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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