On The Economic Vulnerability Of Low Income Countries révisé, cf 2000.16
This paper examines the relevance of the economic vulnerability concept for low income countries, a topic of recent concern in several international bodies. It first considers some conceptual clarifications and a method to build an internationally comparable indicator. Three factors of vulnerability are distinguished: shocks, exposure and resilience or capacity to react (the first two ones being more structural, the third one more related to policy). To measure the two main kinds of shocks (natural and external), proposed proxies are respectively the instability of agricultural production and the instability of the purchasing power of exports, while the (smallness of) the population size can be used as a proxy for (structural) exposure. To aggregate the various possible indicators in a composite index of (structural) economic vulnerability, weights can be drawn from their estimated impact on growth. Then selected issues related to the impact of vulnerability on growth are considered: "primary" instabilities (climate, terms of trade, political troubles) are found to slow growth, more by their effect on the total factor productivity growth than on the rate of investment, to do so through "intermediate" instabilities (of the rate of investment and of the real exchange rate), and in agricultural economies through the impact at the farmer level. Besides its negative effects on growth, vulnerability is assumed to increase aid effectiveness: the more the recipient country is vulnerable the more aid contributes to growth. Implications are drawn for aid allocation and aid design.
|Date of creation:||1999|
|Date of revision:|
|Contact details of provider:|| Postal: 65 Bd. F. Mitterrand, 63000 Clermont-Ferrand|
Phone: (33-4) 73 17 74 00
Fax: (33-4) 73 17 74 28
Web page: http://cerdi.org/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Collier, Paul & Dollar, David, 2002.
"Aid allocation and poverty reduction,"
European Economic Review,
Elsevier, vol. 46(8), pages 1475-1500, September.
- Rodrik, Dani, 1998.
"Where Did all the Growth Go? External Shocks, Social Conflict and Growth Collapses,"
CEPR Discussion Papers
1789, C.E.P.R. Discussion Papers.
- Rodrik, Dani, 1999. "Where Did All the Growth Go? External Shocks, Social Conflict, and Growth Collapses," Journal of Economic Growth, Springer, vol. 4(4), pages 385-412, December.
- Dani Rodrik, 1998. "Where Did All The Growth Go? External Shocks, Social Conflict, and Growth Collapses," NBER Working Papers 6350, National Bureau of Economic Research, Inc.
- Guillaumont, Patrick, 1987. "From export instability effects to international stabilization policies," World Development, Elsevier, vol. 15(5), pages 633-643, May.
- Ghura, Dhaneshwar & Grennes, Thomas J., 1993. "The real exchange rate and macroeconomic performance in Sub-Saharan Africa," Journal of Development Economics, Elsevier, vol. 42(1), pages 155-174, October.
- Guillaumont, Patrick & Guillaumont, Sylviane & Plane, Patrick, 1988. "Participating in African monetary unions: An alternative evaluation," World Development, Elsevier, vol. 16(5), pages 569-576, May.
- Claudio Araujo, 1995. "Les producteurs brésiliens et l'instabilité des prix : Différences de comportement entre le Nord et le Sud," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 43(3), pages 443-461, November.
- Garey Ramey & Valerie A. Ramey, 1994.
"Cross-Country Evidence on the Link Between Volatility and Growth,"
NBER Working Papers
4959, National Bureau of Economic Research, Inc.
- Ramey, Garey & Ramey, Valerie A, 1995. "Cross-Country Evidence on the Link between Volatility and Growth," American Economic Review, American Economic Association, vol. 85(5), pages 1138-51, December.
- Aizenman, Joshua & Marion, Nancy, 1999. "Volatility and Investment: Interpreting Evidence from Developing Countries," Economica, London School of Economics and Political Science, vol. 66(262), pages 157-79, May.
- Lim, David, 1980. "Income Distribution, Export Instability, and Savings Behavior," Economic Development and Cultural Change, University of Chicago Press, vol. 28(2), pages 359-64, January.
- Moran, Cristian, 1983. "Export fluctuations and economic growth : An empirical analysis," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 195-218.
- Serven, Luis, 1997. "Irreversibility, Uncertainty and Private Investment: Analytical Issues and Some Lessons for Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 6(3), pages 229-68, Supplemen.
- David Dollar & Craig Burnside, 2000.
"Aid, Policies, and Growth,"
American Economic Review,
American Economic Association, vol. 90(4), pages 847-868, September.
- Jean-François BRUN & Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY, 1997.
"How Instability Lowers African Growth ?,"
- Collier, Paul & Guillaumont, Patrick & Guillaumont, Sylviane & Gunning, Jan Willem, 1997. "Redesigning conditionality," World Development, Elsevier, vol. 25(9), pages 1399-1407, September.
- Glezakos, Constantine, 1984. "Export Instability and Economic Growth: Reply," Economic Development and Cultural Change, University of Chicago Press, vol. 32(3), pages 615-23, April.
- Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY & Paul COLLIER & Jan Willem GUNNING, 1997. "Rénover le Stabex," Working Papers 199723, CERDI.
- Paul Collier & P. Guillaumont & S. Guillaumont Jeanneney & Jan Willem Gunning, 1999. "Reforming Stabex," The World Economy, Wiley Blackwell, vol. 22(5), pages 669-682, 07.
When requesting a correction, please mention this item's handle: RePEc:cdi:wpaper:115. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vincent Mazenod)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.