These countries clearly produce a lot of value for their residents. They wouldn't be insanely expensive to live in if they didn't. They obviously have better political structures or policies in order to have these outcomes. But one problem with these better political structures is they tend to not be war-like. While that is good for the residents of the country and the surrounding country it means they aren't expansionary and never will be. This creates a race to the bottom situation for the nations. Countries whose structures invite power hungry people into power or don't lead to resourcefulness with what a country has, or lack the diplomatic approach to trade voluntarily for the external resources they want, or are generally morally bankrupt enough to see war as a positive, these are the countries that are expansionary.

But countries whose centers have morals and aren't grabby lead to maximum human development and happiness, but stay small. For whatever reason they lack the Machiavellian dynamics that reward individuals in the government to grab more and more power for that government.

So how do we multiply good and reduce bad? These countries need to grow. And there is a market pressure for them to grow. There just isn't a political pressure.

A while ago I was looking at real-estate prices around Monaco. Monaco if you don't know is the most expensive country in the world per square foot. A square meter in monaco costs about 50,000 euros. So me being the curious person I am wanted to know what the gradient in price looks like in the surrounding area. I found an apartment one block away from the boarder in France going for $900 a month. That's half of the price floor in my area. So what is the gradient? It's instant. A one minute walk past the border and you have a very cheap area next to the world's most expensive area. If you go to the next town over East along the coast you can get a near waterfront apartment for a little less than $800 a month, but if you head West along the coast toward Nice it get's more expensive. So the price gradient in France seems to ignore Monaco, even up to the boarder, and really is dependent on distance from Nice.

To me it seems like there would be a huge market pressure to expand these countries. But how? If we adopted the old school original American concept that sovereignty and assignment of sovereignty should be based on the will of the people the land owners in the surrounding country have a lot of reason to want to join. Maybe they should be allowed to make this adjustment. The problem is the Machiavellian dynamics of a larger country like France makes ego a very important currency in their government and the idea of ceding land, even though it doesn't impact them personally, becomes an issue.

We see this problem in Spain. Catalonia has been wanting to separate from Spain for quite a long time but Spain will not allow it. Politically Catalonia tends to lean further left than the rest of the country while the country as a whole and thus the regime in power tends to be center right. If Spain were to let Catalonia go they would win every election permanently. But the problem is this hurts their ego. Also it loses them some taxes. But mostly it hurts their ego because if those in power were to lose it that would be the same as losing all of Spain's taxes from their perspective.

Maybe the Spanish feel very secure in their position and would rather control more than less but this isn't the case everywhere. If it weren't for ego you would see a lot more support for separation movements by the exact opposite political alignment all over the world. But the 15 minute nigger need for control that leads politicians into office in the first place prevents that kind of thinking. This is exactly the backwards thinking that makes these countries expansionary and explains their current size. And it is this backwards thinking by the people at the top that leads to comparatively worse outcomes in human development for their citizens compared to what micro-nations can achieve.