“Small State Foreign Policy” by Sverrir Steinsson and Baldur Thorhallsson. 2017. From The
Oxford Research Encyclopedia of Politics (Oxford University Press).
Abstract. Size matters in international relations. Owing to their unique vulnerabilities, small states
have different needs, adopt different foreign policies, and have a harder time achieving favorable
foreign policy outcomes than large states. Small states show a preference for multilateral
organizations because they reduce the power asymmetry between states, decrease the transaction
costs of diplomacy, and impose constraints on large states. Small state security policies vary
widely depending on domestic and international conditions. Despite the inherent disadvantages to
being small, small states can compensate for the limitations of their size and exert influence on
world politics, provided that they use the appropriate strategies.
The international system is full of small states. The number of small states swelled in the 20th
century, with the end of both world wars, the decolonization process in the 1960s, and the collapse
of the Soviet Union in 1991. More than half of the member states of the United Nations (UN) have
a population of under 10 million. It is reasonable to expect the number of small states to continue
to rise, assuming that the international system remains peaceful, economically open, and
institutionalized and that the international community remains open to legitimate claims to self-
determination. Small states are not only prominently represented in numerical terms within the
international community but can, as we show in this article, influence world politics. It is therefore
essential to study the foreign policies of small states, not just for its own sake, but to draw lessons
for foreign policy analysis and international relations in general. We argue, as Veenendaal and
Corbett (2015, p. 527) do for comparative political science, that studies of small states have the
potential for enormous intellectual payoffs for international relations and foreign policy analysis.
Small states are certainly disadvantaged in the international system. Having a small population
inherently inhibits the aggregate structural power of that state, as well as creating hurdles that need
to be compensated for and unique needs that have to be fulfilled. Small states are geographically
and economically diverse, and thus face different challenges in terms of security and welfare. For
instance, wealthy Luxembourg, a founding member state of the European Union (EU), which
boasts a central position in European politics, encounters different challenges than the young Baltic
states that border Russia at the EU’s periphery. The challenges that these states face differ from
those faced by small states, such as the Central African Republic or Liberia, where poverty is
immense and state failure is a high risk. Nonetheless, they all have to compensate for size-related
problems and meet needs that are inherent to their smallness (see also Wivel, Bailes, & Archer,
2014, for a discussion on the structural disadvantages facing small states).
The security policies that small states adopt reflect the unique domestic and external challenges
that they each face. We can therefore not draw conclusions that apply to all small states in the
realm of security policies. What scholars can agree on is that small states generally prefer
multilateralism as both a path to influence and a means to restrain larger states. Studies of
influential small states indicate that they are able to develop issue-specific power to make up for
what they lack in aggregate structural power. Small states can therefore develop power
disproportionate relative to their size on the few issues of utmost importance to them. In addition
to prioritization, small states have successfully employed the strategies of coalition-building and
image-building. Even though small state administrations lack the resources of their larger
counterparts, their informality, flexibility, and the autonomy of their diplomats can prove
advantageous in negotiations and within institutional settings.
This article provides a brief discussion on how “small states” can be conceptualized. The second
section outlines the disadvantages that small states face and the needs that they must satisfy. It is
essential to consider both of these in order to conceptualize, evaluate, and predict small state
foreign policy choices and bargaining outcomes. Third, we discuss security strategies that small
states adopt. Fourth, this article explains the ways in which small states may turn the disadvantage
of their small administrative size into diplomatic advantages. Fifth, we examine how small states
make use of multilateralism. Sixth, we analyze how small states in the European Union have
employed multilateralism and used the aforementioned diplomatic strategies to achieve successful
bargaining outcomes. The last section discusses the extent to which small states pursue practical
foreign policy goals (as opposed to ideational status-oriented goals) and provides a brief summary
of our main findings.
The Concept of Small States
Small state size has been defined in various ways. Central to most definitions of smallness is a
shortage of the resources and capabilities that determine power and influence. The foremost
variables concern the size of population, territory, economy, and military. Of these, the most
common factor for defining state size is population size. States with up to 30 million inhabitants
are sometimes considered small, although most academic definitions regard those with less than
10 or 15 million inhabitants as small (Armstrong & Read, 2000; Easterly & Kraay, 2000; Jalan,
1982; Katzenstein, 1984; 1985; Kuznets, 1960; Ross, 1983; Vital, 1967).
While recognizing that the aforementioned factors are important in conceptualizing state size, they
are arguably an outdated measure of power in the modern international system. After all, the
international system is unprecedentedly peaceful, institutionalized, and economically open
(Alesina & Spolaore, 2003; Fazal, 2004; Fazal & Griffiths, 2014), which might mean that we
overestimate the importance of population, territory, economy, and military size as components of
power. Therefore, multifactorial definitions have been proposed that aim to include a broader
swath of factors relevant for determining size in the modern international system. Thorhallsson
(2006) proposes a framework of fixed size (population and territory), sovereignty size (the degree
to which a state controls its internal affairs and borders and is recognized), political size (military
and administrative capabilities, domestic cohesion, and foreign policy consensus), economic size
(GDP, market size, and development), perceptual size (how a state is perceived by internal or
external actors), and preference size (the ideas, ambitions, and priorities of domestic elites
regarding their role in the international system).
