Volltext: Very small countries: economic success against all odds

tional organization. The two most important kinds of costs are the fol - lowing: –Ensuring costs:The government of a VSC has to ensure provision even if provision and production is sourced out completely. There are, of course, costs associated with the ensuring of provision, like transaction costs or costs of planning. –In most cases the VSC does not simply get a free ride: there 
are charges.Take, e.g., higher education, where a VSC without a uni- versity normally has to pay for VSC-based students when they attend a public university in a foreign country. In contrast, many VSC get a more or less free ride with regard to defense issues. 86 
Very small countries: organizational choice and international outsourcing Table 4.2: Institutional forms of public good provision Institutional or organizational forms Public GoodVSCFPUBL ESPAESPA Core functions general administration++implausible legislative branch++++implausible executive branch++++implausible courts and judicial branch+++implausible foreign policy++++--- legal 
system++++--- Security police0+implausible fire brigade0+implausible defense+++--- Educational system nursery school (ISCED 0)0++implausible primary education (ISCED 1)0++implausible second. education (ISCED 2/3)+++-- higher education (ISCED 6/7)+++-- ES: costs (economies of scale); PA: preference adequacy. ++ = very high; + = high; 0 = neutral; - = low; -- = very low. VSC: very small country; FPUBL: foreign public agency.


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