STRUCTURAL ECONOMIC VULNERABILITY AND TOURISM DEPENDENCE: NEW ASSESSMENT FOR SMALL ISLAND DEVELOPING ECONOMIES

This paper aims at checking if Small Island Developing States suffer from higher economic vulnerability resulting from their specificities compared to other developing economies. To this regard, we rely on the Economic Vulnerability Index (EVI) developed by the Committee for Development Policy of the United Nations. We propose two significant changes. First, the link between tourism dependence and vulnerability is introduced through the integration of two additional variables, a "tourism shock" variable, and another variable for "exposure to this shock". Furthermore, we substitute the aggregating traditional method of ad hoc weights by an endogenous weighting system derived from a multi-criteria approach based on the well-known DEA (Data Envelopment Analysis) method. The new values of the EVI for 2011 on a set of developing countries lead us to mix the conventional conclusion largely retained in the literature. Indeed, the tourism variables clearly impact the performance of small island economies negatively. But the magnitude of their structural vulnerability decreases with the introduction of the endogenous weighting system.