Being socioeconomically successful is a task in itself. However, being socioeconomically successful as a Small State seems to be a more difficult task. If you look at the gross domestic product per capita you might not find a correlation between a low GDP per capita and the smallness of a state. If you take a look at the GDP in absolute numbers you will find a correlation. GDP figures often cover up economic troubles which Small States experience. The problem consists in the higher vulnerability of Small States, in general and economic terms. Briguglio has pointed out how smallness hampers economic growth and/or makes it dependant on others.
To give some examples: Small Economies depend on imports from foreign markets because their smallness prohibits the production of any goods beyond agriculture necessities. To benefit from the human productivity rise Small (Island) States often import more than they can export. As a result of that foreign investors are needed to survive the trade deficit in the long run. Moreover, Economies of Scale is not possible and the fix costs are relatively high.
If the Small State is an island, remoteness makes the situation even more difficult. Large stocks are necessary and the per-unit transport costs are enormous. Especially Small Islands States are dependant on external markets and external financing if they want a living standard that is near to the average living standard of the world. The literature has mainly pointed out three strategies for tackling vulnerability as a Small Island State: The MIRAB Model, the SITE Model, the PROFIT Model. In particular Bertram and McElroy have put a lot of work into analysing and classifying these concepts. They mainly focussed on small island economies in the Caribic and in Oceania. That leads to the question how small states on dry land tackle their socioeconomic vulnerability. In the investigation of this question here, tha main interest lies on Europe because Europe includes Small States on the continental mainland. A look is taken into the vulnerability index of Briguglio from 1985. Antigua & Barbuda appear first as the most vulnerable state. The following ranks are dominated by caribic and oceanic islands. On rank 16 Malta shows up as the first European country. The next European nations to follow are Cyprus on rank 26 and then Portugal on rank 55.
Table of Contents
- 1. Introduction
- 2. My Cluster of European States
- 3. Classification of Economic Models
- a) MIRAB Economy
- b) SITE Model/ PROFIT Model
- 4. MIRAB and PROFIT in European Small States
- a) Andorra
- b) San Marino
- c) Monaco
- d) Liechtenstein
- e) Malta
- 5. Conclusion
Objectives and Key Themes
This paper investigates the socioeconomic vulnerabilities of small European states and analyzes the economic strategies they employ to overcome these challenges. The study focuses on whether the MIRAB, SITE, and PROFIT models, commonly used by small island states, are also applicable to small landlocked European states. The research compares and contrasts the economic situations of several European microstates, ultimately seeking to understand the unique economic challenges and solutions specific to this group.
- Socioeconomic vulnerability of small states
- Application of MIRAB, SITE, and PROFIT models in European microstates
- Comparison of economic strategies among selected European microstates
- Defining and classifying small states based on economic indicators
- Analysis of the impact of geographical factors on economic development
Chapter Summaries
1. Introduction: This introductory chapter establishes the central research question: how do small European landlocked states address their socioeconomic vulnerabilities? It highlights the inherent challenges faced by small states, particularly their economic dependence and vulnerability due to limited resources and economies of scale. The chapter introduces the MIRAB, SITE, and PROFIT models as key strategies employed by small island developing states, prompting the investigation into their relevance for mainland European microstates. The author uses existing literature to contextualize the problem, citing studies which emphasize the higher vulnerability of small states and the economic dependencies that arise from their size and limited production capabilities. A vulnerability index is referenced, demonstrating that European states are less prominently featured in the high-vulnerability rankings compared to island nations, raising questions about the unique characteristics and strategies of mainland microstates.
2. My Cluster of European States: This chapter focuses on defining and selecting a suitable group of European microstates for analysis. The author critiques existing definitions of "small state," pointing out inconsistencies and lack of consensus in the literature. Rather than relying solely on population size, the author opts for a land area-based definition (under 5,000 km²), justifying this choice by its alignment with previous studies and its suitability for comparing with small island states. This selection criteria eliminates some initially considered states (Iceland, Estonia, Cyprus, and Luxembourg) leaving a more homogeneous group for detailed economic examination in subsequent chapters. The chapter emphasizes that land area is considered a more stable and less changeable characteristic than population size in the context of geographically defined states.
Keywords
Small states, microstates, economic vulnerability, MIRAB model, SITE model, PROFIT model, socioeconomic development, European microstates, economic strategies, landlocked states, GDP, vulnerability index, economies of scale, import dependence.
FAQ: A Comprehensive Language Preview of European Microstate Economies
What is the main research question of this paper?
The central research question is: How do small European landlocked states address their socioeconomic vulnerabilities?
What economic models are analyzed in this paper?
The paper investigates the applicability of the MIRAB, SITE, and PROFIT models, commonly used for small island states, to small landlocked European states. It analyzes whether these models accurately reflect the economic strategies employed by these microstates.
Which European microstates are included in the study?
The specific microstates analyzed are Andorra, San Marino, Monaco, Liechtenstein, and Malta. The selection was based on a land area definition (under 5,000 km²), excluding initially considered states like Iceland, Estonia, Cyprus, and Luxembourg.
What are the key themes explored in this research?
Key themes include the socioeconomic vulnerability of small states, the application of specific economic models (MIRAB, SITE, PROFIT) in European microstates, a comparison of economic strategies among selected microstates, the classification of small states based on economic indicators, and the impact of geographical factors on economic development.
How are "small states" defined in this study?
The author critiques existing definitions, arguing against solely relying on population size. Instead, the study uses a land area-based definition (under 5,000 km²) to ensure a more homogeneous group for comparison and to better align with studies on small island states. This choice is justified by the stability of land area as a characteristic compared to population size.
What are the chapter summaries?
Chapter 1 (Introduction) sets the research question and context, highlighting the challenges faced by small states and introducing the economic models. Chapter 2 (My Cluster of European States) defines and justifies the selection of microstates for analysis, focusing on a land area-based definition. Further chapters (not fully summarized) delve into the application of the economic models to the selected microstates and draw conclusions.
What are the key socioeconomic vulnerabilities of small states addressed in this paper?
The paper addresses the economic dependence and vulnerability of small states stemming from limited resources and economies of scale. The inherent challenges of small size and limited production capabilities are central to understanding their economic situations.
What are the keywords associated with this research?
Keywords include: Small states, microstates, economic vulnerability, MIRAB model, SITE model, PROFIT model, socioeconomic development, European microstates, economic strategies, landlocked states, GDP, vulnerability index, economies of scale, import dependence.
What is the overall objective of the paper?
The paper aims to investigate the socioeconomic vulnerabilities of small European states and analyze their economic strategies. It seeks to understand the unique economic challenges and solutions specific to this group of landlocked microstates.
- Arbeit zitieren
- Nils Rieckmann (Autor:in), 2017, Micro States Economics. The MIRAB and SITE/PROFIT Model in European Small States, München, GRIN Verlag, https://www.grin.com/document/376873