Others think of size as a relative concept, with small states simply being those that are far inferior
to great powers or modestly inferior to middle powers in terms of influence at any given time
(Handel, 1981; Morgenthau, 1972, pp. 129–130) and struggle to influence the international system
(Keohane, 1969; Rothstein, 1968). Furthermore, a state with a larger population size may be
surrounded by one or more great powers, making it relatively small and giving it limited action
space in its region. A state with a population below 15 million may also have some unique
characteristics and circumstances that inflate its influence (such as resource richness or strategic
importance) and alleviate the common limitations that small states face. Looking far back into
history makes definitions of small size even more subjective and relative, as political units were
far more diverse and fragmented, with different sources of state power and with far lower absolute
population numbers. Thus, there is always a degree of relativism to small state size.
Small State Disadvantages and Needs
It is futile to analyze small states’ foreign policies without considering the inherent disadvantages
to being small, which shape both foreign policy choices and outcomes. Most importantly, small
states have less aggregate structural power (the total amount of resources and capabilities that can
be employed) than large states. They are militarily weak, owing to the constraints of small
populations and economies. They can also mobilize fewer raw numbers of forces, invest less on
research and development of military technology, and sustain military campaigns for shorter
periods. Military weakness, coupled with the lack of a buffer against threats, leaves small states
vulnerable to external coercion.
Small states are unable to field a large and diverse diplomatic force, which limits the skills and
human resources that can be put into forming foreign policies and taking part in negotiations
(Corbett & Connell, 2015; Haque, Knight, & Jayasuriya, 2015; Thorhallsson, 2000, 2006). The
early American republic found it difficult to service a capable American diplomatic force and thus
was forced to employ foreigners as consuls in some cases (Herring, 2009). Very small and poor
nations struggle especially with forming deliberated policies. For a newly independent Tuvalu,
McIntyre (2012, p. 145) reports that “only two Tuvaluans working in the country had university
degrees” and that “in one ministry, only the minister and his secretary had more than primary
education.” Smallness does not only adversely affect national research capacity but can also limit
cooperation with other states. For instance, Iceland was barred from accessing U.S. intelligence
during the early Cold War, with the United States citing Iceland’s inadequate and rudimentary
capacities for safely storing intelligence (Ingimundarson, 1996). Poorly informed and resource-
strapped states make for less valuable coalition partners and may even prove to be a burden for
Small states have smaller economies, which limit their influence in economic negotiations. The
transaction costs of diplomacy are also far more burdensome, since they do not have large foreign
policy apparatuses. Small economies of scale inhibit them from developing specialized knowledge
on a wide range of foreign policy issues. Weak aggregate structural power makes them less
attractive coalition partners and incapable of side payments in negotiations (Panke, 2010). The fact
that small states have varied interests (in other words, they do not have common “small-state
interests”) prevents them from forming natural coalitions with each other in order to offset the
power of large states (except on issues that concern the size of states specifically, such as treaty
reforms in international organizations). Small states therefore face a shared set of diplomacy
challenges relative to large states.
It is also essential to understand the unique needs of small states, as these needs are reflected in
the foreign policy choices of small states. The fulfillment of these needs can also be a useful
measurement for small state foreign policy success. First and foremost, they need a peaceful
international system and the security guarantees of powerful states and organizations, since they
are largely incapable of defending themselves. In early international relations scholarship on small
states, this was seen as the most pressing concern facing small states (Vital, 1967). The inherent
military vulnerability to external coercion for the small city-republics has also been a chief concern
in republican thought (Deudney, 2007).
Looking at the total military resources that states could potentially commit to a war does not tell
us everything about how small and large states would fare against each other in war. After all,
many wars are characterized by an imbalance between the interests that belligerents have at stake
and the resources that actors are willing to commit to a conflict. Consequently, small states may
expend more resources than the large state is willing to and therefore win the war (Habeeb, 1988).
Small actors have actually fared better than large actors in wars since 1950, even if they did far
worse during the period 1800–1949 (Arreguin-Toft, 2001). Aside from commitment, it can be
argued that small actors increasingly win asymmetric conflicts due to the proliferation of advanced
arms and military technology (which has made conquest and occupation of weak actors harder)
and the spread of democracy (resulting in an increased number of larger actors that are casualty-
sensitive). Arreguin-Toft (2001) argues that the strong actors typically win when they fight dirty
against smaller actors by using guerrilla or terrorist tactics. Strong actors are, however,
increasingly unwilling to use barbaric methods, which may partly explain their lack of success in
the post-1950 period. That said, the lack of military power still plays a significant role in the
foreign policies of small states.
