatory and unequal burden borne by the Global South, not only in terms of relative historical greenhouse gas emissions, but also the extent to which industrialisation in the Global North rested on colonial plunder and neocolonial resource extraction and, today, reinforces the trajectory of global heating, thereby restricting the policy space of formerly colonised societies to engage in similar forms of polluting development. A successful NetZero transition in the Global North may, of course, alter this calculation, but, even so, without meaningful technology transfer, it could also impose new costs on poorer countries as richer ones redeploy the development gains of the past to re-industrialise and capture emerging ‘green’ sectors. Either way, demands for climate justice, and the already-existing movements that have mobilised around them, may provide the ideological building blocks for a repurposed international order that allows groups like SIDS to have greater leverage in global environmental politics (Almeida Reference Almeida2019).

Prioritising their needs and participation in the governance of, and policymaking in, multilateral climate funds is crucial. At the time of writing, twenty-eight SIDS have fully costed Nationally Determined Contributions (NDCs), amounting to $287 billion over the next decade. Yet while they are considered ‘particularly vulnerable’ by the Global Climate Fund (GCF) and other vertical climate funds, SIDS face significant barriers to accessing the requisite finance (see Wilkinson et al. Reference Wilkinson, Robertson and Treichel2023b). They receive significantly less climate finance when compared with LDCs and other groups of countries (Wilkinson et al. Reference Wilkinson, Panwar and Pettinotti2023). They have high transaction costs because of their geographical remoteness and limited economies of scale, and this is amplified by their archipelagic nature: building the necessary regional infrastructures to offset small size is difficult everywhere, even in the Caribbean where islands are reasonably close to each other (Bishop and Payne Reference 92Payne2010; Bishop et al. Reference Bishop, Scobie and Corbett2021a). The same is true in individual archipelago states – especially in the Pacific and Indian Ocean – where small populations are spread over vast ocean distances. Take Kiribati: the only country on earth to straddle all four hemispheres, consisting of 33 atolls and islands – of which 22 are inhabited with 129,000 people – comprising just 811 km² of land distributed across 3.44 million km² of sea, a distance of 3,900 km from east to west and 2,100 km from north to south. An extreme example, to be sure, but not an unusual one. The use of ‘beneficiary metrics’ by the GCF that assess project costs on per-person benefits is disadvantageous to SIDS since the already-higher transaction costs are spread among often-tiny populations (Wilkinson et al. Reference Wilkinson, Robertson and Treichel2023b). Improved governance of these funds would require more consultative and inclusive decentralised programming and decision-making that are sensitive to the perspectives and concerns of local stakeholders in each SIDS region. This will help the project evaluators to better understand the costs, capacities, and constraints of SIDS in their climate action endeavours.

More broadly, a better alignment between the sources of climate financing for adaptation, environmental protection, and ecosystem restoration would help SIDS. Funds have different mandates, donors, metrics, and fiduciary requirements, often viewing small islands as too small to invest in, while the latter’s ministries and climate departments have minimal capacity, consequently struggling with the multiplicity of arduous application and reporting templates required from each project funder (Bishop et al. Reference Bishop, Kerrigan, Bacon and Spicer2023). Access and reporting requirements frequently have inaccurate assumptions about state capacity when SIDS and regional partners are absent in the co-design of projects. Multi-island programmes and more programmatic finance may help SIDS build capacity over the medium- to long-term (CFAN 2023). The experience of some Pacific countries during the COVID-19 pandemic, where direct budget support from donors was put to good use, is instructive.

The key point is that if SIDS continue to be viewed as legitimate members of an international community predicated on norms of sovereign equality and rights to development, and, crucially, survival, then it is for the climate funds and MDBs to instigate changes in their operating practices to better accommodate their needs and properly serve their interests, not the other way around. This kind of reform – piecemeal as it often may be – and progress on the agendas favoured by SIDS, such as capitalisation of the Loss and Damage Fund, are more likely under a permissive liberal order. Indeed, the very fact that the fund was established, in 2022, is strong evidence of progress achieved under the existing system. However, for these agendas to move forward, island states need to continue to win the normative battle: highlighting their incommensurate lack of historic responsibility for climate change; the existential threat its acceleration poses for their societies; their desperate need for a reduction in greenhouse gas emissions which is proceeding too slowly despite soaking up an excessive share of pooled resources, the pace or extent of which they cannot (and have no responsibility to) influence; the urgency of their attendant need to adapt to the imposed harm of climate change, an imperative for which the relative resources available are smaller, insufficient, and difficult to access; and the ongoing need to cover permanent losses and damages with those contributions, and other forms of development assistance, predicated on justice, not gratuity.

