Good governance in small states

Abstract

Governance is very important for all states, but it is especially so for small states, which are often characterized by very limited resources endowments and are very prone to the negative effects of external shocks. In addition good governance is associated with the protection of human rights, provision of security, and delivery of essential services, such as health and education. This dissertation attempted to find an association between good governance and the size of countries. It also profiled governance performance in small and large states. In this disse1iation small states are defined as those with a population of 1.5 million or less. An overview of the main indicators used to measure governance across countries, including the Kaufmann Index, Country Indicators for Foreign Policy, Freedom of the World Index and Control of Corruption Index is presented in the dissertation. The outcome of such analysis confirmed the hypothesis that as a group of countries, small states with a given GDP per capita tend be better governed than larger ones with a similar GDP per capita. The Kaufmann Index was also used to examine the best and the worst performing small states, in terms of governance. The worst performers, as expected were countries with very low per capita income. Conversely, the best performers were small states with a relatively high per capita income. The main implication of this study is that small size need not preclude a country from being well governed. The dissertation also discussed the causality of the relationship between good governance and GDP per capita. It is not possible to definitely conclude, in quantitative terms alone, whether countries develop because they arc well governed, or else whether they ure well governed because they can afford it. Whatever the direction of the causality, one can conclude that less developed countries that aspire to promote economic development, need also to improve their governance.