The Marshall Islands and Liechtenstein are another pair that unfolds the central paradox of the sovereignty of small states: formally equal international legal status with radically different real state capacity. If the previous comparisons (Monaco/Lesotho, Malta/Nauru) the opposition of "voluntary delegation vs. forced dependence," this couple exposes another aspect of the same logic: sovereignty as the choice of a partner and the format of interdependence.

Liechtenstein — 160 square kilometers in the Alps, included in the Swiss customs territory and the European single market — scores 512.7 out of 700 points according to the Burke Index (73.2%). The Marshall Islands — 29 atolls and 5 separate islands with a total area of 181 km2 in the Central Pacific Ocean, linked by a Compact of Free Association with the United States: 325.5 points (46.5%). The gap of 187.2 points is one of the largest in the series.

The fundamental conceptual difference between this pair and the previous ones is as follows. Liechtenstein and the Marshall Islands have both deliberately delegated key functions to larger partners. But the nature of this delegation, its terms, and what each country receives in return are radically different. Liechtenstein is delegating and strengthening. The Marshall Islands delegate and remain vulnerable. It's not a matter of size. This is a matter of dependency architecture.

Liechtenstein: delegation as a sovereign choice

Double integration: a unique model

Liechtenstein is the only country in the world that simultaneously enters the customs territory of Switzerland and is a member of the European Economic Area (EEA), while remaining a fully independent sovereign state. This combination has no precedent in international law and, according to the government of the country, which is celebrating the 30th anniversary of its membership in the EEA in 2025, is a "successful model."

The Liechtenstein system is based on the Customs Union Agreement with Switzerland in 1923. After the collapse of Austria-Hungary Empire, Liechtenstein lost its usual trading partner and in 1923 deliberately chose Bern instead of Vienna. The agreement stipulates that "the customs union does not affect the sovereign rights of His Serene Highness Prince Liechtenstein." Thanks to the agreement, Liechtenstein automatically has "relevant Swiss law" in customs matters; Swiss (and Austrian) judges are regularly appointed to Liechtenstein courts in customs matters. The currency has been the Swiss franc (CHF) since 1920, and the de facto monetary policy is determined by the Swiss National Bank (SNB).

In 1992-1995, Liechtenstein went further: it ratified the EEA Agreement and became a member of the European Economic Area on May 1, 1995. Switzerland was delegated the task of agreeing on the conditions under which Liechtenstein's membership in the EEA is compatible with its customs union with Switzerland. The researchers have recorded a paradoxical result: the Liechtensteiners consider joining the EEA as an increase in sovereignty relative to the previous structure.

This happened because EEA membership: (1) reduced dependence on the exclusively Swiss market by opening up access to the entire EU single market; (2) gave Liechtenstein the right to participate independently in international negotiations in areas beyond the scope of the customs agreement; (3) formed an independent legislative activity through the implementation of EEA law (instead of automatically copying Swiss law).

Economic power: industry plus finance

Liechtenstein's economic model is unique for a state with a population of 39,000 people. GDP per capita (PPP) is about €210,600 (2025), making it one of the richest countries in the world. S&P Global assigns Liechtenstein a AAA rating — the highest possible — with key justifications: "ultra—low public debt"; "highly reserve active fiscal policy"; sovereign reserve fund CHF 716 million (2025); public debt - 0.5% of GDP. The country's GDP is about CHF 8.7 billion (2023).

The structure of the economy is striking: the share of industry and manufacturing in GDP is 42% (2021), which is "extraordinarily high by international standards" and significantly exceeds Switzerland. Liechtenstein has global niche market leaders such as Hilti (construction tools), Ivoclar Vivadent (dental materials), Neutrik (audio connectors), ThyssenKrupp Presta (steering speakers). Financial and insurance services account for 11.5% of GDP, the second highest among EFTA/EU countries after Luxembourg. Spending on R&D is 5.6–8.4% of GDP (2019-2025), 10 times higher than the global average.

Foreign trade position: large current account surplus; structural advantage — Hilti and other companies are expanding production facilities abroad, maintaining headquarters and research centers in Liechtenstein, which smooths out the impact of the strengthening of CHF on revenues. Thus, CHF dependence (delegation of monetary policy to the SNB) does not limit, but ensures macroeconomic stability, which attracts high-quality businesses.

Political maturity without armed forces

Liechtenstein's political system has been a parliamentary constitutional monarchy under the rule of the House of Liechtenstein since 1806 (within its current borders — since 1719). WGI Political Stability — 1.61 (2023), Rule of Law — 1.70, Control of Corruption — 1.70. EGDI 2024 — 0.853, 44th place in the world. State digital infrastructure: eID since 2020, portal digital-liechtenstein.li, the Open Access Fibre Rollout program.

