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This chapter provides a critique of the contribution of tourism to the sustainable growth and prosperity of small economies in the context of the challenges posed by climate change. These economies generally face unique challenges because of their small size and exposure to global shocks and extreme climatic conditions. As major source of income and employment, tourism is a key element in the growth strategies of small economies. The principal determinants of growth of small economies are reviewed and the impacts of the tourism sector are analysed in terms of employment, multiplier effects and local linkages as well as its social and environmental impacts. The critical dependence of tourism upon long-haul air travel and large cruise ships represents a major, and possibly insuperable, challenge to the future viability of the sector in many small island economies.

Small nation-states and subnational regions share many similarities in terms of the challenges faced in implementing successful industrial policies. Globalization and the emergence of supranational organizations such as the European Union are also making the two sets of entities much more similar over time. This article argues that recent research advances are revealing that policy makers in small nations and regions can share important policy lessons. In particular, extensive recent research on industrial clusters, the determinants of economic growth, and new regional governance structures is generating a number of important policy lessons. The mutual lessons being exposed by this research suggest strategic policy stances for smaller nation-states and regions that significantly differ from those of larger countries and industrial giant regions.

This paper is concerned with the relationship between economic growth in small states and their vulnerability. A critical argument in much of the literature on small states, particularly small island states, is that their growth performance is greatly constrained by their vulnerability to exogenous shocks because of their size. These shocks include economic, political and environmental factors, which together dampen the long-run growth rate of these economies. The paper makes use of a global small state data set and appropriate quantitative techniques to test the relationship between growth and vulnerability using the results of Briguglio's Vulnerability Index. The results highlight some of the conceptual shortcomings in the analytical literature on small states, particularly islands, as well as suggesting that the Vulnerability Index is mis-specified. Copyright © 2002 John Wiley & Sons, Ltd.

In recent years there has been considerable research attention directed at understanding the economic performance of sovereign very small states, many of which are also islands. This paper reviews the theoretical and conceptual arguments concerning the different challenges which small states and island economies face within an increasingly globalised system. The empirical evidence drawn from previous research by the authors stands in direct contrast to the theoretical literature. Very small states are shown to have performed generally very well and their economic performance is as good as, and often better, than that of larger states. Interestingly, whether a very small state is an island or not appears to have virtually no influence upon subsequent economic performance. The paper concludes with a comparison of very small states and non-sovereign island economies within Western Europe. Sovereign small states (whether islands or not) generally perform better than their non-sovereign island counterparts in Western Europe. The pattern is not, however, a uniform one. Some non-sovereign islands in Western Europe, particularly those able to develop summer vacation tourism activity have performed well.

Western Europe has a large number of sovereign micro-states and, in addition, there are also a number of regions of the European Union (EU) which have an unusually high degree of autonomy. This paper examines the economic performance of these micro-states and autonomous regions which is found to be superior to that of adjacent EU regions. The strong economic performance of these micro-states and autonomous regions is shown to be closely related to activity in the financial services sector, tourism and, where present, natural resources. Complex differences among the group of micro-states and autonomous regions are also revealed.

The Single European Market (SEM) represents the final stage in the process of economic integration of trade in goods and services and the free movement of individuals in the European Community (EC). The discussion of the benefits of the SEM has been concentrated primarily at the extent to which the elimination of non‐tarrif barriers will lead to greater economic efficiency. This article reviews the progress in the creation of a single labour market within the EC and the relationship between labour mobility and migration in order to assess the impact of the free movement of labour. It argues that internal migration will generally fall due to the free mobility of capital. Where labour embodies significant human capital however, migration is expected to rise in response to the removal of barriers.

The Single European Market (SEM) represents the final stage in the process of economic integration of trade in goods and services and the free movement of individuals in the European Community (EC). The discussion of the benefits of the SEM has been concentrated primarily on the extent to which the elimination of non‐tariff barriers will lead to greater economic efficiency. The progress in the creation of a single labour market within the EC is reviewed and the relationship between labour mobility and migration in order to assess the impact of the free movement of labour. It is argued that internal migration will generally fall due to the free mobility of capital. Where labour embodies significant human capital however, migration is expected to rise in response to the removal of barriers.

This paper analyses the political economy of trade protection in the context of the factors determining the US Emergency Safeguard Measures for steel imposed March 2002. The paper identifies several factors in addition to the official justification stated problems of global over-capacity and the penetration of imports in the US market, namely the continued failure to restructure poorly performing firms, failure of previous attempts at protection and the influence of the domestic steel lobby and short-term political gains to the Bush Administration of protectionist action. The paper also reviews several ex ante and ex post empirical studies of the impact of the steel Safeguards on the steel industry and downstream steel-consuming activities. All of these studies find that the costs of the Safeguard Measures outweighed their benefits in terms of aggregate GDP and employment as well as having an important redistributive impact. The paper provides a brief summary of the subsequent WTO steel case and the final resolution of the dispute. The evidence suggests that the steel Safeguards owed more to political expediency than justification for protection under the WTO rules.