To meet their economic and security needs, small states must also rectify the power asymmetry
between them and large states in negotiations and fill gaps in diplomatic resources. The diplomatic
forces that small states can muster are far smaller, less skillful, and less diverse than those deployed
by large states. Due to smaller economies of scale, the transaction costs of diplomacy are far higher
for small states, which hinders their engagement with other states and the formation of
comprehensive and informed foreign policies and leaves them without access to the best and most
credible information about the world.
To prosper, small states need an open international economy where states can trade freely. While
both large and small states benefit from free trade, smaller states are far more reliant on trade for
their prosperity. Unlike large states, which have large domestic markets (and therefore access to a
large market without trade barriers), small states, with their small domestic markets, greatly need
non-tariff and tariff barriers to trade in the world to be as low as possible. The viability of small
states largely depends on the openness of the global economy (Alesina & Spolaore 2003). Studies
suggest that as economic openness is reduced, so is the size of states in the world (Alesina &
Spolaore, 2003). A large body of literature documents how trade is a larger component of small
states’ GDP than large states’ (e.g., Alcala & Ciccone, 2004; Easterly & Kraay, 2000; Frankel &
Romer, 1999; Weatherhead, 2006). Tying themselves into international markets also boosts
efficiency and innovation in ways that a reliance on a small domestic market would fail to foster
(Eaton & Kortum, 2002, pp. 1772–1773; Keller, 2004, p. 776).
Small State Security Strategies
Small states pursue a wide range of security policies (see Baker Fox, 1959, for the first
comprehensive examination of the security policies of small states). They can either stay neutral
or join alliances, as well as bandwagon or balance. A large literature shows how small states (or
states in general) subordinate themselves to dominant states (e.g., Cooley, 2005; Donnelly, 2006;
Weber, 2000). For example, Lundestad (2005) described the U.S. role in Western Europe after
World War II as an “Empire by invitation.” Why do they choose to do this? According to Lake
(2009, p. 9), small states subordinate themselves under a hierarchy as a means to obtain order.
They seek order in a hierarchical relationship to (i) enhance security and territorial integrity; (ii)
clearly define and protect property rights at home and abroad (which reduces uncertainty, disputes,
and the transaction costs of trade and diplomacy); and (iii) set and enforce standards of behavior.
These benefits may outweigh the sovereignty costs of having rules imposed from above. Lake
(2009, pp. 4–7) recounts how the Dominican Republic willfully subordinated itself to the United
States, ceding considerable autonomy in exchange for economic benefits and security from internal
and external threats. Lake (2009, p. 7) proposes in this example that an appropriate counterfactual
to U.S. subordination is “a Dominican Republic in a state of nature in which local elites would
have been free to fight, other great powers would have been free to meddle, and regional rivals
from Haiti to Cuba would have been free to make outrageous demands or wage war.”
Neutrality is also pursued by many small states. Aside from the conditions of the international
system and the fluctuating aspirations of powerful leaders, the survival of the neutral small state
depends on its ability to demonstrate that it is truly neutral and a non-threat to larger states (Karsh,
1988). Thus it can provide diplomatic and humanitarian services which make it more useful to
large states than if it were an ally or a conquered state (Karsh, 1988). Deudney (2007, p. 57) cites
the foreign policy of “hiding” as the most common strategy employed by the small city-republics
but notes that hiding was often dependent on favorable geography. Natural barriers may protect
otherwise vulnerable small states by raising the costs of conquest to potential intruders, as was the
case with Switzerland (protected by mountains during the two world wars), Venice (protected by
a lagoon), Holland (protected by wide rivers), and Finland (benefiting from its climate during the
During times of war or tensions between the great powers, small states are highly constrained but
ideally should seek to be neutral (Labs, 1992, p. 389). For small states that find themselves located
between hostile great powers, neutrality may be the only reasonable course of action. Through
neutrality, these so-called “buffer states” can alleviate tensions between the hostile great powers
and thus also ensure their own safety. However, being a buffer state is not easy, and they are at
perennial risk of conquest by the surrounding great powers (Fazal, 2004).
Geographic distance and a lack of strategic importance can be blessings for small states, even
though there are clear economic downsides (Berthelon & Freund, 2008; Feyrer, 2009). For
instance, Iceland was lucky to have become strategically important in World War II and the Cold
War, when the dominant states in its immediate environment (the United Kingdom and the United
States) showered it with economic and diplomatic benefits in exchange for Iceland’s acquiescence.
Many scholars see alliances as crucial to small states’ survival and prosperity, but they disagree as
to whether small states tend to bandwagon (align with the most powerful or threatening actors) or
balance (align with weaker actors against powerful or threatening actors). Bandwagoning is seen
as the wisest survival tactic for the weakest states, since they have little to add to balancing
coalitions. Strong balancing coalitions are not always available either. Consequently, small states
are better off bowing to the will of powerful aggressors rather than incurring
their wrath: “In general, the weaker the state, the more likely it is to bandwagon” (Walt, 1987, p.
