Geographical ‘handicaps’ and small states: Some implications for the Pacific from a global perspective

Abstract: Research on the economic performance of small states has concentrated on the implications of small size and thin local markets. An interesting feature of many of the world's smallest states, of which the Pacific region has many, is that they face additional challenges than just small size. Many are remote from global markets for their products. In addition, a large number are also islands, many of which are also mountainous. Many of the smaller states are not just islands, but are also archipelagos. Hence in addition to small size, many of the world's small states also exhibit four other characteristics that may affect their economic performance: insularity, remoteness, being archipelagos and being highly mountainous entities. This paper examines the nature of the challenges posed by these four characteristics and seeks to produce empirical evidence of how difficult it has been to overcome these challenges. The paper draws on empirical evidence for 126 very small global states, dependent territories and highly autonomous regions. The paper then turns to the position of the Pacific small states and dependent territories.