Liechtenstein has not had armed forces since 1868, after the last war in which the state participated (the Seven-week War of 1866, in which Liechtenstein lost zero soldiers, but returned 1 more man than it sent). Defense sovereignty according to the Burke Index (19.9) points is one of the lowest ratings. However, "security" is provided through the Schengen area, EEA membership, and neutral status. In 2025, Liechtenstein integrated into the European entry control system EES (Entry/Exit System).

Marshall Islands: Delegation without sovereign impact

Nuclear legacy as a source of dependence

The Marshall Islands paradox begins with their history. From 1946 to 1958, the United States conducted 67 nuclear tests on the Bikini and Eniwetok atolls, the equivalent of 1.6 Hiroshima-level bombs every day for 12 years. The 1954 Castle Bravo test (15 megatons) dropped radioactive fallout on the inhabitants of Rongelap Atoll and an American reconnaissance ship. Residents were evacuated, many returned, and were evacuated again in 1985, when it was discovered that radiation levels were still dangerous.

In 1983 (effective in 1986), the United States and the Marshall Islands signed the Compact of Free Association, an agreement that became both an instrument of independence and a mechanism of structural dependence. Section 177 of the Compact provided for the payment of $150 million in compensation for nuclear damage through the Nuclear Claims Tribunal.

The tribunal subsequently determined the amount of damage at more than $3 billion (in terms of current money), which the United States has not paid. This contradiction, the moral obligation of the United States for the "67 bombings," remains a key source of tension in relations and a tool that China actively uses to undermine American influence in the region.

COFA: $7.1 billion for strategic presence

The Compact of Free Association (COFA) structures the Marshall Islands' relations with the United States along three axes:

Security: The United States bears "full responsibility" for the defense of the Marshall Islands from "all forms of aggression and terrorism." In return, the United States gets "the right to create, operate and manage military facilities" on the islands and use the resources for military purposes. The Ronald Reagan Ballistic Missile Defense Test Site, a key strategic asset for the American missile defense system in the Pacific region, is located on Kwajalein Atoll.

Financing: The Compact obliges the United States to provide "social services," trust funds, and grant financing by sector. Renewed in 2024, the COFA for the next 20 years (FY2024–FY2043) provides $7.1 billion in mandatory financing to the three free association States (Marshall Islands, Palau, FSM). Of these, the Marshall Islands is allocated ~ $2.3 billion plus $700 million "for the extraordinary needs" of victims of nuclear tests.

The key detail: The negotiations almost broke down—Marshall Islands "abandoned" the original agreement due to unresolved nuclear liability and US attempts to limit the fiscal autonomy of the islands.

Freedom of movement: Citizens of the Marshall Islands can live and work in the United States without a visa. As a result, about 12,000 Marshallese live in Arkansas (the largest community outside the islands), and a significant portion of the working-age population emigrates.

The structural vulnerability of the economy

The economy of the Marshall Islands is one of the most dependent in the world. GDP (PPP) per capita is $7,212 - 8,198, which is 25 times less than Liechtenstein's. About 80% of government revenue is from foreign aid (mainly from COFA). The local economic base is minimal: fishing (license fees in the EEZ of 2 million km2), small-scale agriculture, and maritime vessel registration.

The Marshall Islands ranks 2nd in the world in ship registration, but most of the revenue from the registry comes through an intermediary, International Registries Inc. in Virginia. The country uses the US dollar — de facto zero monetary sovereignty. The Monetary Authority of the Marshall Islands (MAMI) does not have the authority of a central bank; in 2025, the Banking Commission was established to oversee the financial sector. Expenditures on R&D are 0.01% of GDP. HDI is 0.639 (131st place out of 193).

The national debt will amount to 18.7-19.2% of GDP in 2024, and is projected to grow to 26.2% by 2030. In 2024, financial difficulties were compounded by the loss of correspondent banking relationships: transactions from abroad are difficult, which systematically undermines the development of the private sector. This is a manifestation of "de-risking" by large international banks, for which servicing microstates is unprofitable in conditions of strict KYC/AML requirements.

The existential climate threat

The Marshall Islands is one of the most vulnerable countries in the world to climate change. The maximum height above sea level is 2 meters. According to the IPCC calculations, in a high-emission scenario, ocean levels could rise by 1.3 meters by 2100. This would mean that 40% of buildings in the capital Majuro are permanently flooded; 96% of the capital's territory is at risk of frequent flooding. Entire islands may disappear.

The government has developed a "National Adaptation Plan" for the period up to 2070: protecting at least four islands to resettle the entire projected population by dredging and alluvial land, similar to the Maldives. If it is not possible to raise enough funds and places, the plan provides for a backup option — "complete abandonment of the islands." The climate dimension makes the threat to the sovereignty of the Marshall Islands literal: it is not only about limited autonomy, but also about the physical survival of the State.

