The incidence of external shocks and of the evolution of the external environment has depended on the type and degree of exposure to external trade and finance, in particular a country's initial position as regards the size and structure of its trade and debt. However, developing countries have not been merely passive victims of exogenous shocks. Their own policies have had a significant influence on the extent to which external factors have affected their economic performance. Countries have also differed in their underlying potential for adjustment owing to differences in the size and diversity of their tradeable goods sectors and the level of income, consumption and investment, as well as the overall size, geographic location, climate, natural resource base and population.