Political Survival and Economic Development in Microstates: The Cases of Liechtenstein, the Cook Islands and Niue

Abstract

The 21st century international system contains many small polities of varying degrees of self-governance, ranging from fully sovereign states to mere autonomies or special administrative regions. Their existence provokes scholarly debates on both the effects of smallness on domestic institutions and the role of diminutive units in an international system dominated by large powers. In particular, it raises the question of the meaning of sovereignty, statehood and politico-economic viability in the face of serious geographic and demographic challenges. In this context, one group of tiny states appears as especially intriguing. Due to the constraints imposed by their smallness, these states function in close relationships with at least one larger state acting as a benign protector of their political and economic viability. The existence of such peculiar arrangements, together with these states’ minuscule size and relative obscurity has led to some confusion regarding their political status and place within the international system. Much of the puzzlement owes to the fact that such polities have rarely, if ever, been studied together as a separate analytical category within the broader scholarship of small states and territories. This thesis seeks to explore and analyse these unique polities and offer some insights into the determinants of their political survival and economic development. It begins by offering a novel, but historically justified, conceptual approach to defining and identifying them. While most of the literature uses the term “microstate” to describe some of the smallest political units in the international system, this label tends to be used in an inconsistent and weakly justified manner. In many cases, the efforts to identify microstates and distinguish them from other types of states are limited to suggesting arbitrary and inconsistent quantitative cut-off points applied to collections of polities often representing an entire spectrum of political statuses. As an alternative to this problematic approach, this thesis argues that microstates can credibly be conceptualised as modern protected states, i.e. sovereign states that have been able unilaterally to delegate some of the attributes of their sovereignty to larger powers in exchange for benign protection so as better to manage their geographic and demographic constraints. The combination of quantitative conditions along with the phenomenon of benign protection is what truly differentiates microstates from both small and other states. Seen from this perspective, micro-statehood indicates not just small size but also deeper and more complex political consequences. In its quest to understand how certain states succeed in becoming protected states and how they manage to maximise the political and economic benefits offered by their arrangements with larger powers, this thesis proposes a theoretical framework aimed at explaining both the process behind the formation and the continuous existence of benign protection and the different ways in which the relationship can be managed for the purpose of political and economic gain. This thesis studies three examples of microstates: Liechtenstein, the Cook Islands, and to a lesser extent, Niue. By analysing their respective histories of interactions with larger powers, it explores empirically the dynamics of micro-statehood and benign protection. The central argument of this thesis is that small size and lack of geopolitical importance are not necessarily handicaps but can be positive factors permitting, given favourable historical circumstances, certain political units to secure and sustain unusually advantageous arrangements with larger powers., The thesis also offers a number of insights into the effects of geographic and demographic constraints on the politico-economic well-being of some of the world’s smallest political units.