Through membership of the NATO alliance Iceland offers strategic value to the alliance over 
and above any contribution that military forces could provide. The alliance context provided the 
right framework for Iceland to be successful in the asymmetric bargaining process that was the 
Cod Wars*. Military forces would have been of no utility to Iceland in pursuing its interests for a 
greater fishing zone. Indeed possessing military forces at the time of the Cod Wars, in the face 
of British military coercion, may have given cause for the Icelandic government to have used 
them. This would have changed the nature of the dispute into one that was not in Iceland's 
favour. By relying on the international system that valued its sovereignty and utilizing its value 
to the NATO alliance Iceland effectively gained territory at the expense of a major power 
without using military assets or military force. 
With the precedent of the Cold War and the Cod Wars in mind it is perhaps unsurprising that 
Iceland has not felt compelled to develop military forces of its own. The nature of the security 
environment in the far North Atlantic is such that when Russia presents a threat it is in the 
context of broader great power confrontation and as a consequence there is an acceptance on 
the part of NATO to provide materially for the defence of Iceland. When the security 
environment with Russia is benign then there is no threat for Iceland and no requirement for 
forces®. Iceland has used its alliance with NATO to not only provide the assurance of defence 
in the worst case scenario of existential threat but it has also been a valuable tool in advancing 
Icelandic interests in bilateral disputes. 
The Pacific Compact States 
The grand calculus of the Cold War in the North Atlantic provided Iceland with the bargaining 
chips it needed to secure its defence and concurrently pursue its national interest. Outside of 
this high-stakes, high-value arena small states sometimes need to look to a larger patron to 
secure their interests. An example occurs in the Central Pacific where three countries, Palau, 
Micronesia and Marshall Islands have all entered into Compacts of Free Association with the 
United States in order to provide security and a degree of prosperity to their small and fragile 
nations. 
The three Compact states all have a relatively short but complicated colonial past. From the 
mid-16™ century the territory now occupied by the three states was claimed by Spain and ruled 
as the Spanish East Indies, a subsidiary colony of the Spanish Philippines. Spain was defeated 
  
% Steinsson, 270-271. 
% Alison JK Bailes and Kristmundur por Olafsson, Developments in Icelandic Security 
Policy, Icelandic Review of Policy and Administration, (Volume 10, No. 2, 2014), 1-16.