Preliminary study on the construction of an index for ranking countries according to their economic vulnerability

Abstract

Many counties, face special disadvantages associated with small size, insularity, remoteness and proneness to natural disasters. These factors render the economies of these countries as very vulnerable to forces outside their control - a condition which sometimes threatens their very economic viability. As is well known, many Island Developing Countries (IDCs) experience disadvantages of this type, but their GDP per capital statistics tend to conceal this reality.

In this paper an attempt will be made to construct an index for ranking counties according to their economic vulnerability. The index is not intended as a yardstick of poverty as such, but as a measurement of the lack of economic resilience arising from the relative inability of a country to shelter itself from forces outside its control. [excerpt]