What makes Switzerland successful?
You could have called this column Swiss Watch. You missed the pun. Turn in your dad card.
Isn't the obvious right-wing explanation that Switzerland is full of Swiss?
"The best governed polities tend to be about the size of Switzerland. Some badly governed polities are also small. The U.S. is one of the ten most populated countries. The other nine are governed so badly that you should be grateful to be here."
Not that I'm disputing your claim exactly, but perhaps there's a bit of cherry-picking going on? If you made this list 10 years ago, Japan would make the cut instead of Mexico
If you grab 10 countries from the middle of the population table you get:
Hungary, Tajikistan, Belarus, UAE, Israel, Austria, Togo, Switzerland, Sierra Leone, Laos
Arguably that's a slightly better list, but there are some stinkers in there too. This doesn't really convince me that small countries have systematically better governance, but it's more a reminder that good government is still a rare thing
Which raises (not begs :)) the question, why don't Libertarians spend more effort and energy on reducing immigration restrictions. [Yes, I know of Caplan and my perception of "not enough" is subjective, but Bob's your uncle.]
Another advantage Switzerland, Singapore, and other small but very successful polities have is trade. Specifically, they can sell to big markets without being a big market. These countries always run big trade surpluses and hold foreign assets in big countries. In a way it's as if they are pushing the externalities of political scale onto their trading partners. Generally similar with the costs of military defense (many of these countries make proportional investments in defense, but still could not defend themselves against a larger aggressor without assistance).
I'm a big fan of both countries and would love to learn lessons from them, including agreement with your main points, but I'm not sure the model as it stands can scale to the rest of the world.
Yes to having a gov't & culture give the opportunity to create wealth.
"South Africa The Solution" (1986) [https://archive.org/details/southafricasolut00louw/mode/2up] recommended setting up tribal cantons for the 10+ SA black tribes & 2 white tribes. Had it been implemented then as part of an ending of Apartheid, it would have been far better for most citizens, both white and black.
It also could have occurred in Yugoslavia, and maybe even Czecho-Slovakia, as these states decentralized. Recently South Sudan would still be a good candidate for cantonization - with aid going more thru the more local cantons than thru the almost-inevitably corrupt central gov't and the current tribe in power.
Who is the Swiss President? (It doesn't matter so much, their President has less gov't power, and a 1 year term, and the Federal gov't has less power. )
Scott and Arnold focus more on top talent, but I suspect that it's even more important for the culture to have good life choices for low IQ folk, with good morals. This means both higher expectations of working independently, and more opportunities to find work and show up with good work habits. Next on my reading list is Freddie deBoer's "The Cult of Smart", tho I already know about its support for better culture for the non-academic oriented folk. I suspect the Swiss have better jobs, with resulting higher self-respect & dignity, for their lower-IQ Swiss citizens, but don't talk much about it.
Scott also specifies some 5 or 6 US & Swiss similarities:
1. Relatively decentralized.
2. Lots of referenda.
3. Traditionally more free market than most developed economies (although the edge is eroding.)
4. Much lower than average taxes for a rich country.
5. A long period of isolation from warfare (on their soil), and a haven for dissidents fleeing persecution.  Also a good place for migrants who want a business-friendly system.
We need some focus on both tails - allowing the top talent to fly, while helping the least talented to avoid being squashed.
Welfare dependency doesn't lead to self-respect nor good morals. Right now a national, state, county, or city guaranteed job offer seems among the best policies to help poor folk help themselves. But it does require the anti-Libertarian acknowledgment that some folk need more help to live decently - tho it also notes that such folk have a huge responsibility to live with good morals, that don't require money nor status.
Solving cretinism throughout Switzerland also helped them.
Switzerland is the only part of Greater Germany that didn't suffer from world wars, totalitarian regimes and foreign occupation. Of course it's richer than the other parts.
They have an excellent education system. With everything being at the canton level it becomes difficult to extort benefits for special interests without the voters having a say.