International Conference on Small States and Economic Resilience
Valletta, Malta: 23 - 25 April 2007
CONCEPTUALISING AND MEASURING VULNERABILITY AND RESILIENCE
Lino Briguglio* and Gordon Cordina**
ABSTRACT
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The paper explains the methodology that the University of Malta has developed to assess the risk of
being negatively affected by external shocks. The paper associates economic vulnerability with inherent
exposure to external economic shocks and economic resilience with the nurtured ability to withstand or
bounce back from such shocks. In this approach, economically vulnerable countries (mostly small states)
are considered to be permanently economically vulnerable because of their small size, but they can adopt
policy measures to reduce the risk of being adversely affected by such shocks.
The paper presents the economic resilience index, also developed by the University of Malta. This index
relates to policy-making and basically measures the extent of good economic governance in countries,
assuming that such governance enables a country to withstand economic vulnerability.
The resilience index is coupled with the Vulnerability Index, relating to inherent economic features, which
was also constructed by the University of Malta.
The juxtaposition of these two indices leads to the classification of countries into four categories:
1. Best case: Low vulnerability scores, high resilience scores (mostly well-governed developed
countries)
2. Worst case: High vulnerability scores, low resilience scores (mostly small badly governed
countries)
3. Self made case: High vulnerability scores, high resilience scores (mostly small well-governed
countries)
4. Prodigal son case: Low vulnerability scores, low resilience scores (mostly large badly governed
developing countries)
The paper emphasizes that (1) the fact that small states tend to be more economically vulnerable than
small states has been amply proven on the various studies on this issue, including those carried out by
the University of Malta and the Commonwealth Secretariat (2) that such vulnerability is inherent and (3)
given this reality policies aimed at promoting the sustainable development of small states should focus
on resilience building, mostly to enable small states adopt sound economic governance.
*
Director, Islands and Small States Institute, University of Malta, Valletta, Malta
**
Lecturer, Economics Department, University of Malta
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