The Republic of the Marshall Islands and the Republic of Kiribati offe
r circumstances worthy of comparison in terms of development strategy
and outcome. These atoll states share economic characteristics common
to the region, including high levels of aid dependency, little export-
led economic growth, and social problems related to urbanization. Alth
ough the two states are geographically and culturally similar, current
measures of income suggest marked differences in standard of living;
however, gross domestic product measures of income may not accurately
reflect actual levels of the social welfare. An alternative measure, t
he Human Development Index, offers a means to assess the impact of dev
elopment in these two states. Using this index as a guide, this articl
e assesses the impact of economic development on the social welfare. P
olicies relevant to the circumstances of these countries are then brie
fly outlined.