An Assessment of Socio-Economic Systems’ Resilience to Economic Shocks: The Case of Lithuanian Regions

Abstract

Various socio-economic systems (countries, regions, or cities) and their economies suffer different kinds of economic shocks. If the system is not resilient, its economy can incur losses. Only the systems whose economies are less vulnerable and/or are able to recover from the economic shock quite quickly are able to ensure economic sustainability, competitiveness, and welfare both now and in the future. The concepts of socio-economic systems’ resilience to economic shocks, vulnerability, and recovery, as well as the resilience assessment peculiarities, are all analyzed in this article. The methodology introduced for the assessment of a socio-economic system’s resilience to economic shocks consists of two parts: a model of a system’s resilience to the economic shock’s capacity-related factors (Resilio) and an index of a socio-economic system’s resilience to the economic shocks (Resindicis). The Resilio model could be used as a universal methodological framework for analyzing the resilience of socio-economic systems of different levels (countries, regions, or cities). The set of quantitative indicators compiling Resindicis should be adjusted to the specifics of each socio-economic system and the availability of statistical data. Empirically, the methodology was validated on the example of 10 Lithuanian regions (counties). The methodological principles for the assessment of a socio-economic system’s resilience are also provided. The main advantages and drawbacks of the methodology are discussed in order for further development and an increase in its practical application.