Question

Consider the difference between Liechtenstein’s per capita GDP and the per capita GDP of the U.S. Chances are you have never heard of the country of Liechtenstein, so you may be surprised that such a small country can have a significantly higher per capita GDP than the U.S. Using at least two outside sources, research why Liechtenstein’s per-capita GDP is so high. To be sure your sources are reputable, follow these guidelines when searching: The author of the source should be clear. The author should have expertise in the field the person is writing on. For instance, if you are reading a source on an environmental issue, the author should have research experience with the topic. The source should be academic, meaning it is published by a respected site or source in the field of study (e.g. official government or university Web sites, academic journals, or reputable news sources). The source should not state opinions as facts. The source should clearly cite its sources and should not include dated information. In a brief paragraph, explain why Liechtenstein’s per-capita GDP is so high. Cite your sources, explain why your sources are reputable, and summarize the strengths and weaknesses of each source.

Answer 1

The sources are various documents written by the OECD: The Organization for Economic Co-operation and Development, and official sources made by the Government of Liechtenstein.

There are many reasons why Liechtenstein has such a high GDP Per capita. The first reason is its political system, which is surprisingly federal, even for such a small state. This means that the different municipalities of Liechtenstein compete among themselves for investment and development, for example, by offering lower tax rates.

The second reason is precisely the economic incentives that the country offers to private businesses. Relatively low taxation, very good infraestructure, well-educated human capital, and closeness to the wealthy markets of Germany, Switzerland, and Austria are among the economic incentives that make Liechtenstein a country with more companies registered (around 70,000) than inhabitants (around 38,000).