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. . . the leaders of the G-20 have a responsibility to take bold, comprehensive and coordinated action that not only jump-starts recovery but launches a new era of economic engagement to prevent a crisis like this from ever happening again. —Barack Obama, President of the United States1 Increasingly, policies that used to be made by national governments are now formulated for developing countries through global processes and institutions, including the IMF, the World Bank and the WTO. . . . As a result, developing countries have found it extremely difficult to steer through the turbulent waters of globalization. —Mahathir bin Mohamad, former Prime Minister of Malaysia 2
INTRODUCTION: GLOBALIZATION AND STATE SOVEREIGNTY
One of the most heated debates within the globalization literature is the issue of the continued viability of state (economic) sovereignty. For some scholars and analysts, globalization has not been kind to the nation-state.3 These “hyperglobalists”4 argue that the increasing reach and power of global markets challenge and undermine the geopolitical assumptions of realism. For classical realists like Hans Morgenthau, the physical survival of the state through the use of military power is a central and irreducible dimension of contemporary world politics.5 Realism’s corollary that states are autonomous, unitary actors capable of pursuing independently determined
states are undergoing a realignment as the complex and contradictory forces driving globalization such as fiercer competition. in effect.”7 For “[i]n this ‘borderless’ economy. Confronted by such a possibility. the ability of national governments to manage their economies within the globalization process has become increasingly more complex and arduous. which was formerly guaranteed by territory. national governments are relegated to little more than transmission belts for global capital. and social policy. rules on working hours. leaving their workers without jobs and arresting the development and/or growth of their economy. Governments are less able to afford and to provide for social safety nets because an important part of national tax bases supporting these services has become more difficult to capture due to the increased mobility of capital under conditions of globalization. let alone third-world states. Particularly in the key areas of macroeconomic. capital mobility. globalization presently has a profound effect on the power-relation dynamics between the state on one side and the global market (transnational financial and corporate actors) on the other. they will make their home markets uncompetitive (because such requirements supposedly decrease earnings by increasing the costs of doing business) and may even cause firms and financial actors to move on.M06_HEBR9703_02_SE_C06. In the economic arena. some economists and policy makers fear that globalization “may drain governments’ tax revenues either by making [tax] evasion easier or by encouraging economic activity to shift to lower-tax countries. The state has. effectively “ended the nation-state’s monopoly over internal sovereignty. For as the world’s financial markets become more integrated. and technological changes increase in scope and erode national borders. and family benefits) as a means of protecting their citizens from the vagaries of globalization. The result is that the new global system makes it more difficult for governments of both industrialized and emerging economies. and health-and-safety standards in the workplace) and to administer social safety nets (unemployment insurance. and as capital gains greater discretion over where to locate. in essence. that the competition between states to attract investments has become so fierce that if governments implement socially and environmentally conscious policies such as stern labor standards or stringent environmental regulations. States find it more and more challenging to mandate environmental and worker protection laws (minimum-wage laws. to exclusively regulate the marketplace. environmental.”10 Conventional wisdom posits.QXD 1/13/10 4:43 AM Page 83 Introduction: Globalization and State Sovereignty 83 policies while exercising political power has in fact been under attack for more than 25 years. been reduced from the primary sovereign organization that decides the rules for economic activity within its territorial .”8 The assumption is that the role and function of states will ultimately diminish to nothing more than serving as “a superconductor for global capitalism. therefore. pensions. governments are under tremendous pressure to relax their rules and laws so as to continue to attract foreign direct investments and/or avert capital flight.6 Globalization has.”9 Without question.
