bad governance, which are at least as responsible for the outcome as the natural ones.125 Our results change when we exclude East Asian and Pacific VSC and SAR, but the difference between VSC and SAR is again insignificant. Now 20 out of 31 VSC and SAR beat regional average GDP per capita figures. The disaggregated results are: ten versus seven for VSC and ten versus four for SAR. We can conclude that – excluding East Asia and the Pacific region – VSC and SAR tend to have higher GDP per capita than the regional average figures, where SAR seem to fare even a little bit better than VSC. Finally note that the results remain qualitatively un- changed if VSC and SAR are compared to adjacent countries instead of regional averages (see Armstrong et al., 1998). We do not go into the de- tails of the relevant findings, because they seem to be based on much more arbitrary decisions than in the European 
case.126 5.4 A summarizing evaluation of law-making authority and sovereignty The previous sections allow several interesting conclusions with regard to the economic effects of law-making authority and sovereignty. It has to be borne in mind that our results are not only relevant for VSC and SAR. The issue of giving up sovereignty combined with deeper integra- tion, especially in Europe, but to a lesser extent also in Asia and America, is also an important one for larger countries. When the divi sion of tasks between different levels of decision-making and law-making in Europe is discussed, one implicitly dwells upon the subject of national 166 
The economics of sovereignty: «secrets of success» of very small countries 125See World Bank (1998) for a comprehensive study on the problems of Pacific VSC and possible therapies. 126Armstrong et al. (1998) perform a discriminant analysis similar to that of Armstrong and Read (1995), but the results are – not surprisingly – analogous. The existence of natural resources, a financial service sector and a tourism industry are strongly as- sociated with high welfare. A large agricultural sector is negatively related to wel fare. It is somewhat astonishing that they do not find support for the hypothesis that there are welfare differences between islands and non-islands VSC and SAR. Contrary to that, the results of this study suggest a disadvantage for island VSC and SAR, sometimes called «islandness», especially when they are remote, which is by the way in line with other empirical studies and theoretical expectations on the issue.