Principles of Economic Growth University of Iceland冰岛经济增长大学原理.pptVIP

* * Size and Growth: Thorvaldur Gylfason Small States in the Global Economy Big countries and small To paraphrase Ernest Hemingway: Small countries are different from big ones in that … … they have fewer people Do small countries differ also in other respects? If so, how? What are the benefits and costs of being small? What are the challenges for future? Blessing or curse? Controversial issue “Our shortage of people is our most serious social evil,” said our national poet, Einar Benediktsson Consider arguments and evidence 1 Being small: Benefits Homogeneous population Social cohesion is good for growth Openness to trade and investment Being small and closed is not an option Small agriculture and natural resource base Too much agriculture impedes growth Everyone knows practically everything about everybody else 2 What are the benefits? What are the costs? Being small: Costs Economies of scale and scope Public sector, defense Private sector Lack of diversification Vulnerable to external shocks Poor location Remote, landlocked High transport costs Few like Mozart, and far between Empirical evidence: Sample of countries 3 There are now 207 countries in all reporting to World Bank, and Taiwan Of these, 61 have fewer than 1.3 million inhabitants … … and 18 have fewer than 100,000 So, there are 43 countries with population between 0.1 million and 1.3 million Of which, 26 are islands: Our sample What do the data tell us? Sample of 26 small island economies I Bahamas 298 15,500 Bahrain 666 11,600* Barbados 267 14,000 Cape Verde 428 4,500 Channel Islands 149 Comoros 544 1,400 Cyprus 761 19,100 Fiji 801 4,800 French Polynesia 231 22,200 Guam 152 Figures refer to 1999. GNP is adjusted for purchasing power parity. * 1998 1 Thousands 2 USD Populatio