ABSTRACT
Small states are an increasing feature of the contemporary international economic environment as a direct consequence of both decolonisation and, more recently, the disintegration of larger nation states into smaller independent ones. Paradoxically, this growth has been paralleled by the growing economic and political power of an increasing number of trade blocs, or regional trade agreements (RTAs), as the globalisation process has intensified. These developments represent a severe threat to the economic and political sovereignty of nation states, particularly developing countries and small states because of their marginality. In the face of these challenges, many small states however have demonstrated considerable resilience and enjoyed some significant success in achieving sustained economic growth and high per capita incomes. This growth success has stimulated a body of literature focusing on the key determinants of the economic performance of small states in the context of their size, vulnerability and the effects of globalisation (Armstrong and Read, 1998a, 2001a; Read, 2001).
