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An Economic Vulnerability Index: Its Design and Use for International Development Policy

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  • Guillaumont, Patrick
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    Abstract

    In response to the need expressed by the UN General Assembly, an economic vulnerability index (EVI) has been defined by the Committee for Development Policy. The present paper, which refers to this index, first examines how a structural economic vulnerability index can be designed for the low-income countries in particular. It recalls the conceptual and empirical grounds of the index, considers the structure of the present EVI, its sensitivity to methodological choices with respect to averaging, as well as related possible improvements, and briefly compares the levels and trends of EVI in various country groups, using a new database from a ?retrospective EVI?. The paper examines how EVI can be used for international development policy, underlining two main purposes: first?the purpose for which EVI was initially designed?is the identification of the least developed countries (LDCs) that are allowed to receive some preferential treatment in aid and trade matters. EVI, in addition to income per capita and human capital, is one of the three complementary criteria a country needs to meet in order to be perceived as a LDC, and consequently it cannot be the sole criterion for countries wishing to avoid exiting the LDC list. And second, EVI is to be used, in addition to other traditional measures, as a criterion for aid allocation between developing countries. We argue that such an inclusion is legitimate for both reasons of effectiveness and equity. The two purposes are presented as complementary.

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    File URL: http://www.wider.unu.edu/stc/repec/pdfs/rp2008/rp2008-99.pdf
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    Bibliographic Info

    Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number RP2008/99.

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    Length: 36 pages
    Date of creation: 2008
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    Handle: RePEc:unu:wpaper:rp2008-99

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    Keywords: vulnerability; aid allocation; human capital; least development countries;

    References

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    Cited by:
    1. S. Balica & N. Wright & F. Meulen, 2012. "A flood vulnerability index for coastal cities and its use in assessing climate change impacts," Natural Hazards, International Society for the Prevention and Mitigation of Natural Hazards, vol. 64(1), pages 73-105, October.
    2. Brunori, Paolo & O'Reilly, Marie, 2010. "Social protection for development: a review of definitions," MPRA Paper 29495, University Library of Munich, Germany.
    3. Joël CARIOLLE, 2011. "L’Indice de vulnérabilité économique rétrospectif - Mise à jour 2010," Working Papers I09, FERDI.

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