If size has no effect, then both the sub-optimality and vulnerability theses fall. Alternatively, the negative impact of small size on growth is obscured by other factors, including the poor performance of larger economies. The costs and risks are greater because of the disproportionate exposure of small states to external shocks and their being less able to deal with the impact. Sources of Vulnerability Limited economic policy autonomy. High external dependence and exposure to external economic shocks.
Isolation increases costs and the risk of disruption.
Limited political autonomy and high exposure to external political pressure. The margin of difference in countries' rankings by vulnerability and per capita income is greatest for SIDS and other small states. Further research on vulnerability, particularly by the Commonwealth Secretariat, has concentrated on developing the Index further by including more and better specified variables. Component variables and proxies not always specified correctly - notably openness. Weightings between variables open to dispute.