[sph]

Thanks for the sources. At first sight, I think there are many factors at play, and these sources are mistaking cause for effect. Most prosperous countries are large, but simply because a large state can raise much larger amounts of money, that if wisely used can be allocated to long term investments that improve prosperity. This does not mean that they are prosperous because they are efficient. My thesis is that they are prosperous despite being utterly wasteful.

In fact, there are many small but rich countries that have very high quality of life, like Switzerland, Britain, Netherlands, Hong Kong to name a few.

It becomes like a U curve where you either are small, or have to grow very very large for waste not to impact prosperity too much.