Volltext: Very small countries: economic success against all odds

«effective size».10The private and social costs of a highly fragmented settlement structure are worth considering. Actually, problems of re - gion al distribution would need to be considered independent of consi- derations concerning area as a proxy for country size. Still, they are no less a problem for large countries, so they are not comprehensively analy zed here. One should, however, bear in mind that issues concerning the regional distribution of population are of the utmost importance for some small, remote island economies, especially for island groups or ar- chipelagos (e.g., Kiribati), since they doubtlessly raise transaction costs and costs in connection with the provision of public goods. Fourth, and closely related to the former, the «effective size» is de- pendent on the geographic status of a small country. E.g., Andorra, Monaco or San Marino may almost be viewed as a region of larger coun- tries, namely Spain, France or Italy, with special autonomy rights. The judgment from an economic viewpoint would certainly support this notion. In contrast, Iceland does not exhibit characteristics which are normally ascribed to a region. Generally, small landlocked countries are much more often and more intensely involved in cooperation with re - gions of adjacent larger countries due to lower transaction costs. Analogous to the list of small countries according to the number of inhabitants, the list according to area measures is characterized by an as- tounding diversity of the countries 
listed. 2.1.3 Size and national income National income may also be a proxy for country size because it can, on the one hand, give an impression of the size of a country’s internal mar- ket and, on the other hand, provide a broad-stroke picture of a country’s economic impact. To our mind, it is important to note that it would be insufficient to judge economic impact only by national income, since es- pecially small countries’ economies heavily rely on specialization and, 23 
Traditional concepts of size 10Note that the regional distribution, or the dispersion of the population, is an impor- tant determinant of the public good provision process and of costs. We will refer to it in the empirical parts of this study in greater detail. Interestingly, countries which are generally considered very small differ profoundly with regard to the regional dis- tribution of their population, ranging from city states (e.g., Monaco) to island groups (e.g., Kiribati).


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