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The phantom of liberty?: economic growth and the vulnerability of small states

Author

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  • Harvey W. Armstrong

    (Department of Geography, University of Sheffield, Sheffield, UK)

  • Robert Read

    (Department of Economics, University of Lancaster, Lancaster, UK)

Abstract

This paper is concerned with the relationship between economic growth in small states and their vulnerability. A critical argument in much of the literature on small states, particularly small island states, is that their growth performance is greatly constrained by their vulnerability to exogenous shocks because of their size. These shocks include economic, political and environmental factors, which together dampen the long-run growth rate of these economies. The paper makes use of a global small state data set and appropriate quantitative techniques to test the relationship between growth and vulnerability using the results of Briguglio's Vulnerability Index. The results highlight some of the conceptual shortcomings in the analytical literature on small states, particularly islands, as well as suggesting that the Vulnerability Index is mis-specified. Copyright © 2002 John Wiley & Sons, Ltd.

Suggested Citation

  • Harvey W. Armstrong & Robert Read, 2002. "The phantom of liberty?: economic growth and the vulnerability of small states," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(4), pages 435-458.
    • Handle: RePEc:wly:jintdv:v:14:y:2002:i:4:p:435-458
    DOI: 10.1002/jid.886
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    References listed on IDEAS

    as
    1. Harvey W. Armstrong & Robert Read, 1998. "Trade and Growth in Small States: The Impact of Global Trade Liberalisation," The World Economy, Wiley Blackwell, vol. 21(4), pages 563-585, June.
    2. Milner, Chris & Westaway, Tony, 1993. "Country size and the medium-term growth process: Some cross-country evidence," World Development, Elsevier, vol. 21(2), pages 203-211, February.
    3. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    4. S. Kuznets, 1960. "Economic Growth Of Small Nations," International Economic Association Series, in: E. A. G. Robinson (ed.), Economic Consequences of the Size of Nations, chapter 0, pages 14-32, Palgrave Macmillan.
    5. Armstrong, Harvey & Read, Robert, 1995. "Western European micro-states and EU autonomous regions: The advantages of size and sovereignty," World Development, Elsevier, vol. 23(7), pages 1229-1245, July.
    6. Armstrong, H. & De Kervenoael, R. J. & Li, X. & Read, R., 1998. "A comparison of the economic performance of different micro-states, and between micro-states and larger countries," World Development, Elsevier, vol. 26(4), pages 639-656, April.
    7. repec:lan:wpaper:898 is not listed on IDEAS
    8. repec:lan:wpaper:899 is not listed on IDEAS
    9. Harvey W. Armstrong & Robert Read, 2001. "Explaining Differences in the Economic Performance of Micro-States in Africa and Asia," Palgrave Macmillan Books, in: Peter Lawrence & Colin Thirtle (ed.), Africa and Asia in Comparative Economic Perspective, chapter 8, pages 128-157, Palgrave Macmillan.
    10. T. Scitovsky, 1960. "International Trade and Economic Integration as a Means of Over-Coming the Disadvantages of a Small Nation," International Economic Association Series, in: E. A. G. Robinson (ed.), Economic Consequences of the Size of Nations, chapter 0, pages 282-290, Palgrave Macmillan.
    11. Armstrong, H W & Read, R, 2000. "Comparing the Economic Performance of Dependent Territories and Sovereign Microstates," Economic Development and Cultural Change, University of Chicago Press, vol. 48(2), pages 285-306, January.
    12. Chenery, Hollis & Taylor, Lance, 1968. "Development Patterns: Among Countries And Over Time," Center for International Affairs (CIA) Archive 294545, Harvard University, Center for International Affairs.
    13. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
    14. G. Marcy, 1960. "How Far Can Foreign Trade and Customs Agreements Confer Upon Small Nations the Advantages of Large Nations?," International Economic Association Series, in: E. A. G. Robinson (ed.), Economic Consequences of the Size of Nations, chapter 0, pages 265-281, Palgrave Macmillan.
    15. Briguglio, Lino, 1995. "Small island developing states and their economic vulnerabilities," World Development, Elsevier, vol. 23(9), pages 1615-1632, September.
    16. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-251, April.
    17. Ashcroft, Brian K, 1988. "External Takeovers in Scottish Manufacturing: The Effect on Local Linkages and Corporate Functions," Scottish Journal of Political Economy, Scottish Economic Society, vol. 35(2), pages 129-148, May.
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