| Summary: | This is a comparative study of the two small island states of Iceland and Malta in 1960-2000. It focuses on the role of the two governments as they enacted public policies, intervened in the functioning of their economies and foreign trade, invested in infrastructure, enhanced human capital and developed welfare states. The governments aspired to boost economic growth, improve quality of life, raise living standards, increase exports, combat recessions, create jobs, reduce trade and economic volatility, reap political gains and advance foreign relations. The thesis compares economic and political developments and their interplay, advancing international relations and different routes to European cooperation. With their emerging public sectors, political systems, and political customs and conflicts, both island states tried to secure their rights, livelihoods and positions amongst other European nations. Around 1960, Iceland´s economy was relatively advanced compared to Malta. Iceland was a financially self-standing republic, financing growth through exports, foreign loans, Marshall Aid and locally accumulated capital; and gifted with prolific fishing grounds and rich renewable energy resources. The national economy was vulnerable due to dependency on the volatile fishery and its export markets. However, Iceland could not yet control and manage the fishing grounds, as they were open for foreign deep-sea trawlers until the mid-1970s. Iceland maintained its focus on developing the fishery further during the last quarter of the twentieth century but with parallel government-driven developments in the power sector, while foreign investors built the associated power-intensive industries. A transferable quota system was introduced and shaped in the fisheries from 1984 to the 1990s. The new system increased efficiencies and labour productivity and reduced the over-capacity of fleet and plants. The 1970s and 1980s were marked by slack macroeconomic policies - hyperinflation, frequent devaluations of the ISK, rampant ...
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