This study presents a detailed literature review on economic vulnerability and resilience with a focus on small states. It also proposes a revised vulnerability/resilience framework, building on the work of Lino Briguglio et al. (2009), who defined vulnerability in terms of inherent features which render countries exposed to external shocks, and resilience in terms of policy-induced measures that enable countries to minimise or withstand the harmful effect of such shocks. The juxtaposition of vulnerability and resilience, as measured by the vulnerability and resilience indices, would indicate the overall risk of an economy being harmed by external shocks. The major implication of the vulnerability/ resilience framework is that small states can succeed economically in spite of their economic vulnerability if they adopt policies conducive to good economic, social, political and environmental governance.