Almost 98 per cent of people in the Autonomous Region of Bougainville, located in the northeast of PNG's territorial waters, voted for independence in 2019.
The referendum was non-binding and must be ratified by PNG's parliament.
It was mandated by the Bougainville Peace Agreement, which was signed in 2001 and ended a decade of civil war between the region and PNG.
Bougainville's leaders have since committed to declaring independence from September 1, 2027.
A Lowy Institute report by Oliver Nobetau says while the peace agreement laid the foundations for the transition from autonomy to independence, it failed to provide a road map for overcoming key challenges.
These include making improvements to people's quality of life, such as providing access to basic services, employment, infrastructure and governance.
"A Bougainville that seeks to achieve independence without a meaningful foundation for development is at risk of replicating the conditions it is seeking to escape," the report reads.
It argues a new agreement is needed between Bougainville and PNG to support socio-economic development and redefine the relationship.
It should focus on co-operative efforts for development, measuring improvement through quantifiable targets and outlining the roles and responsibilities of both parties in achieving them.
The report says Bougainville's public service remains "critically underdeveloped" with 400 employees spread thin across unstable and often temporary workspaces.
Almost 70 per cent of Bougainville's public servants believe their institutional set-up is ineffective to carry out mandated functions.
The report notes while these issues are also found throughout PNG, they lead to a lack of overall government presence felt within society and prevent Bougainville from exercising its autonomy in any meaningful way while undermining its readiness for independence.
"The roadmap for Bougainville's future should not be singularly defined by independence but must be grounded in development and prosperity for its people," the report says.
Five years ago, former Bougainville Revolutionary Army commander Ishmael Toroama won the presidency for his region on a platform of delivering independence for its some 300,000 people.
Bougainville will hold elections later this week.
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