SIDS Diplomacy in Historical Context

Waltz was writing his Theory of International Politics, the foundational treatise of neo-Realist IR, at the exact moment that many of the very smallest microstates were becoming independent. However, these countries have not simply survived politically, but in many cases thrived, shaping the contours of regional and international politics in important ways. The same is true of countries like Malaysia and Costa Rica, with populations of thirty million and five million respectively. Indeed, the latter has generated the most successful economy and peaceful society in Central America despite (or perhaps because of) not having a military. This matters, because for classical realists military strength is the essence of power in an anarchic state system. By implication, the fact that SIDS have thrived beyond decolonisation demonstrates how permissive the order has become. Indeed, we can only imagine what Waltz would think of the idea that Tuvalu – with a population of 11,000, GDP per capita of around USD5,500, and also without a military – might be able to survive as a state, let alone influence world affairs.

Mainstream IR theory therefore has very little to tell us about SIDS: it cannot explain why they have been able to develop distinctive foreign policies that have delivered more than mere survival; how the international system enables or constrains their often-high levels of development; where they have been able to contest, sometimes with great success, the preferences of bigger players; or when this action has led to the creation and shaping of new norms that have influenced important areas of international policy (see Ingebritsen et al. Reference Ingebritsen, Neumann and Gstöhl2012). They have instead been identified as little more than oddities that exist as a consequence of ‘America’s crusading spirit’ (Keohane Reference Keohane1969). However, on the margins of the discipline, and among small state scholars in particular, there exists a considerably more nuanced and sophisticated discussion of their capacity to influence the world system (Baldacchino Reference Baldacchino2023). Indeed, some scholars have gone so far as to argue that they have been engaged in ‘worldmaking’ (Getachew Reference Getachew2019) since the Second World War, and thus the order is, to some extent, ‘adapted’ to their needs. We need not go quite that far in this Element. But we do start from an analogous position that considers SIDS as ‘subjects, not objects’ in international diplomacy (Neumann and Gstöhl Reference Neumann, Gstöhl, Gstohl, Ingebritsen and Neumann2006). Recognising this offers considerable scope to imagine how they might continue to alter the international order for their own benefit.

The first strand of IR theory that takes SIDS seriously accepts the materialist assumption that size, in a broad sense, determines outcomes (see Pedi and Wivel Reference Pedi, Wivel, Thomas Kolnberger and Koff2023). The claim here is that all states have an ‘action space’ or a point at which their capacities and system-determining effects intersect. This action space is contingent on size, however defined, which can explain why larger states, with greater capacity, can exert a proportionate influence on international affairs. Yet smaller states can still act – they are not passive recipients whatever large states decree – albeit their actions are circumscribed to a much greater extent by a system created by great powers. Small states thus have to pursue ‘smart’ strategies and policy ‘entrepreneurship’ to achieve their goals (e.g. Browning Reference Browning2006; Grøn and Wivel Reference Grøn and Wivel2011). Much work in this vein has been developed in Europe and in EU studies in particular to explain the foreign policy agendas and outcomes of the majority of smaller countries in that region (Thorhallsson 2017; Panke 2010). But these lessons can be applied to SIDS, too.

The second strand is a ‘relational’ approach. Rather than emphasising vulnerabilities, this ‘recognises the importance of material capabilities, perceptions, and positionality’ (Long Reference Long2022: 15). However, it does not assume that these phenomena determine outcomes in a mechanistic fashion. Rather, scholars working from a relational perspective argue that we should focus on interactions between states, whatever their size, because it is the asymmetry that matters. Put differently: outcomes cannot only be reduced to size and material power, as relationships, diplomacy, perceptions of shared interests, and so on are important, too. Small states can persuade larger ones to support initiatives that do not redound to the latter’s private benefit because of a perception that they may augment the stock of collective public goods so that everyone benefits. So, for example, even though neither the US nor Australia is as small as Tuvalu, the relationship between them is defined by asymmetry, which has consequences for explaining their foreign policy. The implications are twofold: size matters and ‘there is no single recipe for small states’ foreign policy success’ (Long Reference Long2022: 178).

