Liechtenstein Politische Schriften
blishing and maintenance costs (set-up, fixed or sunk costs) is likely to be internationally sourced out to adjacent countries if preference homo- geneity is sufficiently high and natural factors allow outsourcing. This finding is obviously in line with Hypothesis 1 and the theoretical basis of international outsourcing. Railways or railway infrastructure is a very good example of the feasibility of international outsourcing and a possible renunciation of a public good which is not indispensable. VSC, therefore, can choose to source out production and provision or to simply substitute other means of transport for it. As can be seen in Table 4.6, with the notable exception of Luxem - bourg, there is no VSC with a railway network of considerable size. Fourteen of the 21 VSC do not operate railways; hence their public transport systems rely heavily on air transport, water transport and buses. In Antigua and Barbuda, Nauru and St. Kitts and Nevis, railways are more or less exclusively operated for the transport of agricultural pro ducts or mineral resources. Since these businesses are conducted by enter prises which are partly or fully owned by the public, it is difficult to assign them to one of the sectors. We decided to consider them as part of the public sector. The remaining four countries operate railways, but they differ with regard to several characteristics. Luxembourg is, again, an exception due to its size, its political position, its geographic location in the center of Europe, and its integration in international railway networks. Liechten - stein is another exception, because the principality has a railway network of importance, but the network is owned, established and maintained by the Austrian Federal Railway. This is a very interesting arrangement, since economies of scale disadvantages are ruled out. We therefore count Liechtenstein’s railway system as another prime example of meaningful international outsourcing. Monaco operates a very short railway, which we nevertheless classify as not in line with our theoretical expectation, and Brunei operates a private line, which is not counted as part of the pub lic sector. Sixteen out of 21 VSC comply with theoretical expecta - tions, which is, again, a significant result. Finally note that it is rather ob- vious that a railway seems to be an inappropriate means of public trans- port for small island economies, since no island VSC operates one. 100 
Very small countries: organizational choice and international outsourcing


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