29). For Levy (1989, p. 231), proximity to strong states necessitates that weak states bandwagon:
“Great powers balance against potential hegemons, whereas weaker states in the proximity of
stronger states do what is necessary to survive . . . bandwagoning with the strong instead of
balancing against them.” Others see little distinction between large and small states when it comes
to balancing against power, in that small states are as likely as other states to balance against
powerful aggressors (Labs, 1992; Waltz, 1979). Labs (1992, p. 384) argues that “weak state
bandwagoning is as rare as Great Power bandwagoning; balancing against a powerful aggressor is
far more common.”
The literature on defensive alliances shows that they do work in ways that are particularly
important to small states. Most importantly, allies fulfill their alliance commitments in most cases,
coming to each others’ defense when attacked (Leeds, 2003A, 2003B; Johnson & Leeds, 2011;
Leeds, Long, & Mitchell, 2000). In addition to deterring adversaries, alliances also give allies
means by which to restrain their partners (Fang, Johnson, & Leeds, 2014). Alliances furthermore
reduce defense burdens by pooling resources (effectively giving small states access to resources,
technology, and intelligence that they could hardly develop on their own) and avoiding the
duplication of capabilities. Alliance agreements may also specify economic cooperation, which
has been shown to boost trade between allies (Long & Leeds, 2006) and make the allies even less
likely to be targeted by adversaries (Jackson & Nei, 2015).
Small members of alliances can exert influence on their larger allies by lobbying them
domestically (Keohane, 1971, pp. 162–167; Mearsheimer & Walt, 2009). Small states are also
known to attempt to lobby the foreign policy establishment of larger states directly. For instance,
the resource-rich Gulf states and Norway have made extensive efforts to influence the foreign
policy think tank community in the United States (New York Times, 2014). Smaller allies also
seek to influence by making normative appeals and relying on the legitimacy that underlines
international cooperation (e.g., EU, UN, and NATO actions become more legitimate if those
actions have unanimous support). Small allies that happen to be strategically important can often
expect extensive benefits from the larger allies, along with disproportionate clout within disputes.
This is particularly true when those small states are faltering in their allegiance to the alliance. For
instance, Iceland, a wavering NATO ally, used its strategic importance to NATO during the Cold
War as leverage in order to successfully extend its fishery limits in the Cod Wars against Britain,
West Germany, and Belgium (Guðmundsson, 2006; Steinsson, 2016, FORTHCOMING). Thus,
being small and important can give small allies the leverage they need.
Large allies also have less action space than small allies, as the small allies can free-ride on the
alliance without any broader implications for the sustainability of the alliance. Large states cannot
free-ride to the same extent without undermining the deterrent effect of the alliance (Olson &
Zeckhauser, 1966). There are similar findings for small states involved in trade disputes. Wolford
and Kim (FORTHCOMING) find that large states are unlikely to retaliate against their smaller
allies when the latter implement protectionist policies. Being small and unimportant can therefore
be a blessing, as those small states are out of sight, out of mind, and do not have to oblige by the
same commitments and norms as other allies.
To meet their economic, political, and societal needs, it has been argued that small states seek
“shelter.” Many of the actions of small states listed above can be placed, in one way or another,
within the framework of shelter theory. Shelter is an alliance relationship where small states
alleviate their political, economic and societal vulnerabilities by allying with large states and
joining international or regional organizations (e.g., Bailes, Thayer, & Thorhallsson, 2016;
Thorhallsson, 2011). This happens because small states need diplomatic, military, and
administrative assistance from these larger units; in order to both integrate economically and
receive economic assistance in times of crisis; as well as to ensure access to innovations, culture,
and ideas that a small population cannot provide on its own. To obtain these goods, small states
are willing to surrender far more sovereignty than large states would be. This is because the
prospects for survival and prosperity in small states are closely linked to having access to these
goods (Bailes et al., 2016).
Strategies of Small Diplomatic Forces: How to Compensate for
Among the chief weaknesses of small states are their smaller diplomatic forces and resources. To
compensate for these political and administrative problems, small states need to develop special
strategies in order to defend their interests and have a say in the international system. Small states
must turn the special characteristics of possessing small public administrations and foreign
services into advantages. They need to develop administrative competence based on distinctive
features of small public administration such as informality, flexibility, and greater autonomy of
officials, as compared with large public administrations. Small states have also successfully used
the strategies of prioritization, coalition-building, and image-building to exert influence.
To compensate for their lack of diplomatic resources, broad-based expertise, and aggregate
structural power, small states need to prioritize their efforts in order to have any influence at all.