The nature of sovereignty transcends the preferences of the global marketplace. purpose. desirable—especially. administrative and regulatory agencies. stripped of any meaningful economic role.11 The sovereignty of states appears to be much weaker at the beginning of the twenty-first century than at the midpoint of the twentieth century—even at the height of the Cold War. interest groups. political elites. the belief that an economic transformation will occur beginning with rising standards of living. by definition. moreover. Martin Wolf ponders. is a gross exaggeration of what has evolved. and regulatory agencies because the benefits of integration are so fundamental to state interests. the global market system embracing both transnational financial actors and corporations. The political process in states encompassing elected officials. and capital diminished the power of the state by making governments weaker and less relevant than ever before? And if so. therefore. “Does globalization. strong arguments for believing that the restrictions voluntarily accepted and/or imposed16 on governments by globalization are. There are.15 So though markets have increasingly taken a larger stake in the governing and policy-making function of states. or is at the mercy of. services. and judicial systems. for the most part.M06_HEBR9703_02_SE_C06. and political parties continues to have significant influence on fiscal and monetary policies. have to be the nemesis of national government?”12 The view that the global economy has both seized and drained power from the state. Geoffrey Garrett. the claim that globalization strips states of their domestic autonomy does not have much empirical support. and Peter Katzenstein. In other words. this is not to say that governments do not feel challenged by the pressure exerted by the forces of globalization.QXD 1/13/10 4:43 AM Page 84 84 CHAPTER 6 Sovereignty borders to an entity whose freedom of action is now dictated by. REALITY CHECK: ECONOMIC SOVEREIGNTY REDEFINED To what extent does globalization undermine the ability of national governments to regulate their economies and curtail their freedom of action to further social and political ends? Has the growing international torrent of goods. judicial systems. political cultures. that governments today are shackled by integrated global markets and.14 States retain substantial autonomy in regulating their economic systems and in designing social policies that limit the openness and vulnerability of their economies.13 However. regulatory bureaucracies. Econometrics studies show that increased capital mobility has not constrained the ability of states to tax capital. when intense global superpower rivalries of the Soviet Union and the United States placed countries under tremendous pressure to align themselves with one or another camp. the state is fast losing its relevance. or influence. stand helpless before the gale of international forces beyond their control. According to studies conducted by Mark Hallenberg. they have often done so with the acquiesce and increasingly willing participation of governments. .
the considerable progress made in trade liberalization. That states continue to have at their disposal the option of interventionist policies in a wide array of economic and market policy decisions such as subsidization or taxation policies. the necessity of sustaining “international competitiveness” looms much larger and dictates an explicit bias to policy making. monetary policy. The repercussions are being felt everywhere.QXD 1/13/10 4:43 AM Page 85 Reality Check: Economic Sovereignty Redefined 85 What.18 indicating that despite the large volume of trade between the two neighboring countries. Southeast Asia.M06_HEBR9703_02_SE_C06.”17 The significance of continuing economic independence between the globe’s national markets can best be illustrated by American–Canadian trade. French and German unions are in the midst of a heated battle over government attempts to cut benefits. engagement in the global economy encourages governments to follow more market-oriented economic policies sometimes perhaps at the expense of labor and the environment because globalization has raised the costs that must be paid for antimarket policies. In Europe. . large Japanese corporations have begun to reevaluate the practice of providing lifetime employment. does globalization mean for states’ economic sovereignty? Despite the massive flow of investment. the revolution in transportation. Sovereign democratic states are still able to maintain their freedom of action to comply with whatever economic policies their government prefers. And developing countries in Latin America. As one study reported. it follows the wishes of its citizens. communications. the U. and an ever-expanding agenda of global issues. With capital more free flowing and mobile than ever. there is evidence of “a surprisingly strong association across countries between the degree of exposure to international trade and the importance of the government in the economy. of course. A study conducted by Canadian economist John McCallum reveals that trade between a Canadian province and an American state is on average 20 times smaller than trade between two Canadian provinces. If this relationship is true for one of the world’s largest and unequal trading partnerships. and international trade regulation suggests that states continue to wield considerable power. provided. a country that chooses international economic integration implicitly accepts that surrendering a certain degree of national sovereignty in terms of policy options is a natural and inevitable process in the march toward greater economic interdependence. for example worker rights and environmental concerns. countries that continue to practice antimarket policies may often find themselves being shut out of global competition for investments. At the same time. and Central Asia are restructuring their economies by liberalizing trade. then it may also be relevant for other similar bilateral trade relationships. Trade between Canada and the United States is among the freest in the world.S. then. In this economic environment. the ability of states to make independent regulatory decisions has not been significantly usurped by the integrative forces of globalization because national economies continue to remain strongly grounded in a distinctive geopolitical environment while remaining largely independent from each other. In Asia. and information technology. In this regard. and Canadian markets remain significantly delinked from each other.
