Chile, you are kidding. Pinochet was helped by the American CIA, he had economists that had been trained by Friedman at American universities. This wasn't a liberation of the people this was WAR backed up by the big corporate powers in the states, the ARMs companies.
August: Augusto Pinochet is appointed by Allende as commander-in-chief of the army.
September: In a violent coup, the presidential palace is bombed. Allende is among the first of 1,213 people who die or disappear between September 11 and the end of 1973. Pinochet dissolves Congress, suspends the constitution, bans opposition, arrests trade unionists and imposes controls on the media. Thousands are forced into exile. Four hundred US CIA experts assist Pinochet. The regime embarks on a radical programme of denationalisation, closely assisted by economists from the University of Chicago
1976
Orlando Letelier, Chile's former foreign minister and Socialist Party leader in exile, is killed by a car bomb in the centre of Washington DC The Pinochet regime is widely implicated.
1978
Pinochet declares an amnesty to cover all human rights abuses since the coup.
1980
Pinochet launches a new, dictatorial, constitution, which is ratified by a controversial plebiscite. Britain lifts its arms embargo on Pinochet's regime
1982
Chile assists Britain during the Falklands war with Chilean bases and intelligence. Britain opposes UN investigations of human rights abuses in Chile
1991
Chile's National Commission for Truth and Reconciliation publishes a lengthy indictment of Pinochet's dictatorship, officially counting 2,279 deaths (later revised to 3,172) in "political violence
It might be a small "state" now but it is armed to the teeth, Britain and Uncle Sam locked Chile into a huge amount of debt by peddling it's arms contracts.
Namibia, similar set of circs, Nigeria, don't even go there, another small state which collects very little in tax. The tax that was raised went into Swiss bank accounts (no wonder the Swiss are laughing) Virtually no money was spent by the government on roads, welfare, education. In 1995 Saro-Wiwa was killed and the people set about attacking Shell which was seen as an imperial force rather than just a business because its interest in the country was so huge. For 5 days they lost $2.6bn and eventually they decided to take over the "job of the state" they now provide schools, welfare for their employees, health, roads, housing. That may sound good, but they are an unelected super power, what happens when the oil runs out, or shell decide to move to pastures new. Everything will collapse again.
So no I don't think a "small state" is more democratic, it creates a vacume in which the monoliths can operate, they often have very questionable human rights, and we can not just stand by whilst huge numbers of people suffer to make a few shareholders happy.