Growth and Resilience Dialogue 15/02/2018

The need for appropriate institutions

• It is being emphasised here that resilience building requires appropriate policy frameworks which in their totality are conducive to good economic governance. • In turn, suitable policy frameworks require institutional set-ups, which in small states, involve considerable expertise and high overhead costs, and therefore likely to be highly costly per capita for SIDS. This is due to the fact that overhead costs are not normally downscaled in proportion to the population (the so called indivisibility problem) • Many small island developing states are middle-income or high- income countries, leading to their exclusion from concessionary financing, even though the remain highly exposed to external shocks and experiencing, as a result, a high degree of growth volatility.

8. Implications of the V&R framework and Concluding remarks