Does Size Really Matter

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Does Size Really Matter?
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Theme

• An exploration of the significance of the
  relationship between scale and governance.
• Does size inhibit small countries from playing
  the regionalization game?

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An Examination of Small States
TuvaluPop. 8,000

• Three areas of interest
• Where do small states fit in a world of
  increasing globalization, regionalization and
  scaling up?
• Is there some relationship between scale and
  governance?
• Are small states Vulnerable?

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Global Trends
Republic of Nauru 7,000

• Everything is pushing for greater scale of
  operation Acquisitions and Mergers
• Is there some optimal size for a country,
  either independently or in partnership?
• Is there some critical mass argument so that
  countries below a certain size cannot cope with
  the duties of statehood in the modern world?
• What should we do about it?

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Small is Beautiful.
Vatican City State 1 Square Mile.

• Yes, but is it manageable?
• Anyway, what is small?
• Not a question of area, but of population.
• A frequently-used figure is lt 1 million
• Which would give us more than 50 members of the
  UN.
• Some are rich (Qatar) some are poor (Kiribati)

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Saint Vincent and the Grenadines 117,193 Saint
Lucia 164,213 Samoa 177,714 Sao Tome and Principe
181,565 Vanuatu 202,609 Western Sahara
267,405 Belize 272,945 Maldives 339,330 Brunei
365,251 Malta 396,851 Cape Verde 415,294 Suriname
436,935 Luxembourg 462,690 Djibouti
466,900 Equatorial Guinea 523,051 Solomon Islands
523,617 Comoros 651,901 Bahrain 677,886 Guyana
705,803 Cyprus 775,927 Qatar 840,290 Fiji 880
874 HALF THE SIZE OF INDIANAPOLIS
country and 2004-07-01 estimated population. Holy
See (Vatican City) 921 Tokelau 1,405 Tuvalu
11,468 Nauru 12,809 Palau 20,016 Cook Islands
21,200 San Marino 28,503 Monaco
32,270 Liechtenstein 33,436 Saint Kitts and Nevis
38,836 Marshall Islands 57,738 Antigua and
Barbuda 68,320 Dominica 69,278 Andorra
69,865 Aruba 71,218 Man, Isle of 74,655 Northern
Mariana Islands 78,252 Seychelles80,832 Grenada89,
357 Kiribati 100,798 Micronesia, Federated States
of 108,155 Tonga 110,237 ABOUT THE SIZE OF
BLOOMINGTON
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The Threshold Argument
Parliament Building, Tuvalu

• Is size linear, or quantum?
• That is, should a small country simply, in terms
  of governance, be a small version of a big
  country?
• Or does the Weberian model stop working at some
  critical mass?
• Economically there is no difference, except that
  small countries have much more Open
  Economiesi.e. are much more trade dependent

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Typical (not proven) Attributes of Small States

• Very vulnerable to vicissitudes in world trade
  because of their open nature
• Remoteness from major arteries of commerce
• Limited domestic resource/market base
• High levels of emigration

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The Critical Mass Argument

• How can you have a career structured,
  professional public service, when the total c.s.
  may be tiny?
• How do you prevent personalizing the civil
  service? I.e. you cannot make a decision as a
  post-holder on a professional basis, because
  everybody knows that the decision-maker is you.

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The Critical Mass Argument

• Does this mean that we should think of small
  countries more in terms of local government?
• No. Because local governments do not have the
  competencies of sovereignty (printing money,
  trading in arms, conducting relations with other
  countries on an equal basis). There is an
  intimate relationship between state and society

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Another Characteristic

• About two-thirds of the small countries are also
  developing countries with capital constraints of
  poverty as well as smallness
• So, resources may be small in two senses in
  total and per capita

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Consequences of Smallness

• Cannot have any leverage in world trade
• Small pool of skilled people
• Heavy burden of cost of sovereignty spread over
  few people
• Skilled local people are saleable anywhere, and
  probably for a higher salaryexacerbated by the
  UNs quota system.
• Little countervailing power with companies
  negotiating terms

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Vulnerabilities

• They have, as their most valuable asset,
  sovereignty, which is worth a lot of money to a
  lot of shady people
• For instance the limited ability to provide
  oversight for bank scams, money laundering, arms
  deals, drug operations, illicit financial
  transfers.
• The influence of bribery

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Small is Dangerous

• Small countries can initiate BIG problems
• Grenada
• Kuwait
• Solomon Islands
• The Falkland Islands (though this is not strictly
  a country)

From CIA comic Dropped over Grenada
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Big Neighbors

• It is very difficult to consider small states in
  isolation, as they are usually in the orbit of
  large neighbors.

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These are some of the very small countries
The Caribbean and Central America
The South Pacific
Africa
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Vulnerability

• Open economy may make these countries
  particularly susceptible to changes in the world
  economy.
• Their weak oversight capacity makes them targets
  for money laundering, banking scams, drug
  smuggling and arms transfers. This brings them
  into conflict with their neighbors.

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VULNERABILITY

• Small capital base makes them dependent on
  international aid and banking for their capital
  budget (often through aid)
• Thus, it is difficult to organize their own
  capital-development priorities because the WB and
  bilateral donors overwhelm them.
• Problem of overhead costs on small projects.

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Vulnerability (2)

• The personalization of responsibility may make it
  easier to corrupt individuals, and there are few
  checks on those doing the oversight.
• There are even attempts to take over these
  countries completely, e.g. Equatorial Guinea and
  the Comoro Islands.

All about oil.
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Responses

• Collective action among small states
• The South Pacific Forum, or the University of the
  South Pacific
• Caricad, Caricom, and other common services
  organizations of the Caribbean (inc. Belize and
  Guyana.)

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Options

• World Bank tells them that they need to find
  their niche economies, but what are the options
  beyond tourism?
• Mainly the gray area operations, like
  undisclosed banking, which makes the drug trade
  possible.

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How it works

• Then they are brought in quietly to the USoften
  a distance of only 90 miles

• The vast amount of cash collected is taken to the
  banks of C. America and the Caribbean

• They move to the thousands of small islands of
  the Caribbean by boat and light plane

• From here the money, now legitimate can move
  back to the States, or indeed, anywhere

Drugs originate in S. America