The quest for economies of scale

Is it disadvantageous to be a small country?  Singapore seems to have done just fine.  But if economies of scale matter for geographic (as opposed to legal) reasons, we might expect small countries to cluster their populations in one central location.

In the case of New Zealand, Auckland became the largest city in 1886.  Since then it has grown in size relative to Christchurch, Wellington, and Dunedin.  In 1951, Auckland was only 50 percent larger than Wellington.  By 1996, Auckland was three times as big as either Wellington or Christchurch.  The Auckland metropolitan area now accounts for about one third of the country, in either population or economic terms, and is likely to grow in relative terms.  It is considered New Zealand’s major city.

The above facts are from James Belich’s Paradise Reforged: A History of New Zealanders from the 1880s to the Year 2000.

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