Characteristics of CARIFORUM Economies

This chapter describes the structural and institutional characteristics of CARIFORUM economies. The dominant feature is their small size relative to the majority of countries in the world. Small developing economies have certain characteristics,1 such as a high degree of openness, limited diversity in economic activity, export concentration on one to three products, significant dependency on trade taxes, and small size of firms. Some developing countries and least developed countries, in general, may exhibit some of the characteristics listed as defining small developing economies. This has led some to argue that many of the problems attributed to small developing economies are not unique to them or can be addressed by appropriate policy measures and therefore smallness does not differentiate economies.2 However, careful analysis reveals that the characteristics, which small developing economies share with other types of developing countries, differ by degree between the different types of developing countries. What sets small developing economies apart and defines them as a distinct genre of developing country is the combination of characteristics and the degree or extent to which these characteristics predominate.