Why are Small Countries better?

[Tim Cornelis]

When looking at the income per capita of countries I noticed smaller countries often have a higher income per capita than larger countries in the same region.

Is it really that simplistic that they have to 'share' the GDP among less people and therefore have a higher GDP per capita? That doesn't make much sense to me.

(small countries bold, large countries italics)

"White European" countries:

Liechtenstein, GDP per capita: 141,100
Luxembourg, GDP per capita: 82,600
Jersey (UK Island), GDP per capita: 57,000
Andorra, GDP per capita: 46,700
European Union, GDP p.c.: 32,700

(South) East-Asian countries:

Singapore, GDP per capita: 62,100
Brunei, GDP per capita: 51,600
Hong Kong, GDP per capita: 45,900
Japan, GDP per capita: 34,000

African countries:

Equatorial Guinea, GDP per capita: 36,600
Mauritius, GDP per capita: 14,000
South Africa, GDP per capita: 10,700
(an "average" African country like) Cameroon, GDP per capita: 2,300

"Afro-Caribbean" countries:

Bermuda, GDP per capita: 69,900
The Bahamas, GDP per capita: 28,700
Aruba, GDP per capita: 21,800
Barbados, GDP per capita: 21,800
Trinidad, GDP p.c.: 21,200
Dominica, GDP per capita: 10,400
Haiti, GDP per capita: 1,200

Why are small countries often comparatively and relatively better off?

[Commissar Rykov]

Yeah but the economic disparity is extremely high in a lot of those countries like Singapore and Hong Kong have some rather horrific ghettos they force the poor into. The Afro-Caribbean tends to be extremely poor overall with a few rich white holdouts from the colonial era or who bought their way onto the islands.

[tir1944]

Eh,Compare Swaziland with South Africa,Burundi with Kenya,Yemen with S.Arabia or Kosovo with Slovenia...

[Tim Cornelis]

I wonder whether that is actually significant.

There is not much statistics in inequality in many of these small countries, but if we compare Haiti to Trinidad and Tobago we see:

Gini coefficient as a percentage (0=absolute equality, 100=absolute inequality):
Trinidad: 38.9
Haiti: 59.5

Trinidad has as much social inequality as Portugal (38,5).

If there are rich white people causing the high GDP one would expected a much higher gini coefficient%. We find the opposite of what we would expect if you are right: Haiti should have a lower % and Trinidad a higher.


Eh,Compare Swaziland with South Africa,Burundi with Kenya,Yemen with S.Arabia or Kosovo with Slovenia...

I'm not saying all smaller countries are always better, I'm saying smaller countries are often relatively and comparatively better--they are overrepresented at the top of the "income chain".

Also, I wouldn't call Yemen (pop. 22,000,000) small in comparison to Saudi Arabia (27,000,000). Kosovo is only recently independent, so whatever benefit small countries have (if any) on the global scene is not yet relevant. Burundi (8 mil, pop.) isn't small either.

[thefinalmarch]

You forgot The Principality of Sealand (http://en.wikipedia.org/wiki/Sealand)

[El Louton]

Tax Evasion in some cases.

[Vladimir Innit Lenin]

This is a correlation, and a weak one at that, as there are plenty of larger countries with higher per capita income than a lot of smaller countries. Do not confuse a (weak!) correlation for causation.

I don't think one can say that the size of a country determines its economic development.

What can be said (and, funnily enough, I realised this whilst looking at a map today!) is that many smaller countries are found in Europe, whereas the Americas (if you look at Canada, USA, Brazil), Asia (with China, Russia, Kazakhstan, Mongolia, India etc.) and Australasia (and even Africa has a lot of medium-large countries) often contain some huge countries.

So yeah, Europe (due to many factors including colonialism, technology and geography, amongst others) has developed faster than any other continent since anywhere between 15th-19th century (see the Great Divergence debate, fascinating!) and it contains a lot of smaller countries. As far as i'm aware, there's not too much more to it than that, in terms of any causal link between the geographical size of a country and its income per capita.

[Per Levy]

Liechtenstein, GDP per capita: 141,100
Luxembourg, GDP per capita: 82,600
Jersey (UK Island), GDP per capita: 57,000
Andorra, GDP per capita: 46,700

arnt these the countries where many many rich people live? i mean lichtenstein is kinda famous for being a tax paradise and many rich people park "their" money there.

[MustCrushCapitalism]

Tax Evasion in some cases.
What I was thinking. Mostly full of rich folk who come there solely because they're too greedy to pay taxes on their gigantic fortunes.

[Tablo]

A lot of those are major financial/trade centers where rich people live.