Island political economy

Abstract

In this chapter we build on the observation that island economies, and especially small ones (population below one million), exhibit a remarkably wide range of economic structures built on a correspondingly wide range of development strategies. Common elements of "islandness" may serve to define island economies as a general class, but there clearly exist several distinct "species" within that class, and a corresponding menu of strategic options open to islander communities in relation to the terms of their incorporation into the global economy. The chapter has two important messages. First, there is no unique path to development. Second, in small economies, the social capital and "institutions" emphasized in the recent development literature (Hall & Jones, 1999; Acemoglu et al., 2002; Rodrik et al., 2004) have to be understood as incorporating the ability to achieve and sustain community-wide strategic consensus around a particular development specialization, along with sufficient flexibility to switch to alternatives as and when the field of external opportunities changes.