A Free City in the Modern World?
"Vatican City as a Free Society" [pdf] by Carlo Lottieri argues that "Despite its official self-description, the State of Vatican City is not a State."
[I]t is possible to put Vatican City in the set of legal and economic entities marked by a voluntary collaboration of individuals (as the families, the companies, the associations, and so on). Vatican City is the outcome of free and spontaneous relationships, in absence of any kind of violence, and there is a big difference between this type of interactions and the bounds imposed by a State with the violence and the threat.