This means that they tend to focus on policy sectors of great importance and/or where direct
benefits can most likely be gained (Panke, 2010; Thorhallsson, 2000). On these issues, the small
states are proactive and expend considerable resources (Thorhallsson, 2000). In other words, small
states may compensate for their aggregate structural power disadvantage with greater issue-
specific power (Habeeb, 1988; Tallberg, 2008). Through a willingness to direct more resources to
specific issues, small states can exert as much or even more influence than large states. A failure
to influence a broad and diverse set of issues is not necessarily a huge downside for small states,
as most they will have a limited set of issues that are of great diplomatic and economic importance
to them. For instance, Luxembourg prioritizes policies that relate to its significant financial sector
while it leaves its more inconsequential security policy to larger states within the EU. On the other
hand, the Baltic states direct far greater attention and resources toward influencing security policy
within NATO and the EU, due to their more pressing security concerns (Thorhallsson, 2015). On
issues of lesser importance, the small states are more reactive and flexible. Due to their narrower
range of economic and political interests, they find it easier and more natural to prioritize issues
than large states.
As a consequence, it is perhaps inappropriate to equate small states’ failure to influence issues of
little importance to them as a sign of weakness; it could rather be thought of as rational disinterest.
This may be one possible explanation (Brown, 2013; Arregui & Thomson, 2009, pp. 670–671) for
why small states appear to have favorable bargaining outcomes in EU negotiations relative to large
states (Cross, 2013, p. 86; Mattila, 2006; Slapin, 2008; Thomson, 2008). Unlike the latter, which
will attempt to obtain compromises on a large swath of issues important to its citizens and interest
groups, a small state has the freedom to agree to compromises with other states on a large number
of unimportant issues in exchange for highly favorable outcomes on the few issues that the state’s
citizens and interest groups prioritize.
Small states direct all their resources to the few affairs in which they have major stakes and leave
others to the side. For instance, Luxembourg can be expected to provide the requisite expertise in
order to deal with financial regulations, and Norway can be expected to provide sufficient forces
to extract favorable outcomes from negotiations involving oil and gas. It is important to note,
however, that some small states are too small or poor to develop sufficient expertise on and commit
resources to even the issues of greatest importance to them. To compensate for the disadvantages
of small administration, small states have been known to rely on the expertise of larger states on
niche issues on which they share preferences, build coalitions with other small states, or develop
ties with technocratic bodies of international organizations. For instance, Corbett and Connell
(2015) recount the challenges that small Pacific states have in exerting influence within the UN on
pressing concerns, such as climate change. To maintain permanent missions in New York, several
of these small island states share offices with Australia. Luxembourg has been known to let
Belgium represent it in EU meetings (Thorhallsson, 2000) and cooperated extensively with the
Netherlands when it held the now-defunct rotating presidency on the European Council
(Thorhallsson, 2006; Van den Berg, 1994).
Additionally, small states can take advantage of their flexible, autonomous, and informal
diplomatic forces. Unlike their larger counterparts, their bureaucracies can make decisions rapidly.
Decision-making often occurs informally, as officials tend to know each other (even the lowest-
ranking and highest-ranking officials) and make joint decisions through informal meetings. On
many issues, small state diplomats have the autonomy to act apart from their national governments.
That being said, in reference to issues of the greatest importance, decision-making occurs in a more
formal manner with written instructions and extensive meetings. However, it is important to note
that these decisions still occur in an environment where they are formed relatively quickly. In their
diplomatic dealings, small state diplomats have a lot on their plate. They make a wide array of
decisions and perform many of the duties that tend to be distributed among multiple officials and
even ministries in large states. In many cases, diplomats from small states therefore can speak
more authoritatively and credibly because they have the autonomy to make their own decisions
Small states also benefit from the perception of their image as neutral and peaceful, doubtless one
consequence of their weak aggregate structural power. Neutrality and a peaceful image give small
states the fact-finding, investigative, and mediating duties that other states would usually only
entrust in neutral and non-threatening states. Small states may also develop soft power through
their attractive culture, admirable values, and successful domestic arrangements. Soft power is the
ability to get others to want what you want through appeal and attraction rather than coercion (Nye,
1990). Most importantly, it is within small states’ reach to develop soft power, whereas they will
never be able to compete with larger states in regard to hard power. Thus, soft power provides both
economic benefits (Rose, 2015) and diplomatic clout. The Nordic states have exerted
disproportionate international influence through soft power on issues such as the environment,
human rights, women’s rights, conflict resolution, and humanitarian and development issues
Small States in International Organizations
Small states rely on multilateral organizations more than their large counterparts. Within the
functions of international organizations, small states benefit the most (see also Neumann & Gstöhl,
2006). These include the gathering, analysis of, and dissemination of data; forum for exchanges of
views and decision-making; the defining of norms; the creation of rules; the monitoring and
enforcing of rules; the settling of disputes; and the allocation of resources, provision of assistance,
and deployment of forces (Karns & Mingst, 2004). Of far less importance to large states, the
information-conveying aspect of international organizations is key to small states, giving them
research and analysis that they would have a hard time creating and collecting for themselves, as
well as invaluable information about other states’ preferences and actions. The secretariats of
international organizations not only provide practical benefits to small states in the form of
information, they can also serve as an avenue of influence. Many small, rich, democratic states are
disproportionately represented in the UN Secretariat (Novosad & Werker, 2014), which gives them
a meaningful influence on the UN, since the Secretariat strongly shapes the content of resolutions
debated in UN bodies and implements decisions made by those same bodies. The Nordic states
have been very successful in placing their nationals in high-ranking positions within various parts
of the UN system over time (Thorhallsson, 2012).
