You will see that the estimates can vary quite a lot from one guessing institution to the next (see Taiwan, for example). But it's pretty clear that many small places display economic performance well in excess of Germany's and even, in quite a few cases, the USA.
(Just so that you can calibrate these figures with my earlier post, note that, just off the bottom of this list, we find France, the UK, Saudi Arabia and Korea at 25, 26, 27 and 28, Italy at 31, Japan at 36 and Spain at 37.)
So let me return to the question I ducked in my earlier post. Why should this be?
I think we can discount superior governance skills. Singapore is famed for its meritocratic governing class, but Luxembourg - Jean-Claude Juncker notwithstanding - is not, and Switzerland is famed for being so decentralised as to have no real governing class at all. I pointed out earlier that Belgium, Austria and Iceland are not widely regarded as models to emulate, and we in this country, for linguistic and historical reasons, are fairly well aware of flaws of the Irish and Australian ruling classes. I'm prepared to be persuaded that Liechtenstein has a peculiar genetic advantage in statesmanship provided by its isolated mountain location, but I'm not holding my breath.
Let's start with some obvious points. If you're a small country and have natural resources then those natural resources will be shared among fewer people than in the case of a big country. There's obviously the job of managing the resources and doing the sharing out, but that's not as difficult as some jobs in government. Even Singapore benefits from this: it has many things going for it but one of them is the natural resource that is its geographical location. Natural resources can also include some relatively 'unnatural' ones: Panama is the richest country in Central America (per capita), and the fact that it has a big, man-made canal running through it is not irrelevant to that.
Moreover, some features of a country behave like natural resources. There are a few tax haven-y kinds of country in the list (Ireland included, it's fair to say). Having a combination of secure property rights, internationally legible laws and low taxes can work pretty well: it can ensure a steady stream of company registrations and the odd bit of corporate administration, tax work, litigation and so on, all of which is small beer for the companies or mega-rich individuals involved but adds up to a decent living for the small number of citizens who get to take their cut.
As I say, that's all obvious. Let's think of a few, more interesting, reasons.
I would guess that small countries are free riders on big ones in certain respects. Take security infrastructure, for example. Belgium and Luxembourg simply don't need to defend themselves, and that frees up money for other things. Germany has also been a bit of a free-rider on defence spending, while France and the UK have come closer to pulling their weight. One might think that the likes of Germany, Belgium and Luxembourg have raked in the GDP points that come from making more butter and fewer guns (or nuclear weapons). One might regard this sort of thing as a bit like insurance: if you save your money on insurance then you will be richer, unless and until some disaster strikes, but if you're lucky in avoiding disaster then you can save a lot of money.
Small countries can get a bit of a free ride on other 'overheads'. France has a certain position in the world as the leading Francophone country, and that comes with obligations to maintain the Académie Française, the benefits of which are felt by French-speakers across the world. You think that's a silly example? Maybe. But it's illustrative of a wider point. A 'big' country is, one way or another, obliged to maintain a diplomatic infrastructure, 'world-class' or 'leading' universities, first-rank cultural institutions and the back-up infrastructure to support them, the odd World Cup or Olympic Games, well-funded medical and research institutions, and so on - all of which are things that have spill-over effects for the rest of the world. The best place for the Olympics to be held is France: we can get there easily and French taxpayers pay. But sometimes we have to grin and bear it ourselves.
These overheads mount up. Think of the covid vaccines. The Oxford/Astra Zeneca one was in large part the result of the UK being the sort of place that researches vaccines - a big, serious country. China and Russia - both per capita poorer than the UK - also had their own vaccines, again because they are big, serious countries. The benefit of these vaccines flows to the whole world (quite rightly, no doubt) but is a net cost to the big country from which they originate: the Astra Zeneca vaccine was not sold to make a profit, for example. Meanwhile, no one expects Luxembourg to join in playing the vaccine-development game. I'm sure Luxembourg pays its share of global or international health projects, but its own population is free to devote themselves to making money running company registration services or what have you. A really big country, like the US, can carry this overhead more easily than a moderately big country like the UK or France.
Small countries can outsource a lot of heavy lifting in this way. Jersey and the Isle of Man can rely on the UK for things like specialist medical care and higher education. They pay, one assumes, but surely only the marginal costs, not their share of the total costs. And does the NHS really charge them full whack?
Finally, two more speculative thoughts.
First, political overhead. I live in London, which means that my directly- and indirectly-elected representatives include: a couple of local councillors, the mayor of my borough, a geographically-elected London Assembly member (plus a share of the rest based on party lists), the chair of the London Assembly, the Mayor of London, my MP and the Prime Minister. That's really quite a few people. Do we need all of them? And all their hangers-on and administrative staff and so on?
I wouldn't be surprised if, based on present technologies and social conditions, there are discontinuities of scale in countries: perhaps there's a good efficiency in the very very small countries, another zone of efficiency at about 5m people (Denmark, Finland, Norway, Ireland, Singapore), and another one at about 10m (Austria, Sweden, Belgium; also: London, Paris), but the overhead you need for running the 50-60m-level countries (UK, France, Korea) is quite burdensome, and could just as well be used to run countries at the 80m size (Germany) or even countries bigger than that.
Second, grands projets. A physically small country makes big, high profile, front-page-of-the-international-newspapers infrastructure projects impossible. That's probably a good thing. The amount of national pride that goes into these things makes it highly likely that they are a waste of money.
So, for example, it's quite plausible that high speed rail is a bad use of a country's money. Japan and France are famous for their very good fast trains - and neither is a posterchild of economic vitality. Even Italy has a 400 km/h train. Is that a good use of their money? Germany is a great big country, bigger than France or Italy, but its trains run at something more like the speeds we are used to in this country. Maybe the Germans are on to something?
The US, by contrast, is famous for poor public infrastructure, including rubbishy public transport - and yet equally famous for being economically vibrant. Take California, for example: has the population of Poland and an area between that of France and the UK. If California were a European country then it would be bound to have a few high-speed rail lines across it; in reality, being in America, it has one under construction. The US has just one high-speed rail service - Acela - and that averages just 66mph between New York and Boston.
It's easier to think of French vanity projects of this kind than British ones: minitel, TGVs, nuclear power (ok, that was a good one) and the big glass pyramid outside the Louvre. But I suppose we've got "smart motorways", HS2 and the national sport that is arguing about whether to have a third runway at Heathrow, so we try our best.
I suppose the right attitude to adopt to all this is to make the most of the glorious wastes of money that our country finds itself producing. San Marino and the Cayman Islands are terribly rich and all very nice, I'm sure, but do they have that great big section of Waterloo Station that was used for the Eurostar for a while? Or a London Assembly member elected on the D'Hondt system? Thought not.