but more of a redefinition. A number of studies have revealed that the state continues to retain substantial capacities to govern its global economic activities—that it remains the prime regulatory force in international economic relations. As we have argued throughout. to reap the full benefits from globalization. comparative and competitive advantage. forms. a spokesman for the World Bank. national governments have an enormous incentive to embrace and espouse policies that stimulate foreign investment and market-led growth. and privatizing public enterprises. the globalization of markets implies.24 For while the forces of globalization may impose constraints on the sovereign power of states. but rather a redirection of the state’s role. and IGOs operating across state political boundaries. “It’s not enough to say that markets can do it all.22 DEBUNKING THE MYTHS: THE AGE OF MICROAND MACROGOVERNMENTS23 The connection between sovereignty and globalization is a complex and often shifting set of policies and realities.25 Political globalization does not suggest a simplistic erosion of national sovereignty.21 There is an astonishingly robust correlation across countries between a state’s international trade integration and the degree of governmental involvement in its economy. deregulation. and local levels.QXD 1/13/10 4:43 AM Page 86 86 CHAPTER 6 Sovereignty deregulating markets. In sum. Governments are not coming apart at the seams. but also to more stable fiscal and monetary policies. is an historically documented process. these same forces have also strengthened many governments and empowered them in new ways. The last 60 years have witnessed what at first instance appear to be two paradoxical trends: the growth of both trade and government. and functions in global economic relations and policy making to fit the evolving international environment.”20 The recent economic achievements of the world’s most successful states are not due to blind engagement in the global economy alone. Indeed. In sum. Globalization processes may attenuate and morph into regional institutions. and sound social-welfare programs to minimize the social impact and possible disruptions of the national economy. redirection. and monitoring labor and environmental standards have all increased at the federal.19 According to Nicholas van Praag.M06_HEBR9703_02_SE_C06. transnational entities. Deglobalization. designing social policies. Finally. and other invisible. but becoming increasingly implicated in wider sets of relationships with other nations. an effective state role is a prerequisite for effective participation in the globalized world economy. and reconfiguration of its . for example. In the United States. self-regulating market forces is belied by a number of indicators. governments must remain vigilant by pursuing sound policies. The supposition that the global economic system can now function almost solely on the basis of such free-market principles as the law of supply and demand. as Robert Keohane and Joseph Nye argue. state. globalization is not a unilinear process. not the elimination. the institutions for regulating the economy. free trade.
politicians. With the onset of the global economic crisis.M06_HEBR9703_02_SE_C06. In so doing. If we are in the midst of a backlash against “two decades of intense reliance on free trade. and academics increasingly endorses more. The IMF study concluded that the most effective means to address the current global financial crisis would be for nation-states to respond to the situation in a multilateral manner. The speed and unpredictability of interconnected financial markets and the proliferation of fraudulent and flawed financial instruments point to a critical vulnerability in the mythology of self-regulating free markets much touted by the disciples of Adam Smith. given that the resources to stabilize the economy lies predominately in the hands of the state. interconnectivity. a growing consensus among economists. The UN report calls for a greater governmental role in the regulation of international capital flows and in addressing income inequality.g. however.. We are experiencing the downside of globalization—in terms of the speed..e. both in becoming shareholders in companies (e.” On the domestic level. and unpredictability of financial markets worldwide. unregulated and underregulated financial and trade markets have plunged the global economic system into the worst financial crisis since the Great Depression of 1929. open markets and deregulation in favor of big government. Indeed.” I believe that changing course is essential for the economic and political stability of states and the global economic and political system. . greater government involvement in the market has been implemented to stimulate economic recovery and hopefully preserve social stability. the United Nations’ 2008 World Economic and Social Survey contends that government needs to play a much larger (interventionist) role in the global economy in order to temper the sometime extreme economic cycles and disparities as well as to shield people from the brutal and unpleasant effects of globalization. this new orientation embraces “Keynes at home and Smith abroad.and Macrogovernments 87 DEBATING GLOBALIZATION Lui Hebron: Regulation Needs to be Reasonable John. the state has become more active and assertive. On the global stage. a major criticism of the globalization process revolves around a state’s increasing incapacity to regulate its economy due to the internationalization of finance and trade. Washington had to come to the rescue of banks and the automobile industry) and urging them to do what is needed (i. The UN’s critique and recommendations were supported by a separate study conducted by the International Monetary Fund. we are witnessing a backlash against free trade and financial deregulation in favor of big government.QXD 1/13/10 4:43 AM Page 87 Debunking the Myths: The Age of Micro.—Lui John Stack: Globalization Needs a Regulatory Framework Lui. not less. tightening regulation of banks and building more fuel-efficient cars). In terms of policy. G20 leaders have responded to the call for greater multilateral cooperation by pledging to coordinate their efforts to stimulate the global economy from its current downturn. government involvement in the economy.
