Volltext: Very small countries: economic success against all odds

–(b) The set of public goods provided by the VSC is comparable to the set of public goods provided by other sovereign countries. Feature (b) assures that we only deal with jurisdictions which pro- vide a broad set of public goods.25Note that this feature does not require that a certain share of the provided public goods be produ- ced in-house. There are of course differences in the perception of what the core of a country’s activity and the minimum requirement in terms of publicly provided goods of a sovereign country are. These differences are partly due to distinct ideological and histori- cal backgrounds of continental European countries on the one hand and Anglo-Saxon countries on the other hand. However, it is easy to list a few goods which are provided by any federal government. Note that we again do not say anything about the provision arran- gement, especially whether those few goods should be provided in- house or whether their production should be sourced out either to other jurisdictions (internal or foreign) or to private enterprises. A country’s government is supposed to at least guarantee their provi- sion. The following list of important public goods, though probably not exhaustive, would be widely agreed upon: internal security, external security, an executive branch (government and administration), a le- gislative branch (some kind of parliament), a judicial system (courts and prisons), international representation, financial and monetary systems, education, a health system, a system of social security as well as infrastructure building and maintenance. –(c) A considerable part of the publicly provided goods 
exhibit dis economies of scalein their production if they are produced in- house. The definition power of this feature is contingent on the results in the following chapter. A country is theoretically expected to exhibit diseconomies of scale in the production of many publicly provided goods in order to be labeled a VSC. In other words, a VSC should not be able to reach optimal scales of production for most (or all) of the above-mentioned public goods and/or the deviation from the 33 
Applied definition of country smallness 25Note that we only require the goods to be provided, not to be produced in-house.


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