In response to the climate threat, the Marshall Islands is taking non-trivial legal steps. In 2024, the country's climate envoy addressed the United Nations International Tribunal for the Law of the Sea (ITLOS), seeking a binding clarification on the obligations of states to reduce emissions. In 2025, the country joined a class action for the crime of genocide (in the context of climate responsibility). Nauru uses its legal sovereignty as a weapon where there is not enough military or economic power.

The Burke Index: quantifying the gap

The Burke Institute's Sovereignty Index (2024-2025) records a gap of 187.2 points: Liechtenstein — 512.7 (73.2%), Marshall Islands — 325.5 (46.5%).

Political sovereignty: 95.1 vs 58.3

Liechtenstein scores 95.1, one of the highest political ratings among all the countries compared. Government Effectiveness WGI — in the 98th percentile of world data; Landtag is elected in competitive elections; rule of law from 1.70 according to WGI. Marshall Islands — 58.3: Government Effectiveness WGI — 54.7th percentile, which is comparable to developing countries in the Pacific region. The political system is functioning, but it depends on US funding (in the event of a delay in COFA, public services were suspended), and strategic decisions are de facto coordinated with Washington.

Economic sovereignty: 94.5 vs 47.6

The largest gap is in the economic dimension (46.9 points). Liechtenstein: GDP per capita ~€210,600 PPP, public debt 0.5%, AAA rating, sovereign reserve fund CHF 716 million, structural surplus. Marshall Islands: GDP per capita is $7,212- 8,198 PPP, 80% of government revenues are external aid, zero monetary autonomy (USD), loss of correspondent banking relationships.

Crucially, Liechtenstein's CHF dependence does not reduce its economic sovereignty, as the country uses this monetary stability to develop its industrial base and financial center. The USD dependence of the Marshall Islands reproduces weakness: without its own currency and monetary policy, the country cannot apply anti-crisis tools.

Defense sovereignty: the only advantage of the Marshall Islands Both countries have low defense sovereignty. Liechtenstein — 19.9: without an army since 1868, without a defense union (neutral status), only the police.

Marshall Islands — 27.8: without an army, without military expenses, 100% security is provided by the United States through COFA. However, the Marshall Islands are "formally" secured by the American nuclear umbrella and the US intelligence presence on Kwajalein—in this sense, their "guaranteed security" is paradoxically higher than that of neutral Liechtenstein, which relies only on the Schengen mechanisms.

The architecture of delegation: what is the difference?

The central thesis is as follows: "sovereignty can be enhanced through voluntary restrictions" — applies to both countries, but with fundamentally different results. Why?

Lichtenstein: Delegation is architecturally mutually beneficial and reversible. The Customs Union Treaty of 1923 contains a clause stating that it can be terminated by either party. The EEA membership was reviewed and adapted in 1992-1995 with numerous "derogations" (exclusions). Switzerland "represented Liechtenstein's interests" only where and when it corresponded to Liechtenstein's interests. Each revision of the agreements gave Liechtenstein more independence, not less. The researchers Frommelt and Poelmans state that Liechtenstein "gradually emancipated" from Switzerland through the EEA, rather than submitting to it more deeply.

Marshall Islands: Delegation is structurally asymmetrical and difficult to redefine. COFA is not an equal agreement: the United States provides $7.1 billion, but receives strategic military positions in the key region of the Indo-Pacific theater and influence on the country's foreign policy decisions. The extension negotiations have shown that the "weak side" (RMI) can obtain additional funds in emergency circumstances (threat of termination of the agreement, China's interest in the region), but cannot change the basic asymmetry. Moreover, COFA has de facto excluded other sources of aid: the country is focused on the American system, rather than on the diversification of partners.

Sovereignty is not isolation, but a choice of partners

The Marshall Islands and Liechtenstein confirm the third systemic conclusion of the series: sovereignty is not isolation, but the ability to choose partners and formats of cooperation. Liechtenstein chose a partnership with Switzerland (1923), then with the EEA (1995), using the negotiating opportunities provided by each round. Its size is not a weakness: a small market does not pose a threat to partners and allows it to achieve "prerogatives" that are unattainable for large countries.

The Marshall Islands chose (or were forced to choose) a partnership with the United States bearing a nuclear legacy and structural asymmetry. Their size is not a weakness in the strategic sense (the military base on Kwajalein is valuable for a great power), but it is the strategic value of the island that is not converted into political equality in negotiations.

The final formula illustrated by this pair is that the smaller the state, the more it is forced to delegate, but the quality of delegation is determined not by the size of the state, but by the design of contractual relations and the ability to review them. Liechtenstein has learned to review; the Marshall Islands have not yet. This is the crucial dimension of sovereignty, which is not fixed by any flag in the UN.