”27 Such a “reorganization” of sovereignty. and the Organization of Petroleum Exporting Countries (OPEC) that are able to reject or bypass the power of some states. We need. Some countries are less affected by the current global economic meltdown than others because domestic regulations prevented companies. has led to the shifting of authority either to (1) transnational actors and local governments—eager to play an active role in foreign affairs—or to (2) quasi-supranational actors such as the International Monetary Fund. Globalization will not destroy sovereignty.”28 . and investors from the worst effects of the financial sector’s collapse. with points and lines of authority that are not always clear. “No single ‘level’ reigns over the others. from diving into flawed financial instruments whose value proved to be illusory.M06_HEBR9703_02_SE_C06. especially in the financial sectors. France and Spain are two examples of countries whose regulations have sheltered banks.”26 Specifically. The belief that somehow Adam Smith’s unrestrained markets will result in the greatest good for the greatest numbers did not work in the nineteenth century and does not work in the twenty-first century. Instead. The consequences of the collapse of the global economic order of the 1930s were an important contributing factor to the rise of authoritarian politics in Europe and Asia and the onset of World War II. Globalization and sovereignty as we suggest in this chapter coexist. According to Jan Aarte Scholte (2005). but if left unregulated internationally. The prolonged economic damage from the Asian financial crash in the 1990s and the economic wreckage of both the Great Depression and the Great Recession within countries and throughout the world should serve as a lesson. the European Union (EU). but that is just the first step.—John purpose and influence in the international system “to fit the exigencies of the global market. Responsible domestic economic regulations are necessary to stabilize interconnected and globalized markets. far greater levels of multinational oversight of globalized markets. governance tends to be diffuse.QXD 1/13/10 4:43 AM Page 88 88 CHAPTER 6 Sovereignty Big government is not the problem. it can bring untold economic and political suffering and upheaval to billions around the globe. Too much regulation can stifle markets and creativity but too little at home and abroad threatens political and socioeconomic stability. emanating from multiple locales at once. financial institutions. as you correctly suggest. but the lack of both international and multilateral regulatory structures is desperately needed to put the global economy back on track. The new policy consensus of “Keynes at home and Smith abroad” simply will not work. governance (authority and regulation) “has become increasingly ‘multi-level’ or ‘multi-scalar’ across substate (municipal and provincial) bodies and suprastate (macroregional and transworld) agencies as well as state organs. as occurred with the primacy of the state over suprastate and substate institutions in territorialist circumstances. in turn.
Technological. and economic interests. social. in turn. and policies will likely have to migrate either up to regional entities or within states down to smaller administrative and political organizations in search of the appropriate level. More than ever. Large segments of the state’s economic system attempted to flee from the confines of the traditional economic regulatory frameworks of the states in which they found themselves to have been “imprisoned. rapidly developing societies. the Quebecois in French-speaking Canada. a number of trends have supported transnational attachments between peoples in affluent and developing societies.and Macrogovernments In the twilight of the twentieth century. religious. as well as such superregional movements as Albanian Kosovars and Macedonians in the Balkans.” For a number of reasons. mean that transnational public. The seemingly surprising revitalization of ethnicity was expressed in a large number of states in both developed and developing countries such as the Basques in Spain. NGOs to transnational corporations (TNCs) to community groups.31 International relations in the age of globalization has become very complex for it involves not only the traditional interactions between states dealing with a variety of economic. nondeveloping states. An increasing segment of national populations seems to feel that political and economic systems were no longer effectively serving their needs in an adequate manner. secessionist movements.30 These ethnonational revivals spanned the globe. the role of the country as the most basic and meaningful source of individual identification may be changing. in just about every corner of the globe. Since the midpoint of the twentieth century. ideological. and transportation processes bind countries together in expanding networks. events in one country having an impact elsewhere in the . often narrowly defined social. The integrative character of globalization means that governmental power in most countries will be exercised in pursuit of domestic and international issues and policies.QXD 1/13/10 4:43 AM Page 89 Debunking the Myths: The Age of Micro. and economic policy-making frameworks embraced the movement toward both fission/secession and fusion/integration. economic. political. the Achen in Indonesia. and environmental issues are no longer under the exclusive domain of national governments. To be dealt with effectively. a sense of disquietude took hold.M06_HEBR9703_02_SE_C06. but also a varied assortment of actors ranging from supranational organizations and international governmental organizations (IGOs). finding fertile soil in stable. a host of issues. a most peculiar phenomenon happened to national governments. As the twenty-first century moves forward. These developments. a state’s function must be both inward and outward looking if it hopes to be effective in meeting the needs of its citizens and residents. as well as heightening suspicions that the impact of globalization was being felt in unexpected ways.29 For many groups. or a variety of other manifestations of heightened feelings of ethnonationalism. conflicts. all pursuing their own. ethnic. spurring a kind of return “to their roots” whether expressed in terms of linguistic and cultural revivals. and diplomatic issues. communications. The impact of demonstration. postindustrial states. military.and Macrogovernments 89 The Rise of Micro. and poor. environmental.
