The aim of this paper is to examine the normative justification of 'small' and 'micro' state behaviour. Whatever theoretical position one assumes in order to examine the issue of small state performance, some pertinent facts appear fairly consistent including their vulnerability to external forces, inability to interact effectively with the outside world, and relative backwardness. Adopting a comparative approach for the consistent elaboration of the analysis, this article concentrates on Bhutan, Nepal and the Maldives. Its focused comparison ensures that both the specificities and the generalities are addressed in all three cases. Using the Weberian notion of 'patrimonialism', this study highlights the peculiar 'power politics' that is prevalent in these polities, and shows how it dominates the discourse on democracy. By cross-examining various developmental theories, its also asks whether there is any basis to the axiom that 'small states are generally backward' and destined to remain so. The overwhelming picture that emerges from this investigation highlights the facets of state failure. The paper concludes with an assessment of the place and context of small state in a globalised world.