The third approach argues that perceptions of shared interests may not only influence (asymmetric) outcomes from diplomacy, but the very intersubjective understandings that underpin the international system and practice within it can be redefined and reshaped by the norm entrepreneurship of small-island actors, which in turn generates significant material outcomes that belie their diminutive size. Their lack of conventional power resources can even represent a resource itself, rather than a constraint, enabling action precisely because they can fly under the radar, using their powers of moral suasion, guile, and nimbleness to engage in unorthodox system-influencing behaviour. To understand the influence of a state, then, we have to uncover how their leaders (and other elites) perceive the order, its constituent norms, their meaning and significance, and the choices that this presents, so as to explain actions and outcomes.

The key idea we take for SIDS from this ideational approach, and the one on which this Element turns, is that balancing the norms of a right to development, sovereignty equality, and non-intervention renders the liberal order permissive of small states. Again, as Sharman (Reference Sharman2017: 560) argues, the irrelevance of military threats to statehood, combined with the safety net provided by foreign aid, suggests that ‘the current international system presents even its smallest and weakest members with choices rather than imperatives’. To be clear, small states do not have everything their own way: evidently, international politics still broadly reflects the preferences of the most powerful. Structure and agency remain co-constituted: actors and their decisions are always ‘situated’ in specific contexts. But, the key point is that SIDS are subjects that can act meaningfully with intention and deploy normative power, not objects whose behaviour is pre-determined solely by material inequality or asymmetric bargaining. This can explain why, for example, some small island communities have opted to decolonise via independence and have since pursued non-alignment. Others prefer forms of non-sovereignty or have aligned their diplomatic efforts to those of larger states. A diversity of options is open to leaders from SIDS precisely because they created a system of norms that recognise and protect diversity. The key for their survival at this moment of change is that this diversity is valued into the future.

International Alliances and the Future

A permissive order has not only given SIDS a seat at the table, it has, by codifying their sovereign equality, offered them a framework of laws, regulations, norms and practices through which they might deploy their sovereignty as a resource that produces meaningful outcomes, even wielding disproportionate governing power in some policy arenas (see Bishop and Cooper Reference Bishop and Cooper2018). Although they have fought many losing battles, and frequently been sidelined from some corridors of power – whether overtly, as in their exclusion from bodies such as the G20, or implicitly, by a lack of capacity to participate in processes driven by elite consensus (Payne Reference 92Payne2010; Bishop and Payne Reference Louis and Payne2021b) – the very fact that they have been able to play the game in the first place is remarkable. Yet as the permissive order that facilitated this decays, the alternative scenarios appear rather bleak.

Towards a More Permissive Liberal International Order

Any move to make the order drastically less or more liberal is likely to see key norms that have advantaged SIDS – sovereign equality, non-interference, and the right to development – undermined. Their main foreign policy objective, as individual states and groups, must therefore involve ensuring those norms are maintained, even though they are often in tension and produce forms of ‘organised hypocrisy’. In pursuing this objective, it is important to be mindful of the factors that SIDS have used to secure successes in the past (see especially Corbett et al. Reference Corbett, Yi-chong and Weller2021; Baldacchino Reference Baldacchino2023). Specifically, they have realised their objectives when they have been able to coordinate global positions – rather than being siloed into regions – and maintain an active diplomatic presence in the cities where the major IOs are located, predominantly New York and Geneva. This presence and global coordination has been facilitated by organisations like AOSIS and initiatives like the Commonwealth Small States offices in both cities. But it also relies on SIDS governments themselves prioritising diplomacy via multilateral institutions.

