Open and Nimble : Finding Stable Growth in Small Economies, Summary
Does economic size matter for economic development outcomes? If so are current policies adequately addressing the role of size in the development process? Using working age population as a proxy for country size, Open and Nimble, systematically analyzes what makes small economies unique. Small eco...
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| Format: | Summary |
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World Bank, Washington, DC
2017
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| Online Access: | https://documents.worldbank.org/en/publication/documents-reports/documentdetail/479291490112172343/open-and-nimble-finding-stable-growth-in-small-economies-summary http://hdl.handle.net/10986/26304 |
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okr-10986-263042021-05-25T08:58:54Z Open and Nimble : Finding Stable Growth in Small Economies, Summary Lederman, Daniel Lesniak, Justin T. ECONOMIC GROWTH SMALL ECONOMIES ECONOMIC SIZE TRADE INVESTMENT FISCAL MANAGEMENT SAVINGS SMALL STATES ISLAND STATES NATURAL DISASTERS REMITTANCES VOLATILITY REGIONAL INTEGRATION FOREIGN DIRECT INVESTMENT FDI Does economic size matter for economic development outcomes? If so are current policies adequately addressing the role of size in the development process? Using working age population as a proxy for country size, Open and Nimble, systematically analyzes what makes small economies unique. Small economies are not necessarily prone to underdevelopment and in fact can achieve very high income levels. Small economies, however, do tend to be highly open to both international trade and foreign direct investment, have highly specialized export structures, and have large government expenditures relative to their Gross Domestic Product. The export structures of small economies are concentrated in a few products or services and in a small number of export destinations. In turn, this export concentration is associated with terms of trade volatility, which combined with high exposure to international trade, implies that small economies tend to face more volatility on average as external volatility permeates national economic life. Yet small economies tend to compensate for their export concentration by being nimble in the sense of being able to change their production and export structure relatively quickly over time. Moreover, limited territory plays a role in shaping how economies are affected by natural disasters, even when the probability of facing such disasters is not necessarily higher among small than among large economies. The combination of large governments with macroeconomic volatility seems to be associated with low national savings rates in small economies. This combination could be a challenge for long-term growth if productivity growth and foreign investment do not compensate for low domestic savings. The book finishes with some thoughts on how policy makers can respond to these issues through coordinated investments and regional integration efforts, as well as fiscal policy reforms aimed at both increasing public savings and conducting countercyclical fiscal policies. 2017-03-27T17:41:18Z 2017-03-27T17:41:18Z 2017-03-30 Summary https://documents.worldbank.org/en/publication/documents-reports/documentdetail/479291490112172343/open-and-nimble-finding-stable-growth-in-small-economies-summary http://hdl.handle.net/10986/26304 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Publication |
| repository_type |
Digital Repository |
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Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English en_US |
| topic |
ECONOMIC GROWTH SMALL ECONOMIES ECONOMIC SIZE TRADE INVESTMENT FISCAL MANAGEMENT SAVINGS SMALL STATES ISLAND STATES NATURAL DISASTERS REMITTANCES VOLATILITY REGIONAL INTEGRATION FOREIGN DIRECT INVESTMENT FDI |
| spellingShingle |
ECONOMIC GROWTH SMALL ECONOMIES ECONOMIC SIZE TRADE INVESTMENT FISCAL MANAGEMENT SAVINGS SMALL STATES ISLAND STATES NATURAL DISASTERS REMITTANCES VOLATILITY REGIONAL INTEGRATION FOREIGN DIRECT INVESTMENT FDI Lederman, Daniel Lesniak, Justin T. Open and Nimble : Finding Stable Growth in Small Economies, Summary |
| description |
Does economic size matter for economic development outcomes? If so are current policies adequately addressing the role of size in the development process? Using working age population as a proxy for country size, Open and Nimble, systematically analyzes what makes small economies unique.
Small economies are not necessarily prone to underdevelopment and in fact can achieve very high income levels. Small economies, however, do tend to be highly open to both international trade and foreign direct investment, have highly specialized export structures, and have large government expenditures relative to their Gross Domestic Product.
The export structures of small economies are concentrated in a few products or services and in a small number of export destinations. In turn, this export concentration is associated with terms of trade volatility, which combined with high exposure to international trade, implies that small economies tend to face more volatility on average as external volatility permeates national economic life. Yet small economies tend to compensate for their export concentration by being nimble in the sense of being able to change their production and export structure relatively quickly over time.
Moreover, limited territory plays a role in shaping how economies are affected by natural disasters, even when the probability of facing such disasters is not necessarily higher among small than among large economies. The combination of large governments with macroeconomic volatility seems to be associated with low national savings rates in small economies. This combination could be a challenge for long-term growth if productivity growth and foreign investment do not compensate for low domestic savings.
The book finishes with some thoughts on how policy makers can respond to these issues through coordinated investments and regional integration efforts, as well as fiscal policy reforms aimed at both increasing public savings and conducting countercyclical fiscal policies. |
| format |
Summary |
| author |
Lederman, Daniel Lesniak, Justin T. |
| author_facet |
Lederman, Daniel Lesniak, Justin T. |
| author_sort |
Lederman, Daniel |
| title |
Open and Nimble : Finding Stable Growth in Small Economies, Summary |
| title_short |
Open and Nimble : Finding Stable Growth in Small Economies, Summary |
| title_full |
Open and Nimble : Finding Stable Growth in Small Economies, Summary |
| title_fullStr |
Open and Nimble : Finding Stable Growth in Small Economies, Summary |
| title_full_unstemmed |
Open and Nimble : Finding Stable Growth in Small Economies, Summary |
| title_sort |
open and nimble : finding stable growth in small economies, summary |
| publisher |
World Bank, Washington, DC |
| publishDate |
2017 |
| url |
https://documents.worldbank.org/en/publication/documents-reports/documentdetail/479291490112172343/open-and-nimble-finding-stable-growth-in-small-economies-summary http://hdl.handle.net/10986/26304 |
| _version_ |
1764461648184082432 |