Also of importance to small states is the reduction of transaction costs that comes with bringing
states, experts, and interested parties to the same fora. This allows small states, with their limited
resources, to access information, learn best practices, form relationships, coordinate with other
states, and strike deals that they otherwise could not. Small states cannot set up diplomatic missions
across the world or form robust relations on a state-by-state basis due to their limited resources,
thus multilateral fora help to fill these gaps.
By alleviating collective action problems, international organizations facilitate cooperation
between states and reduce competition and conflict in the international system. Small states stand
to gain the most from a highly institutionalized, cooperative, and peaceful international system.
International organizations set clear standards of what counts as cheating, and they prescribe the
requisite punishment for cheating as well as monitoring state compliance with these rules.
Furthermore, international regimes reduce the transaction costs of diplomacy by bringing actors
into one forum in order to exchange views and make decisions, build upon previous agreements
and fora (preventing states from having to revisit the same problems in every agreement), and
more cheaply punish cheaters. This makes the commitments of states more credible and facilitates
the operation of reciprocity (Keohane & Martin, 1995, 2003).
Authoritative rules, which are agreed upon and enforced by dominant states, despite being biased
toward these dominant states, allow for the small states, which find themselves positioned within
these hierarchies, to escape some of the worst effects of anarchy (Lake, 2009, p. 100). To the extent
that international organizations pacify state relations and help resolve civil wars and interstate
disputes, small states stand to benefit more than large states from the peace and stability that
international organizations generate. There are both rationalist and constructivist reasons as to why
large states seek the consent of smaller states or comply with decisions reached in international
organizations. Large states have domestic reasons to acquire the consent of the international
community when making consequential decisions or actions (Voeten, 2005). Large states are also
willing to restrain their own power in order to retain their privileged position in international
organizations (Ikenberry, 2001) and facilitate the operation of reciprocity (Keohane, 1984;
Keohane & Martin, 1995, 2003). Furthermore, large states can be encouraged to comply with rules
and norms, in part due to their desire for legitimacy. These organizations, by creating a web of
rules, an environment of debate and compromise, and punishing rogue states, chiefly benefit small
states. Accordingly, small states typically prefer multilateralism over bilateralism.
Small States in the European Union
There has been considerable research on small states within the EU and how they can influence its
decision- making, if at all. Small states use several strategies to exert influence. For instance, the
Nordic EU member states have been identified as influential in terms of soft power (Björkdahl,
2008; Grøn & Wivel, 2011; Ingebritsen, 2002; Jakobsen, 2009; Kronsell, 2002; Magnúsdóttir,
2009; Ulriksen, 2006). Due to fewer direct interests (Arregui & Thomson, 2009, p. 670) and the
persistent use of soft bargaining tactics (Dur & Mateo, 2010), small states are more likely to be
perceived as neutral, trustworthy, and compliant value-creators in negotiations. Findings by Naurin
and Lindahl (2010) and Dur and Mateo (2010) also suggest that several small EU member states
are as good at networking as the large member states, despite limitations in administrative
resources and aggregate structural power.
Small states face structural disadvantages within EU institutions due to the uneven allocation of
votes in the Council of the European Union, their limited number of seats in the European
Parliament, and the smallness of both their public administration and foreign service as compared
with the large states. The Council reflects a balance between small and large member states, but
recent treaty changes have altered the amount of influence small states can wield during the
Council’s decision-making processes. The introduction of qualified majority voting (which
requires that decisions are supported by 55% of member states and that they represent 65% of the
EU population) in most policy areas arguably makes it easier for large member states to form
successful coalitions. Under unanimity or simple majority voting, small member states had, at least
on paper, greater means to prevent unfavourable proposals from getting passed. The creation of a
permanent Council president and the loss of the rotating presidency have also removed one
pathway for small state influence, in that holding the rotating presidency was useful for shaping
negotiation outcomes. It has also been argued that the large EU member states increasingly
cooperate with each other on an ad-hoc basis outside of the Council, leaving small states
predominantly out of decision-making processes (Grøn & Wivel, 2011).
