Volltext: Very small countries: economic success against all odds

which are simply not provided or which are internationally sourced out in VSC. It is even more puzzling that especially the non-provision op - tion does not seem to reduce happiness or welfare in VSC, although hard facts or comparable data on this issue are very scarce. Although interna- tional outsourcing has been largely neglected in economics, it doubtless - ly plays an important role for VSC. Note that the economics of interna- tional outsourcing is intimately related with the economics of integra - tion, but the point of view is different, since the economics of integra - tion focuses on the private sector and generally deals with countries of equal size. On the contrary, the concept of international outsourcing in this chapter concentrates on the public sector and analyzes the possibil - ities and constraints of international outsourcing from a VSC to one or more larger (adjacent) countries. Based on the selection of public goods with (very) high economies of scale in Table 4.3, Section 4.3 investigates the organizational choice of the 21 VSC for those publicly provided goods for which data were avail - able for all countries. Table 4.12 presents the results of the case studies at a glance. Note that for every group of publicly provided goods in Table 4.3 we have at least one empirical example in Table 4.12. Seven public goods could not be analyzed due to lack of data, but there is no sign that the results for them would not comply with the overall picture in Table 4.12.94 One can conclude that international outsourcing in VSC is wide- spread. It is also an organizational option for publicly provided goods with a high emotional value for a country’s citizens, like having an own currency or running a full university. Note that it seems that VSC citi- zens do not perceive those public goods, which are generally ascribed a high emotional value, as indispensable. Infrastructure is highly depen- dent on geographic circumstance, which makes it less useful for an ana - l y sis of organizational choice. One can however easily discern from the analysis that VSC try to avoid costs associated with expensive infra- structure whenever possible. International outsourcing approaches its constraints when the security of the VSC is at stake. More VSC than ex- pected maintain their own army, although many of these armies are not 121 
The extent and structure of international outsourcing 94These «missing» publicly provided goods are namely: courts and judicial branch, le- gal system, secondary education, hospitals, social security, highways, tax levy.
	        

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