5.The economics of sovereignty: «secrets of success» of very small countries126 5.1Economic characteristics of very small countries129 5.1.1Some stylized facts129 5.1.2The predictions of economic theory132 5.2Sources of welfare in VSC137 5.2.1Country size and welfare138 5.2.2Determinants of welfare in VSC144 5.2.2.1Andorra146 5.2.2.2Bahamas146 5.2.2.3Brunei147 5.2.2.4Iceland148 5.2.2.5Liechtenstein149 5.2.2.6Luxembourg150 5.2.2.7Monaco151 5.2.2.8San Marino152 5.2.2.9The common denominator of high-income VSC and common misperceptions revisited152 5.2.2.9.1History and socio-economic factors153 5.2.2.9.2Economic structure and specialization156 5.2.2.9.3Political systems158 5.2.2.9.4Other determinants of welfare159 5.3VSC versus autonomous regions of larger countries160 5.3.1Theoretical expectations161 5.3.2Data and first results162 5.3.3Very small countries versus small autonomous regions163 5.3.4Regional differences165 5.4A summarizing evaluation of law-making authority and sovereignty166 5.4.1Pillars of very small economies167 5.4.2Which kind of sovereignty?171 5.4.3Another economic look at sovereignty172 5.4.4A summary of the «secrets of success» of VSC175 6.A new view on very small countries1779