Fiscal Decentralisation in a Divided State: Bougainville in Papua New Guinea

Abstract

Is fiscal decentralisation in a polity divided by languages, cultures, tribes, and geography a means to nation-building or a route to secession? I consider the case of Bougainville in Papua New Guinea to provide nuanced information on the above question. This case study reveals that fiscal decentralisation, agreed to as part of a peace agreement signed in 2001 following a decade-long civil war in Bougainville, provided the opportunity for national consolidation. However, tensions surrounding the implementation of arrangements for budgetary support of Bougainville are forcing further fracturing. A definitive answer to the question of whether fiscal decentralisation helped or hindered nation-building will be provided by the referendum, due by mid-2020, when the people of Bougainville will have the option to vote for independence from Papua New Guinea.