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Does it make sense for a country to be dictatorial but with extremely limited power? The only citizen of the Autonomous State of the Panama Canal (roughly same borders as Panama Canal Zone) is the Panama Canal themself. (A similar situation exists for the Suez Canal.) Every other resident of the ASPC is a citizen of a different country. The Panama Canal does have to respond to economic pressure; they can't do whatever they want without consequence, and they have little authority over the citizens of other countries.

But it is possible, feasible, or necessary for this situation to exist? Should the Panama Canal simply be a citizen and part of the democracy that surrounds it (as the Kiel Canal is)? Is there, as in when I first wrote this, some economic or geopolitical benefit for a country to set up this nation?

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  • $\begingroup$ Please clarify your specific problem or provide additional details to highlight exactly what you need. As it's currently written, it's hard to tell exactly what you're asking. $\endgroup$
    – Community Bot
    Commented Apr 10 at 2:49
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    $\begingroup$ What do you mean by the canal itself being a citizen? $\endgroup$
    – elemtilas
    Commented Apr 10 at 2:56
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    $\begingroup$ I can't get any reference online to a canal (Kiel Canal) being a citizen. I honestly can't make any sense of what you're asking, could you clarify lots please. $\endgroup$ Commented Apr 10 at 4:46
  • $\begingroup$ @MultipleTowns perhaps you should look up the curios case of "Sea Land". It was basically a guy who declared his own country on an abandoned sea fortification near the British coast. He was also actually pretty serious about defending it too. $\endgroup$ Commented Apr 10 at 5:13

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The legal framework grows from political realities, and vice versa. So decide about the power realities of your fictional world, and expect them to come up with the legal framework that fits.

  • The Kiel Canal was built by the then recently unified Germany, on the territory of Germany. Germany retained sovereignty over it.
  • The Panama Canal was built largely by the United States, which also largely engineered the separation of Panama from Colombia in order to retain control over it. This kind of heavy-handed intervention was later seen as unacceptable by the rest of the international community, so Panama sort-of regained control over the canal.

You will find no country which is free from outside pressures. The voters and government of some countries may believe that they can secede from reality, but reality will get back to them sooner or later.

When it comes to resources other than canals, look at the concept of tax havens. They work by exploiting loopholes in international law, until the international community gets fed up with them and changes the rules.

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