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a normative theory

4.3 Organizational choice: theoretical expectations versus reality

4.3.9 Theoretical expectations versus reality – political system

It is beyond the scope of this work to go into the details of the political systems of VSC. This chapter is designed to give a brief overview of im-portant political variables. Not unexpectedly, the political systems of VSC differ from political systems of larger countries. Nevertheless, dif-ferences between larger countries and VSC are sometimes less significant than differences among VSC, which can easily be seen in Table A.12 in the Appendix. Hence, difficulties arise when the political peculiarities of

92 Indeed, World Bank (1998) indicates totally different figures for Micronesia. The average government current expenditure on health is 10.8% of current government expenditure (1990–1995) and 10.6% (1995), based on World Bank and IMF data. The large difference cannot be due to different definitions (e.g., current vs. total expendi-ture). Unfortunately, the figure for Andorra could not be checked.

VSC are to be assessed. The issue gains additional complexity when the impact of the political system on the economy of VSC is investigated.

Despite these problems, there are certain common features of the political systems in VSC:93

– The «distance» between politicians or bureaucrats and citizens is supposed to be very short, which means that the close net of social relationships ensures that nearly everyone knows at least one mem-ber of a relevant authority personally. Note that this fact may bring about advantages as well as disadvantages for the economy.

– As a result of this close net of social relationships, VSC are said to have political systems which tend to favor concordance or compro-mise over conflict, as is also common in federal units. An indicator corroborating this proposition might be the slightly smaller number of parties in VSC in comparison to larger countries.

– Formal structures of control are often replaced by informal social control because of the close social relationships. It is a philosophi-cal question whether this informal social control curtails personal freedom.

– Resulting from the small number of possible candidates, the social and political system is characterized by a high degree of elite connectivity with ambiguous effects. E.g., there is a high risk of ha-ving (and perhaps promoting) personal interests in public policies due to the high degree of elite connectivity.

Dahl and Tufte (1973) conclude that open conflicts pose a severe threat to VSC and that their political systems are therefore designed to avoid conflict, whereas political systems of larger countries have more options to handle and moderate conflicts. If there is an open conflict, VSC are normally not prepared and equipped with adequate strategies to handle it.

93 See, e.g., Dahl and Tufte (1973), Geser (1991) and Geser (1993).

When analyzing Table A.12, one comes across the expected feature of many VSC having a small number of political parties. Only one third of the chosen VSC have three or more political parties of significance. In six VSC, two parties dominate the political scene, either by distributing all the votes between them or by obtaining an overwhelming majority of votes. Some of the VSC, as can be seen in Table A.12, have only one party of significant size or only a single party. Four countries, namely, Brunei, Micronesia, Nauru and Palau have no parties at all. There is a ban on parties in Brunei, and in the case of the Pacific VSC, their cultu-ral heritage seems to make formal parties unnecessary in the political sys tem. Note that we do not indicate royal houses in Tables A.12 and A.13.

As to the number of parliament chambers and the number of par-liament members, it was clearly expected that VSC would normally have only one chamber and, of course, fewer members compared to larger countries. Nevertheless, we could detect seven countries with two cham-bers of parliament, and the number of memcham-bers ranges from 15 (St. Kitts and Nevis) to 65 (Malta). In most of the countries, membership in parliament is honorary, and members have full time employment else-where.

An astonishing diversity appears in the number of cabinet members in the selected VSC. Monaco and San Marino get by with four cabinet members; Barbados needs 17, including three secretaries of state. On average, the selected countries, notwithstanding, have smaller cabinets than larger countries. The difference is, though, surprisingly small, es pec ially when we consider the ministerial level exclusively. Disregard -ing countries with traditionally huge cabinets like France, many national cabinets consist of 10 – 15 ministers.

Note that the Commonwealth countries listed in Table A.13 in the Appendix have a Governor General in addition to the Prime Minister.

Most other countries have a president, with the exception of Palau, where the President is also Prime Minister. The number of cabinet minis ters excludes Attorney Generals when they not have their own minister portfolio.

Looking beyond mere numbers of ministers, there are some notable peculiarities of VSC. Naturally, in those countries with only a few cabi-net ministers, there are normally a lot of ministers with more than one assigned department. Furthermore, the Prime Minister sometimes has

his or her own portfolio, which is rather unusual in larger countries.

More surprising than this fact is the sometimes very high concentration of power in one or two ministers. It is not an exception that, e.g., the Prime Minister is also the Minister of Finance and/or Minister of Foreign Affairs. A good example is St. Kitts and Nevis, where the Prime Minister is also the Minister of Finance, Development, Planning and National Security. Hence, there seems to be a tendency of combining, on the one hand, central or high-priority departments with other central de-partments in one ministry and, on the other hand, peripheral with other peripheral ones. One reason for this tendency may lie in the limited number of highly qualified and experienced politicians. Another reason could be the strategy of VSC of assigning important issues to two or three ministers who are the representatives of the country abroad in order to be actually recognized by other, larger countries

The fact that some VSC have a Minister of Local Government sug-gests that, despite the smallness of the countries, a considerable degree of federalism exists. This is especially true for island VSC consisting of only a few islands. A prominent example is Micronesia with its four states, which play an important role in the political system of the country.

4.4 The extent and structure of international outsourcing in