eli5: Why are microstates so often incredibly rich?

Question

eli5: Why are microstates so often incredibly rich?

In: Economics

Answer 1

They’re often tax havens, which encourage people to bring money into the country.

They’re usually cities spanning most or all of their territory. Cities are much more economically active than countryside is, which raises productivity per capita.

Most are either islands or on coasts. Coastlines tend to be economically active and attract tourism.

But the simple answer is that many aren’t, you just hear about the ones that are. Take, for example, [Tuvalu](https://en.wikipedia.org/wiki/Tuvalu), with a GDP per capita of just $3,600.