The president, who serves as both head of state and head of government, is directly elected for up to two consecutive four-year terms using a two-round system, with a runoff if no candidate wins an absolute first-round majority. Surangel Whipps Jr., brother-in-law of term-limited incumbent Tommy Remengesau Jr., was elected in two rounds in November 2020, defeating outgoing vice president Raynold Oilouch. Whipps was sworn in as president in January 2021.

The bicameral National Congress consists of a 13-member Senate and a 16-member House of Delegates. The Senate is directly elected by block vote in one national constituency. Members of the House of Delegates are elected from single-member constituencies corresponding to the country’s 16 states, which vary in population. All members of the National Congress are elected for four-year terms. Congressional elections were held in November 2020, concurrently with the presidential contest. Most House of Delegates incumbents won new terms, while seven senators were reelected.

Electoral administration is widely considered to be fair and impartial. A review of the Senate’s size and electoral system is undertaken every eight years by a Reapportionment Commission. The most recent review took place in 2016.

There are no laws restricting the formation of political parties, but in practice all candidates run and compete freely as independents. Politicians tend to organize in loose political alliances, often based on clan or family relationships.

Although there are no political parties, lawmakers do organize into informal progovernment and opposition camps, and no single political force has control of the legislature. Power is transferred democratically between rival politicians.

Palau receives financial assistance from the United States under the CoFA, but the US government does not exert improper influence over the country’s internal politics. While the political views of traditional chiefs are respected, they do not have authoritative control over the choices of voters.

Women generally have equal political rights in law and in practice. Some state-level legislative seats are reserved for male chiefs, who in turn are customarily chosen by councils of women elders. After the November 2020 polls, only one woman held a seat in each chamber of the National Congress.

About a third of the population consists of foreign nationals who do not have political rights in Palau. Citizenship must be inherited from at least one parent, as there are no provisions for naturalization.

In 2019, former president John Toribiong (2009–13) launched a petition seeking to amend the constitution in order to end the acceptance of absentee ballots, asserting that citizens living outside the country wielded too much political influence.

Palau’s democratically elected government determines and implements policy without undue interference. Traditional chiefs formally play an advisory role regarding customary matters through the national Council of Chiefs. While they also exercise informal influence over government policy, this is widely seen as a positive check on potential mismanagement or abuse of power by elected officials.

The CoFA, in effect since Palau became independent in 1994, ensures self-government but also provides for close military and economic relations with the United States, including responsibility for Palau’s defense. A scheduled 15-year review of the compact resulted in a 2010 bilateral agreement on development aid and other benefits to last until the next review in 2024. In 2020, during a visit by the US defense secretary, then president Remengesau invited the United States to establish a military facility in the country. CoFA renewal negotiations, which had begun in 2019, continued during 2022.

Palau has maintained diplomatic recognition of Taiwan even as several other Pacific nations have shifted their recognition to China. President Whipps used his inaugural address in January 2021 to reiterate his desire to support Taiwan and push back against Chinese government influence.

In February 2021, President Whipps announced that Palau—along with four other Micronesian countries—intended to leave the PIF. Member states had been divided over who should next receive the post of secretary-general, which was eventually given to a politician from the Cook Islands, part of the Polynesia region. Whipps and others argued that the leadership should have been passed to a candidate from Micronesia. The withdrawal plan was “paused” in February 2022, though one country, Kiribati, proceeded with its withdrawal in July.

High-ranking public officials have faced corruption charges in recent years, and several have been convicted. The government and lawmakers have deliberated on strategies to deal with corruption more effectively. The Office of the Ombudsman currently operates as part of the president’s office under an executive order.

Palau has been accused of failing to combat international, potentially illegal tax-avoidance schemes. In 2018, the European Union (EU) removed the country from its list of “non-cooperative jurisdictions for tax purposes,” explaining that local authorities had pledged to implement certain reforms. However, the bloc returned Palau to its list in 2020 on the grounds that the government had not fulfilled its pledges. Palau remained on the list as of 2022.

A 2014 Open Government Act provides for public access to official documents and hearings, and government officials are obliged to submit annual financial disclosures that are available to the public. However, authorities have sometimes resisted disclosing requested information, particularly at the subnational level.

Freedom of the press is respected. There are several independent news outlets, including newspapers and broadcasters, but they often struggle financially. Regional and international news services are also available. Internet access has been hampered by high costs and lack of connectivity outside the main islands.

Constitutional guarantees of religious freedom are upheld in practice. Although religious organizations are required to register as nonprofit organizations, the process is not onerous or restrictive. Foreign missionaries are also required to obtain a permit.

There have been no reports of restrictions on academic freedom.

There are no constraints on political discussion, and the government does not monitor personal communications.

Freedom of assembly is protected by the constitution and respected in practice.

Nongovernmental organizations operate freely, with various groups focusing on issues such as environmental conservation, youth development, public health, and women’s rights.

Workers can freely organize unions and bargain collectively, but there are no laws specifically regulating trade unions or strikes or prohibiting antiunion discrimination. Union membership and activity are low in practice, as the private sector consists mostly of small, family-run businesses.

The judiciary has a reputation for independence and integrity. The president appoints judges to lifelong terms based on recommendations from an independent Judicial Nominating Commission, which is made up of three presidential appointees, three jurists named by their peers, and the chief justice.

The authorities generally uphold legal safeguards against arbitrary arrest and detention, and trial proceedings ensure due process.

Law enforcement agencies maintain internal order, and instances of abuse or impunity are rare, though overcrowding in the country’s limited detention facilities remains a problem.

The legal system prohibits discrimination based on gender, race, place of origin, and other categories. Sexual orientation and gender identity are not protected categories, but Palau repealed legal provisions that criminalized consensual same-sex sexual activity in 2014. Women generally enjoy equal treatment in practice.

Foreign nationals sometimes face discrimination regarding employment, education, and other matters. Tourism from China in particular has created jobs but also raised the cost of living, and some locals regard the presence of Chinese businesses and residents with hostility; media investigations have raised concerns about links between Chinese business interests and both the Chinese government and organized crime. However, the number of Chinese tourists has fallen in recent years due to Chinese state policy.

There are typically no significant restrictions on freedom of movement, including internal and international travel. Palau restricted inbound travel in response to the COVID-19 pandemic in 2020, but these measures were gradually lifted in 2021 as vaccinations increased.

The legal framework generally supports property rights and private business activity, and the government has undertaken reforms to improve conditions, though some bureaucratic obstacles and corruption-related impediments persist.

Noncitizens cannot purchase land, which is traditionally inherited matrilineally among Palauans.

Personal social freedoms are largely respected, and women have equal rights regarding marriage, child custody, and other personal status matters. Rape, including spousal rape, and domestic violence are criminal offenses, though instances of domestic abuse are often not reported to police.

Residents generally have access to economic opportunity, and the law provides some protections against exploitative labor practices. However, enforcement of such safeguards is inadequate, and foreign workers remain vulnerable to sexual exploitation, forced labor, or otherwise abusive working conditions in sectors including domestic service and agriculture. Some officials have been accused of complicity in human trafficking.

The US State Department’s 2022 Trafficking in Persons Report noted that the government made efforts to combat human trafficking during its reporting period, including convictions of one trafficker and one official for trafficking-related corruption. However, the report noted that the government lacked standard operating procedures for proactively identifying trafficking victims.