Economic vulnerability and resilience of small states

There have been various attempts to derive a single index of countries' macroeconomic vulnerability to exogenous shocks. It is now generally accepted that small developing states on average are particularly vulnerable, as evidenced by their historical volatility of aggregate output. Openness to trade is a key source of this volatility, but it has also contributed to these states' comparatively strong average economic growth. Exposure to natural disasters and external financial flows are other significant potential sources of macroeconomic vulnerability. There are a number of difficulties associated with drawing these variables into a single index, and there seems to be limited scope for employing such an overall index beyond proving that small developing states are generally more vulnerable. Instead, the focus should be on individual characteristics that define a country's vulnerability to particular types of shock. Such an approach will provide information for policy makers and may indicate where small developing states-or regional and international bodies that represent them-could beneficially engage in the international agenda. This may be in initiatives aimed at reducing shockspredominantly focused on the poverty reduction agenda-or reducing global processes that threaten to exacerbate the already high levels of vulnerability.peer-reviewe

Nonuse Values and the Environment: Economic and Ethical Motivations

Nonuse values are a potentially very important, but controversial, aspect of the economic valuation of the environment. Since no use is envisaged by the individual, a degree of altruism appears to be the driving force behind nonuse values. Whilst much of the controversy has focused upon measurement issues associated with the contingent valuation method, this paper concentrates on the underlying motivations, whether ethical or economic, that form the basis for such values. Some fundamental aspects of defining and quantifying economic nonuse values are considered, and possible motives for attributing value to the environment are analysed, making a clear distinction between 'selfish' altruism and 'selfless' altruism. The difference has crucial implications for economic valuation and for assessing individuals' willingness to pay for environmental quality. The concept of Safe Minimum Standards is introduced as a means of supplementing purely economic methodology to incorporate ethical concerns into decision making.nonuse values, self interest, altruism, safe minimum standards

Natural resource accounting

There is as yet no consensus on the most appropriate way to incorporate the degradation of environmental capital into national income accounting procedure. Net product is currently derived by deducting from gross product the depreciation of man-made capital only. Deducting depreciation of natural capital in a similar manner will give a figure for ‘true’ net product that provides a better indicator of that level of current income which is sustainable into the future. The ‘user cost’ and ‘net price’ methods of calculating the value of natural resource depreciation are analysed and assessed. On the basis of this assessment, the net price method is then used to adjust the national accounts of Zimbabwe for depletion of forests, soils and mineral resources, for the period 1980 to 1989. The results suggest that economic depreciation of natural resources represents approximately 2% of annual GDP, although this is regarded as a significant underestimate. The implications for integrating natural resource depletion into policy making, within the current national political climate, are then addressed. Copyright Kluwer Academic Publishers 1996National income accounting, natural resources, environmental degradation, net price method, sustainable income, Zimbabwe,

Lithuania's participation in the reconstruction process of Afghanistan: a case of a small state's engagement in the international arena

Because the international arena is too focused on the interests of big states as structuring international interactions, small states continue to appear merely as objects (versus subjects) in the eyes of a large number of researchers, sometimes unconsciously following the (neo)realist tradition of International Relations (IR). Consequently, small states appear to be devoid of any analytical interest. In fact, such a trend in the field of IR neglects the significance of ever increasing interactions between states. Moreover, these interactions need not reflect incompatible interests of different states. The article argues that the case of the reconstruction process of Afghanistan, implemented by the international community, presents a positive-sum logic. In other words, the efforts of the coalition in the Afghan territory allow the engaged states, be they big or small, to pursue their own interests. The degree of their contributions corresponds to the benefits their engagement might provide. As the analysis of the Lithuanian case demonstrates, a small state need not be a passive object trapped in the interactions of powerful states and can arrange itself in order to proceed with actively pursuing its own foreign policy

Middle powers in the Indo-Pacific: Potential pacifiers guarantying stability in the Indo-Pacific?

The article examines the potential of middle powers’ cooperation to establish communities of practice to reinforce their ability to influence world affairs. Illustrating the argument with three case studies—Australia, Indonesia, and South Korea—we assert that middle powers play key roles in structuring the world order. We test the following hypotheses: (i) middle powers do not look, nor do they need to look to great powers for leadership, and can influence events by forging new regional relationships; (ii) when leadership topples or tensions emerge between great powers, with a potential or nascent leadership vacuum, the initiative to guarantee the status quo (i.e., a liberal order) can be provided by middle powers. While rooted in IR theories, the research mostly builds upon the framework of communities of practice and management theories, linking them to highlight the importance of existing interactions, the opportunity for and advantage of greater cooperation and its potential systemic impact