Case Studies

The Pacific Private Sector Development Initiative (PSDI) is working with the Ministry of Finance and Economic Management (MFEM) to establish a robust regulatory environment for the Cook Islands.

In small economies like the Cook Islands, important public infrastructure, like electricity, water, and sewerage, is often owned by a dominant firm or monopoly. Without strong regulatory oversight, this can result in inefficiencies, high service costs, and poor-quality services for consumers. However, it is expensive and resource intensive for a small economy to support multiple regulators, making a multisector regulator a more practical and affordable solution. PSDI’s 2015 Private Sector Assessment of the Cook Islands identified the absence of independent infrastructure regulation as a key constraint to private sector growth and recommended the establishment of a multisector regulator to promote competition, improve service delivery, and safeguard consumers.

In 2018, the Government of the Cook Islands approved a three-stage plan to establish a multisector regulator. PSDI has been working closely with the MFEM to support each phase of the process since its inception in August 2018.

Stage 1: Telecommunications Act, Competition and Regulatory Authority Act, and establishment of the Competition and Regulatory Authority

PSDI supported the development and passage of the Telecommunications Act 2018, followed by the Competition and Regulatory Authority Act 2019, which established the Competition and Regulatory Authority (CRA) as an independent body, with initial responsibility for regulating the telecommunications sector. PSDI then supported the implementation of the CRA, which has been operational since fiscal year (FY) 2022.

Stage 2: Utilities Regulation Policy and utilities regulation bill

PSDI supported drafting and consultations on a Utilities Regulation Policy, followed by a utilities regulation bill. The bill, which was tabled in Parliament in FY2025, will extend the CRA’s responsibilities to include regulation of electricity, water, and sewerage (with the exception of relevant health standards).

Stage 3: Expansion of the CRA’s responsibilities

The Government of the Cook Islands is considering a further expansion of the CRA's role to include consumer protection, price oversight, and broader competition enforcement. A public expenditure review will be undertaken to inform the scope and timing of this phase.

Building on the success of its support for the Cook Islands to transition from limited regulation to a well-functioning independent authority, PSDI is planning to explore similar multisector regulatory models in other Pacific countries.

This case study is taken from the PSDI FY2025 Annual Progress Report. Read the full report here.