Existing efforts to pursue foreign policy objectives in this way have had most success in the UN system and on environmental issues. SIDS have, as noted, been less successful in economic IOs such as the WTO and the MDBs (Corbett et al. Reference Corbett, Yi-chong and Weller2021). But the principle – that when institutional spaces are created by and for SIDS they are able to maximise them to secure advantages and alleviate their condition – which worked for them in the UN system is applicable to these IOs, too. We therefore advocate for MDB reform in particular as a practical example of how SIDS can ensure the current order becomes more permissive of their presence. This is a priority for all developing countries; but for SIDS, there is a huge amount at stake and they should have a louder voice in this agenda. In particular, the G20 Experts Group on Strengthening the MDBs called for a tripling of MDB financing, the inclusion of global public goods in their formal mission statements, and a new window for funding those programmes. These are critical agendas for SIDS. Dedicated support for global public goods is particularly important for them too as custodians of large EEZs and high levels of biodiversity, for which they are not currently being adequately compensated. SIDS should therefore advocate strongly for concrete action on the World Bank’s new vision to ‘create a world free of poverty – on a liveable planet.’

The ‘Bridgetown Initiative’, launched by Barbadian Prime Minister Mottley during the 2022 UNGA meetings, called for significant increases in access to finance for vulnerable developing countries, including through SDR re-allocations and changes to the global debt management architecture, including wider use of debt pause clauses. Progress is being made on both these issues, but SIDS as a group need to engage more concertedly with this agenda to ensure the results meet their needs and do not end up increasing the costs of borrowing. Other proposed reforms, such as on capital adequacy (encouraging MDBs to unlock more capital) and mobilising private finance for development, are also important for SIDS across all income categories. More finance is needed for them to build resilient economies, but their demands will continue to face opposition from other larger developing countries unless the pot of resources can be increased. On MDB reform, as with other advocacy agendas, SIDS will do better if they stand together, but will also need to connect with, and support, demands and voices from across the G77 plus China group if their special circumstances and priorities are to be meaningfully recognised. MDBs must also acknowledge the importance of traditional knowledge and culture in social and development programmes, meaning greater flexibility and localisation of interventions, as opposed to the neoliberal tendency of ready-made policies and strategies with externally imposed conditionalities.

Our Argument Summarised

We make three central claims in this Element. First, contrary to prevailing wisdom at the time – a predominant view that we generally shared – many SIDS made substantial development gains during the 1990s and 2000s as they transitioned from post-colonial preference-based agriculture and into niche services attendant with the high point of neoliberal globalisation. To be sure, these were unevenly spread, within and between island states, and certainly volatile, reflecting both the essential capriciousness of often-enclave sectors that depend on unrestricted flows of capital and the dependent position of SIDS within the wider global political economy. Indeed, when the global financial crisis struck in 2008, it highlighted not only the scale of exposure faced by highly open small economies when a massive shock arrives, but also how this is exacerbated by reliance on globally integrated sectors like tourism and offshore finance. The arrival of a second ‘once in a generation’ shock just over a decade later – the COVID-19 pandemic – which again halted tourism completely, reinforced this lesson. It also bookended a period of Gramscian ‘interregnum’ where neoliberalism has been engulfed by a legitimacy crisis while ‘morbid symptoms’ have proliferated (see Bishop and Payne Reference Louis and Payne2021a).

Second, the gains enjoyed by SIDS rested on a set of key international norms – sovereign equality, non-interference and the right to development – that were interpreted in the latter part of the twentieth century to underpin a distinctly ‘permissive’ liberal order in which the average size of the state shrunk dramatically. This order, which the leaders of SIDS themselves helped to create, permitted tiny countries to exist as equal members of the international community despite the widespread fear that they could not be self-sufficient (according to mainstream economic conceptions) or self-reliant (according to the assumptions of mainstream international relations). ‘Permissiveness’ therefore refers to the fact that most SIDS do not maintain standing armies with which to defend themselves. Many are heavily indebted, rely on ODA for basic services, do not have their own national currency, and so on. Yet the international community affords a country such as Tuvalu, with a population of little more than 11,000 persons and some of the highest ODA per capita ratios in the world, the same vote in the UNGA as China or the US. If this order were a truly anarchic, self-help system in which states were merging like firms in a process of competitive selection, then Tuvalu and all the countries like it would not exist; they would either be plundered or ignored entirely.

