A Retrospective EVI: Methodological Aspects

The aim of the note is, following the previous work of the Committee for Development Policy (CDP) (United Nations 1999, 2000, 2002, 2003, 2005, 2006) as well as my related papers and my forthcoming book on the Least Developped Countries (LDCs) (Guillaumont, 2004a, 2004b, 2006, 2007a, 2007b), to set up the methodological basis for a retrospective bank of data the Economic Vulnerability Index (EVI) designed by the CDP to be used for the identification of the LDCs. It gives also the opportunity to explain and develop some on going refinements in the calculation of EVI. Such a data bank seems useful to enhance the acceptance, credibility and use of EVI among policy oriented international bodies (institutions, aid agencies, etc.), as well as academic circles. A significant demand for this kind of data is already noticeable. The work includes two parts: a methodological note and a limited use of the methodology to specific periods and options. The first part presents a methodological note for the measurement of a retrospective EVI. It considers how to treat in the same retrospective index different set of indicators, some of them related to only one year (or an average of two or three years), while some others are built from time series. It also examines how to make index component ordinarily calculated on one point of time meaningful and comparable overtime. The second part includes a first tentative estimate of a retrospective EVI covering the three last decades and corresponding to the last definition agreed upon by the CDP in 2005. EVI is calculated every ten years, then every five years over the past three decades, which means the index will be generated at least on six or seven points of time during the period of analysis (1970-2005). Data are made available for each country among LDCs, other low income countries, and lower middle income countries. Relevant averages and medians are presented and commented