New Estimates of the Economic Independence Index: Is Economic Independence Necessary for Sustaining Economic Growth?

Abstract

Is economic independence necessary for sustaining economic growth? In the past, political—and therefore economic—independence was a prelude to economic growth. With most countries gaining their political independence in the twentieth century, countries’ economic independence was understated assuming its existence with the end of colonialism. Yet economic independence began to be increasingly circumscribed by measures and pressures imposed by the more powerful countries, multinational corporations and international organizations on the less powerful countries. Due to the rising importance of economic independence, the first composite index to quantify it, with its two versions EII-1 and EII-2, was published in 2017 and estimated values for economic independence for some selected countries for the period 2010–2013. This study aims to measure the levels of economic independence for 104 of these selected countries for the period 2014–2019 using the 2017 index, and compare the countries’ scores in the two periods. The Russian Federation topped the two indexes making it without dispute the strongest economically independent country. As economic growth proved to be contingent on real economic independence, countries may need to assess their vulnerability or resilience to external economic shocks through their new scores in the EII in order to sustain economic growth. © 2022, Journal of Economic Issues / Association for Evolutionary Economics.