Third, while all of this may appear obvious, restating it matters more today than ever precisely because we are potentially emerging from the interregnum into a new era. At present, the dominant concepts that explain SIDS development – encompassed in the so-called vulnerability and resilience debate – tend to overlook this crucial point. Instead, they focus on intervening variables in a bid to determine when and how inherent size-related constraints can be overcome by the benefits of size-related advantages. This is important work – it challenges the conventional assumptions of both mainstream economics and IR (Bishop Reference Bishop2012) – but it is only useful if we assume that the order is and will remain stable. Put differently: most thinking on SIDS, until now, has implicitly taken the existence of a permissive order for granted. This has the effect of naturalising it, when, in fact, it is historically and ideologically contingent, rooted in a particular time and place. Many have, of course, explicitly critiqued the malign effects of neoliberal globalisation, but this reinforces the point: the order itself is still seen as static, an overweening constraint on action or, in more optimistic accounts, something that enables it.

By contrast, we seek to problematise the nature and character of this order and cast it as a distinct era in human history underpinned by a particular constellation of norms that shape state preferences and social compromises (see Cox Reference Cox1981). So, the main thread tying our argument together is the notion that the permissive liberal order itself is changing, and this, in turn, is both a cause and effect of the shifting balance of state power, the emergence and proliferation of new social forces, patterns of contestation between them, and dominant ideas, norms, and values. In fact, the permissive order is beset by three interlocking crises: (i) an economic crisis that is a function of the inherent contradictions of neoliberal globalisation but was brought to a head by the global financial crisis and further exacerbated by COVID-19 and its aftermath; (ii) a geopolitical crisis brought about by, in the first instance, the changing distribution of global power, the waning of US hegemony and increasing tension between, especially but not exclusively, the US and China; and (iii) the now rapidly accelerating climate crisis, which is long-running but is approaching a series of key tipping points that will intensify economic and geopolitical problems. In short, the combination of these three intersecting crises threatens the continuation of the system of norms and associated rules upon which SIDS developmental gains have been built.

At the same time, the nature of the order is up for grabs: liberalising tendencies co-exist with illiberalising ones, and the future of multilateral politics and globalising economics is very much an open question. So, we have sought to understand the possible effects of this change by way of a three-part heuristic. Scenario One sees the return of a more competitive, self-help system with some advantages for SIDS, including the ability to leverage increased attention from countries such as the US and China to their advantage. We think this scenario will ultimately be to their detriment as it will undermine all three of the key norms of the post–Second World War order. These norms have enabled them to generate unique service-based economies that have delivered levels of development that are the envy of many other postcolonial states. A return to a more competitive, self-help system would see these gains reversed and a return of forms of exploitation – of peoples, communities, and environments – common to the Age of Empire when the large conquered the small.

Scenario Two is the creation of a more muscular liberal order, which might be more popular among readers of this Element, but will present considerable dangers, too. The reason is that, while a more muscular liberal order would retain the right to development as a core pillar in its regime of rights, it would increasingly come to see the norms of sovereign equality and non-interference as a barrier to pursuing it. Instead, a more muscular liberalism would seek to create its version of a more cosmopolitan, individualist future by further shifting authority from the nation state to regional and international forms of governance. International systems that govern state behaviour would promote equality rather than equity, where SIDS, the weakest, are given the same benefits and opportunities as the strongest states, and are forced to play by the same rules. This would be to the detriment of SIDS whose unlikely statehood is premised on structured inequity that provides them with a disproportionate level of influence for populations of their size in regional and international regimes, especially when working together as a collective as they have done with such success in climate negotiations. Instead, their communities would have to rely on the benevolence and technical remedies of faraway policymakers in IOs to a far greater extent than at present, with even fewer levers to exert influence over them.

Scenario Three is the future we prefer. It involves augmenting the order that SIDS helped create and has underpinned their developmental gains over the last three decades by holding the norms that sustain it in productive tension. SIDS are the structurally weakest members of the international system by virtue of their size, whether measured by military, economy, or population. A permissive order provides them with the greatest degree of choice over their own affairs. All other things being equal, we place great stock in the idea of self-determination and the ability of communities to govern themselves. We believe that the relative developmental success many SIDS achieved in recent decades, tempered as it is by inequality, enduring colonial legacies and environmental degradation, support this view.

What Should Policymakers Do Now?

