Posted by: J Starling | September 7, 2009

Open Mike – Micro-states

Below is a piece submitted by ‘Pied Piper’ for discussion.

Dear Bermuda Jewel – Here is an interesting article about Greenland looking forward to independence. There are a lot of similarities with Bermuda. Interestingly this article has been used in discussion about the Turks & Caicos Islands. Bermuda is the Classic Farrugia state.

Are there enough people in Greenland(Bermuda) for a whole country?

Greenlanders have been pressing for more autonomy from Denmark, and looking forward to independence. Anne Sibert asks, “Undersized: Could Greenland be the new Iceland? Should it be? ”

Greenland has 60,000 people, is that enough for a nation-state?

She points out that:
– there is little to suggest that small countries grow faster than larger ones.
– small country output fluctuates more than larger country output – their production is simply less diversified.
– small country consumption fluctuates more than that in larger countries
– public goods have an important fixed cost component – so the per capita cost of public services will be higher for a small country.
– “…it is also likely that the per capita administrative cost of income taxes is decreasing in country size. As a result, smaller countries tend to rely less on relatively efficient income taxation and more on relatively inefficient taxes, such as customs taxes.”
– “…a lack of competition in the provision of non-traded goods in small countries can lead to inefficiency.”
– it’s not clear there be enough qualified and talented people to staff of the agencies of a modern state
– “…Farrugia (1993) suggests that very small countries may also suffer because of their high degree of interpersonal relations… Farrugia comments that, “Many necessary decisions and actions can be modified, adjusted and sometimes totally neutralised by personal interventions and community pressures. In extreme cases, close personal and family connections lead to nepotism and corruption.”
– “…each civil servant is forced to play more roles than he would in a more populous society. Such multi-tasking can be demanding and makes it difficult to build up expertise in a particular area.”
– and it’s not clear that policy-makers in a small remote polity will be able to avoiding becoming insular in their thinking?

There are work-arounds. For example a country can import or hire expertise. Also, “Residents of a country with variable output can smooth their consumption across states of nature by holding a diversified portfolio of home and foreign equity.” Perhaps a portfolio could be built with a resource investment fund similar to Alaska’s permanent fund


  1. Why? John come on. Ask not of the people, ask the Government. What a silly question.

  2. Independence for micro-states is a common topic of discussion. Mostly because the UN has a committee for de-colonization that actively pursues independence for these micro-states.

    I have a friend who attended the recent conference in Greenland (he’s an MP for Nunavut). The upshot of the meetings were mostly discussing replacing the ties to Denmark with ties to other predominantly Inuit places, like Nunavut. Not really true independence.

    It’s becoming more and more difficult for smaller countries to be truly independent, and alliances between all sizes of countries are forming all over the world. There’s no truly independent country these days, we’re all interlinked at many levels.

    Well, maybe Switzerland.

  3. “Many necessary decisions and actions can be modified, adjusted and sometimes totally neutralised by personal interventions and community pressures. In extreme cases, close personal and family connections lead to nepotism and corruption.”

    What a shock…

  4. I agree with RenMan. Smaller countries have to strongly consider the implications of going independent in this era. This isn’t the 60s or 70s when breaking from the colonial powers in Britain and France was paramount to securing a better future.

    How would a place like Greenland fare without its tie to Denmark? I couldn’t guess. I’m still trying to wrap my head around the fact that Bermuda and Greenland have similar population sizes despite the fact that our land mass could easily fit inside one of the myriad of fjords in that country.

  5. The comments are spot on.

    As alliances (new) are built around the world, as countries come together (Europe), and do so against the economic strength of China (today) and India (tomorrow), the notion of casting yourself adrift is nonsense.

    Worrying when the heart overtakes the head.

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