Panke (2010) argues that small states within the Council compensate for their lack of individual
bargaining power through regional coordination and by partnering with individual big member
states. Small states can furthermore use the reputational power which comes with holding the
rotating presidency as well as use prioritization strategies to exert influence. In explaining the
varying levels of activity of small states, Panke (2010) finds that the most active states tend to be
those that are the oldest EU member states, that have held the presidency, and that have high-
quality administrations and bureaucratic cultures. Interestingly, different levels of support for
European integration and the benefits of EU membership have no noticeable effect on the activity
level of different EU member states (Panke, 2010).
Furthermore, small states tend to rely on the European Commission when working both in its own
committees and in the Council. This is because small states lack the domestic administrative
capabilities to gather information in the policy areas of limited domestic importance and they are
in greater need of Commission expertise and guidance in negotiations within the Council than are
large states. As a result, small states tend to cooperate with the Commission, whereas the large
states are much more confrontational towards it (Thorhallsson, 2000).
Small states use the special characteristics of small state administrations to their advantage. For
instance, diplomats working in the EU from small administrations are more flexible, informal, and
autonomous (Thorhallsson, 2000). This might give small states a boost when it comes to individual
sources of power since their diplomats can more easily use personal relations with other diplomats
and develop personal authority, something which Tallberg (2008) shows to be a prominent feature
of EU-level negotiations. For example, when it comes to EU legislation, the same official may be
involved in domestic policymaking on a given issue, as well as contributing to the formation of a
state’s position on a proposed piece of EU legislation on that issue, negotiating on behalf of the
state on that issue within the EU, making the final decision on behalf of the state on a proposal on
that issue in the EU, and then participating in the implementation of that EU policy in their home
country (Thorhallsson, 2000). The informality, flexibility, and authority of these diplomats can
help them form special relationships with diplomats from other states and EU-level officials, which
can lead to greater influence (Grøn & Wivel, 2011; Panke, 2010; Tallberg, 2008; Thorhallsson,
Small states, through the informality and flexibility of their administrations, can develop a close
working relationship with the Commission. It is, for example, often the case with small states that
a limited number of their officials, even as few as one or two people, will be in direct contact with
Commission officials regarding any given proposal. Since there will often be only one rapporteur
dealing with the particular proposal on the Commission side, communication between the small
states and the Commission may be quicker and smoother than it could have been between the large
states and the Commission. Forging a close relationship with the officials of small states also
makes sense for the Commission, due to their autonomy and flexibility. Small state officials can
therefore be attractive partners, as they increase the efficiency of the Commission. Thus, it is
essential for small member states to put effort into building relationships with Commission
officials, as it is an effective way of getting one’s views incorporated in the Commission’s policy
proposals, and thus influencing EU-level outcomes.
Furthermore, it is far easier for the Commission to satisfy the needs of small states and obtain their
support for policy proposals than it is to persuade a big state. For instance, it is much cheaper for
the Commission to increase milk quotas in Ireland compared with Italy. The ease with which the
Commission can “buy off” small states compensates for the fact that large states are more valuable
coalition partners for the Commission in the Council than a small state. In addition to the
aforementioned strategies, small states try to exert influence at the early stages of the negotiation
process within the Commission (Thorhallsson, 2000). Technical propositions at these early stages
are an effective way to shape the eventual proposal. For instance, Grøn (2014) argues that Denmark
and Sweden can impact legislation considerably if they try to influence the Commission’s
proposals in their initial states and provide technical input. Accordingly, small states can
effectively lobby the institutions of the EU, such as the Commission (Bunse, Magnette, &
Nicolaïdis, 2005; Naurin & Lindahl, 2010).
There are also good reasons to believe that holding formal positions within the EU can be an
important way for small states to exert influence. Gehring and Schneider (FORTHCOMING), for
instance, find that the nationalities of the Commissioners of Agriculture are associated with
increased shares of the overall EU budget for their country. Killermann (2016) also finds that
member states are less likely to cast votes against proposals by co-national Commissioners, which
suggests that those Commissioners are more likely to promote the interests of their home country.
Commissioners are, at the very least, not purely unbiased or immovable technocrats.
Even though practitioners in the EU believe that large states achieve more favorable outcomes
than small states (Panke, 2010), existing research casts some doubt. It is hard to measure success
in negotiations due to the complexities of EU decision-making (e.g., several EU bodies, different
negotiating stages, backdoor negotiations, logrolling), the difficulties in measuring and thinking
about asymmetry between member states, and the difficulties in gauging whether member states’
stated positions take account of power asymmetry (i.e., small states adopt initial positions that are
further from their preferences in an effort to achieve a compromise and influence proceedings).