Based on our understanding of how SIDS have achieved important developmental gains over the last three decades and the threat that the immediate, interwoven crisis presents to them, we think policy makers should immediately seek to:

1. 1. alter the way development assistance is allocated, as current formulations do not account for relatively wealthy yet highly vulnerable states;

2. 2. generate new forms of debt relief that will arrest the current debt trap in SIDS, releasing funds that can be used to provide better public services and address social issues;

3. 3. improve climate financing mechanisms, so that promised adaptation funds in particular are both easier to access and can be more easily absorbed to strengthen resilience of SIDS;

4. 4. use international law to press for clarity on responsibilities and seek compensation for climate and environmental harms suffered by SIDS; and

5. 5. reform the international financial institutions themselves, particularly the MDBs, ensuring SIDS’ priorities are better represented in these changes.

These options are illustrative not exhaustive but we favour them because they give SIDS a chance to survive this critical juncture. There are other solutions we have argued for elsewhere (see Bishop et al. 2021), including migration schemes and those such as trust funds to which we are intuitively attracted but are yet to fully explore. The emphasis on these instruments is as much in the broad thrust as much as the specifics: they all seek to make the order more permissive of SIDS and alleviate their condition in such a way that enables them to create new, niche markets. By doing so they are able to maintain and even increase developmental gains made over recent decades. These options thus function as concrete examples of proposals that SIDS can and should push for, thereby substantiating our more abstract and historical account of the key factors that have underpinned their success and the critical juncture we all now face.

In the medium term, there is a much broader menu of options for reformers. For example, we favour:

1. 1. expanding but democratising and constraining multilateral organisations. SIDS need representation in the G20, for example, with Singapore, an AOSIS member, a possible candidate and site of a permanent secretariat;

2. 2. further reform of the development architecture to recognise the unique circumstances of SIDS and the accumulated historical debts of colonisers; and;

3. 3. recasting how IOs support climate adaptation, to include but also go beyond loss and damage compensation, while also recommitting the world to more aggressive targets.

These proposals are more radical and, again, are only indicative. But the overall orientation towards enhanced permissiveness is the same.

Most significantly, if our explanation of the contemporary developmental experience in SIDS has purchase, then these types of policy changes will ultimately larger states, too, because a system that is permissive of small states will also sustain the international order as a whole. We are not saying that they will lead to dramatic shifts in levels of wealth and associated standards of living that might be imagined under more radical proposals for economic re-ordering like those outlined historically under the NIEO, for example.We are also certainly not saying that, in an ideal world, these would be either our preferred choices or the limit of our aspiration. But, we do not live in an ideal world. So, we acknowledge – and rebut below – that the future we lean towards might strike many as insufficiently ambitious. Crucially, though, we think it has the advantage of being possible to obtain. SIDS helped create the order that was advantageous to their development and that of others during the latter half of the twentieth century. It therefore stands to reason that they can help extend and improve it, too.

Anticipating Potential Criticisms

All theories, but especially those that involve gazing into the academic equivalent of a crystal ball, have their limitations. We briefly consider some of them as a way of fleshing out our argument but also buttressing it. The point is that, in making these claims, we have anticipated some of the most obvious criticisms. We are under no illusions that this will satisfy everyone that our narrative is persuasive. But we hope it does reassure readers that we have at least considered its limits.

A World for SIDS

The main difference we seek to make is to advocate for a world order that values a diversity of governing forms. This is the essence of the SIDS agenda: they are different because of the characteristics that make them SIDS and because they are different they need a special deal or bargain. By implication, off-the-shelf one-size-fits-all solutions will not work for everyone. This claim has become widely if not completely accepted among international diplomats and civil servants. But it is also under pressure because of the crisis of economy, geopolitics, and climate we all face. In extreme circumstances, everyone is more likely to reach for extreme responses. These typically prioritise consequentialist logics: that the ends justify the means. In such times, there is a tendency to view diversity and special and differential treatment as a weakness that diverts attention from the ‘real’ problems. Our hope is that, by highlighting the ways diversity is protected by permissiveness, and the benefits it has brought, both to SIDS and the broader international system, we can show that it is both a worthy means and end. A world created for SIDS is likely a better world for all states, too.