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Andorra is a small, mountainous country in the Pyrenees mountains between France and Spain. For years to , Andorrans lived under a unique co-principality ruled by the French chief of state and the Spanish Bishop of Urgell.
This system was modified in , with the titular heads of state retained but the government transformed into a parliamentary democracy.
Long isolated and impoverished, Andorra achieved considerable prosperity through its tourist industry after World War II. Many migrant workers legal and illegal are attracted to the thriving economy and its lack of income taxes. An estimated 9 million tourists visit annually, attracted by Andorra's duty-free status and summer and winter resorts.
Andorra's comparative advantage as a tourist destination has eroded recently as the economies of neighboring France and Spain have been opened up, providing broader availability of goods and lower tariffs.
The banking sector, with its "tax haven" status, also contributes substantially to Andorra's economy. The principal livestock activity is sheep raising. Manufacturing output consists mainly of cigarettes, cigars, and furniture. Electricity is supplied at to V 50Hz. Due mainly to the mountainous nature of Andorra, there is only one road entering Andorra from France and only one widely-used road entering Andorra from Spain. Almost all entry into the country happens at one of these two points.