Abstract
Small island economies are often dependent on external rents: military base, administrative assistance, migrant remittances. This causes a form of Dutch disease, which impairs the competitiveness of their economies. Using the theory of international trade theory, the article shows that island economies have a comparative advantage in supplying and exporting non-market (geostrategic or diplomatic) services in exchange for financial assistance to help finance imports manufactured goods and energy. This informal form of international exchange benefits both parties, providing better productivity in the production of military or diplomatic services to the large country, and a better standard of living in small island country or territory.
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