However, there is considerable research that suggests either that the size of member states has no
impact on outcomes (Arregui & Thomson, 2009, pp. 670–671; Thomson, 2011, p. 249) or that
small states actually achieve more favorable outcomes (Bunse et al., 2005; Cross, 2013, p. 86;
Mattila, 2006; Slapin, 2008; Thomson, 2008). These findings, at the very least, suggest that large
member states do not dominate proceedings in the EU and that small member states can have some
The Pursuit of Ideational Versus Practical Benefits
Scholars debate the extent to which small states seek practical, material benefits versus ideational,
status-oriented benefits. Neorealists have often argued that small states act in ways more consistent
with a neorealist logic, as small states lack the margin of time and error that large states have and
are consequently more bound to following structural incentives (Jervis, 1978; Schweller, 1992;
Snyder, 1991; see also the literature reviews by Elman, 1995; Hey, 2003). In other words, large
states can make mistakes without it having existential consequences for the large states, whereas
small states cannot afford to do so.
There are very few attempts to match up neoclassical realist versus neorealist expectations in
regards to the case of small states. There is, however, some indirect evidence to suggest that small
states are more responsive to structural incentives than large states. Teorell and Rothstein (2015),
for instance, show that the Swedish bureaucracy undertook extensive administrative reforms to
better ward off the existential threat of Russia after the Swedish defeat in the War of 1808–1809
(the Finnish War). Koyama, Moriguchi, and Sng (2015) also show that a relatively smaller Japan
unified and modernized as a response to the existential threat posed by Western states while a
relatively larger China disintegrated. Unable to find sufficient peace and free trade, small states
have on occasion formed federations with one another to alleviate their joint vulnerabilities to
external coercion from powerful states. The United States, Switzerland, and Germany have been
cited as such examples (Gilpin, 2001; Riker, 1987).
Thus far, the conventional wisdom has purported that small states cannot afford to have their
leaders make mistakes or take needless risks, since they are less able to recover from setbacks.
Elman (1995), however, challenges the notion that small states cannot pander to domestic interests
at the expense of foreign policy. Steinsson (FORTHCOMING) shows how Iceland, during the Cod
Wars, chose a suboptimal and risky foreign policy as decision-makers bowed to public pressure,
miscalculated threats, and took needless risks in their efforts to expand the Icelandic fishery limits.
De Carvalho and Neumann (2015) challenge the assumptions behind the aforementioned
discussion, as they show in the case of Norway that small states do not merely pursue practical or
material benefits but also pursue ideational goals. Small states seek “status,” just as their larger
counterparts do (Wohlforth, 2015). The pursuit of ideational goals necessarily distorts the
neorealist notion that states pragmatically pursue material benefits and follow structural incentives.
Finally, many of the problems that small states face could certainly be solved by becoming large
states, either by expanding or by merging with other states. However, as Alesina and Spolaore
(2003) show, the benefits of size come at a cost of preference heterogeneity: a larger population
and more diverse interests lead to greater disapproval among citizens and interest groups about the
policies of the central government in a large state than in a smaller one. This is one stumbling
block toward ever-expanding states; in fact, as the benefits of size are decreasing (a more peaceful
world creates less need for military power and a more open international economic system, which
makes states less dependent on domestic markets), Alesina and Spolaore (2003) suggest that states
will grow increasingly smaller.
Deudney (2007) likewise notes how the shift from small political unit to large political unit often
meant a shift from republicanism to despotism. In paraphrasing Montesquieu, Deudney describes
the dilemma of republics (the two iron laws of polis republicanism) as “if a republic be small, it is
destroyed by a foreign force; if it be large, it is ruined by an internal imperfection” (Deudney,
2007, p. 93). Deudney (2007, p. 93) writes, “[b]ecause republics had to be small, they were
vulnerable, tended to be rare, and had to be martial to survive. But if they expanded through
conquest, as did the Roman Republic, then they would inevitably become despotic monarchies.
This line of argument emphasizes that the fundamental character of ancient city-state republics
was defined—and severely circumscribed—by the interplay between security requirements,
political practices and structures, and material contexts.” This is precisely why “hiding” was the
common foreign policy of the old city-republics, as it prevented them from becoming despotic
while still offering modest protection against external threats (Deudney, 2007, p. 58). He also cites
“cobinding” as a wise policy, where the republics joined with each other in an alliance (Deudney,
2007, p. 58). One of the reasons why small states survive and prosper today is precisely because
of the cobinding of liberal democracies—large and small—in a complex web of rules that gives
each member security from external violence without having to give up independence and
To summarize, small state foreign policy choices and outcomes are consequently influenced by
the international environment at any given time. All else being equal, small states have greater
foreign policy options and achieve better outcomes in international environments which are
peaceful, stable, and institutionalized. In more restrictive environments, small states will have
fewer foreign policy options and less successful outcomes. Thankfully for small states, it has never
been as easy being small as it is in the current international system with its unprecedented degree
of peace, economic openness, and institutionalization. Small states can and do influence world
politics in an international system as permissive as the current one. While small states remain
highly constrained by their size, there is considerable leeway for maneuver. Small state influence
is, however, contingent on the time, effort, and resources that small states put into diplomacy.
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