AbstractThis Policy Arena examines some of the development challenges faced by SIDS. It brings together a collection of papers arising from the United Nations University World Institute for Development Economics Research (UNU‐WIDER) project [Fragility and Development]. These investigations were presented at the UNU‐WIDER project meeting held in Lautaka, Fiji in December 2006.The Policy Arena contains four studies that look, respectively, at various aspects of trade, foreign direct investment, aid and remittances, and migration, focusing on countries in the Pacific and the Caribbean. This introduction briefly describes the papers and distills some key messages for development policy. Copyright © 2008 John Wiley & Sons, Ltd.