Economic Vulnerability and Resilience of Small States
Publication Year: 2004
Title: Economic Vulnerability and Resilience of Small States
Publisher: Islands and Small States Institu te of the University of Malta
While it is important for small states to improve their awareness of, and come to terms with, inherent and permanent development handicaps arising from small economic size, it is equally important that these countries adopt policy measures that will enable them to build their resilience to improve the standard of living of their population.
This book argues that good governance and appropriate macroeconomic policies in a small state can, to an extent, mitigate the drawbacks of economic vulnerability. Many chapters in this book make the distinction between inherent and self-inflicted vulnerability. There is an attempt to clarify terms by associating vulnerability with inherent features such as economic exposure and export concentration, and resilience with man-made policies, including good governance. This distinction, though somewhat arbitrary, may be a useful analytical tool for formulating development policy.
Resilience building is not costless, and it is particularly burdensome on small states, the vast majority of which have very limited resource endowments and cannot spread overhead costs over a large population. Some chapters of the book therefore recognise the importance of support from the international donor community in this regard.