Why do some microstates, especially those in Europe, tend to be immensely wealthy? e.g. Monaco, Singapore, San Marino

Question

Why do some microstates, especially those in Europe, tend to be immensely wealthy? e.g. Monaco, Singapore, San Marino

In: 350

Answer 1

Some of the very small Pacific nations aren’t wealthy, like Nauru, Palau and Tuvalu.

But it’s often quite easy for small countries to effectively poach wealth from elsewhere by taking advantage of the things that being a sovereign nation allows you to do. For example, you can set low tax rates and pass financial secrecy laws, so that rich foreigners will want to move to your country and foreign companies will want to move some of their money there.