Liechtenstein Politische Schriften
Basic problems of small countries anonymous deposits under pressure for reform by great powers, for whom money-laundering for the criminal drug economy is a thorn in the eye. If the justice system is weakly developed (Panama), investigations will sooner or later give up. Students of international development have asked if the solutions and responses to the problems unique to small countries provided by the best and richest of them offer a model of successful growth and development for the newly independent small countries in Eastern Europe and throughout the world. The fact that 1991 was the greatest year for small states (coun­ tries) since 1960, because some fifteen new small states were created, should soon provide data for analysis of this question. We also know that most democratic constitutions and institutions of small states are to some degree modeled on the U. S. constitution. An interesting historical analysis suitable for some Ph. D. dissertation might be the degree to which small state socio­ economic success is correlated with the Swiss and other successful small old country constitutions and that of the United States. An interesting alterna­ tive model might be the relationship of the smaller state constitutions within the United States to those of successful small nation-states and the newly independent ones. As the national borders in Western Europe are increasingly reduced, they are being increasingly newly established in Eastern Europe, Serbia, Croatia, Slovenia, Slovakia and others which have re-emerged as indepen­ dent states. This phenomenon of 1990's Europe has enormous consequen­ ces for the economy of the region and the not-to-be-underestimated conse­ quences for economic growth. In this connection we would recommend reading an excellent little study of economics and geography by Paul Krug- man, professor of economics at MIT. He shows how industrial and urban locations are overwhelmingly a function of transportation costs and econo­ mies of scale attained in mass production. If we apply this kind of economic analysis of geographic relationships and transportation costs to the national fragmentation of Eastern Europe, we can see how, other things being equal (which they are not), raising new state boundaries for the smaller countries of Eastern Europe unavoidably increases transportation costs, reduces economies of scale (particularly for state-owned enterprises in small states), and will strongly influence the loca­ tion of new industries and. communities.- Long-established'industrial and commercial connections - many of them two generations old - are interrup­ ted for many years by the new national boundaries. 23


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