Tuvalu is an independent constitutional monarchy in the southwest Pacific Ocean. Formerly known as the Ellice Islands, it separated from the Gilbert Islands after a referendum in 1975, and achieved independence from Great Britain on October 1, 1978. Its population of 10,200 live on eight of Tuvalu's nine atolls with a total land area of less than 10 square miles. Tuvalu is a "special member" of the Commonwealth, eligible for benefits from its functional affiliates but not required to attend the Heads of Government Meetings. In 1986, Tuvaluans approved a new, autochthonous constituition.

The British monarch is titular head of state and represented by a Tuvaluan governor general. The governor general's functions are largely ceremonial and he is appointed on the advice of the prime minister in consultation with Parliament. In 1991, Parliament approved a study of the possibility of making Tuvalu a republic, which would bring to an ending the Queen's status as head of State. Currently, effective executive power rests in the cabinet which consists of the prime minister, who is elected by Parliament from among its members, and not more than four ministers, who are members of Parliament selected by the prime minister. The cabinet is collectively responsible to Parliament for its actions.

The unicameral Parliament has the power to make laws and consists of twelve elected members. Four islands send two members each, two vote toghether for one member, and the other three islands send one member each. Elections are by universal suffrage of all citizens over eighteen years of age. Parliament is presided over by a speaker elected by the members from their own ranks. Parliament can remove the prime minister from office by passing a no-confidence vote. Elections are held every four years, or sooner if Parliament is dissolved by the governor general in accordance with the constitution.

The court system consists of the soverign in council, court of Appeal and the High Court, which are courts of general trial and appellate jurisdiction, and the Magistrates' Courts, Island Courts, and Land Courts, lower courts with limited jurisdiction. As declared by the Laws of Tuvalu Act 1987, there are five sources of law in Tuvalu; the constitution, acts of Parliament, customary law, applied laws, and the common law. In addition, international law also applies in Tuvalu.

Local government consists of a Town Council on the main island of Funafuti and Island Councils, first established in 1965, on seven other islands. Each council provides local services and consists of six elected members, one of whom acts as president.

Tuvalu has proved politically stable while politics has been relatively low-key. There are no political parties. However, members of Parliament had tended to align themselves with either Sir Toaripi Lauti, Tuvalu's first Prime Minister and present Governor General, or Dr. Tomasi Puapua, who served as Prime Minister from 1981 to 1989. In 1989, Dr. Puapua lost the election to Bikenibeu Paeniu, a political new-comer who won the seat of his home island in an earlier by-election prior to contesting for the Prime Ministership. Following a two elections in 1993 made necessary due to an earlier Parliamentary deadlock, Kamuta Latasi became Tuvalu's new Prime Minister narrowly defeating incumbent Paeniu. Tuvalu's minute size and almost total lack of exploitable resources suggest that most of the population will remain dependent on subsistence activities for the foreseeable future. Tuvalu exports small quantities of copra, sells licenses to foreign ships wishing to fish for tuna in it 200 mile exclusive economic zone, and has a successful philatelic bureau. Otherwise, it must depend on remittances from expatriate Tuvaluans and external aid funds. In an effort to address this issue creatively, the governments of Australia, New Zealand and the United Kingdom in conjunction with the government of Tuvalu established the Tuvalu Trust Fund in 1987, under which the three donor nations contributed Aust$24.7 million. This money has been placed in portfolio investments, and the net income each year is paid to Tuvalu to help meet its recurrent budget.