the power of religious groups to challenge the values of modern secular governments and societies is now a hallmark of world politics. and reactions and feedbacks come more quickly in response to social changes. and Russia) and Asia (Japan. In addition to allowing the island’s schools to teach the Corsican language as part of its curriculum. financial. the search for meaningful group identities intensifies. Economic and social welfare issues are now a key point of conflict in virtually every country rich or poor throughout the world. What results can be of great importance because “ . Daniel Bell. one of the most perceptive sociologists of his time.38 This adds to the difficulty of building consensus politics in the absence of a common enemy or imminent threats to national security. or the reach of al-Qaeda in the years both before and after 9/11. one of the least understood though most intriguing political developments has been the proliferation of microgovernments— smaller institutional entities that have expanded their autonomy and authority to deal with issues. In many areas of Europe (France. shocks and upheavals are felt more readily and immediately. . racial. A third dimension of change in both affluent and developing countries is the search for “more inclusive identities. bureaucratic. ”37 may result. religious groups marshal resources transnationally to accomplish specific ends. or economic spheres.34 The proliferation of radicalized Islam.M06_HEBR9703_02_SE_C06. and/or crises at the subnational level. . new and larger networks and ties within and between societies have been woven by communication and transportation. occurs on a daily basis. In France.QXD 1/13/10 4:43 AM Page 90 90 CHAPTER 6 Sovereignty world whether in political.35 Within this realm.”32 The political arena in most advanced industrial societies has expanded since World War II.33 Similarly. Spain. and India). problems. . Indeed. for example. religion. This autonomy law follows the . national governments have been ceding their administrative and managerial responsibilities to ethnic. is an example of this process. In the following section are a few examples of national governments voluntarily or involuntarily devolving their powers. and remote from their citizens. challenges to the present day distribution of place and privilege and the questioning of the normative justifications and legitimations which have sanctioned the status quo . and culture-based regional authorities. the bill gives Corsica’s regional assembly the right to amend some national legislation to suit the island’s needs.”39 As countries become increasingly urban. the National Assembly approved a controversial bill to grant more powers to the Mediterranean island of Corsica—where separatists have staged violent protests against Paris for more than 20 years. the search for ethnic and religious identities highlights the often unexpected importance of transnational groups as global actors. wrote. as evident in Hamas. “ . . . as evident in the ongoing debates about immigration.36 The power of individuals to effect change is dependent on their ability to work through transnational networks. other extremist Jihadist movements. cultural. Indonesia. . Microgovernments: Devolution At one end of the spectrum. the United Kingdom.
the stronger motivational force was that devolution is about good governance—one in which a decentralized system of decision making would lead to more responsive government. centrally-determined . increasing Catalonia’s autonomy and powers of self-government within Spain. after the collapse of the Soviet Union.QXD 1/13/10 4:43 AM Page 91 Debunking the Myths: The Age of Micro. characterized by “uniform. with governors literally establishing their own little fiefdoms. In some cases.M06_HEBR9703_02_SE_C06. the Parliament at Westminster will continue to make foreign. taxation. and immigration. 79 percent of those voting in Catalonia on June 18. like the Welsh Assembly.and Macrogovernments 91 same sort of regional devolution (powers and autonomy) already being practiced by Spain and Britain. it would appear that the era when “Russia was ruled from the Kremlin. (Though the Scottish Parliament. Scotland and Wales already had developed greater autonomy from established structures—cabinet ministers. departments. As importantly. and overall economic policies. and cultural forces within a region in order to identify its assets and liabilities. It is also a means for devising strategies for tackling problems and creating the conditions for economic prosperity and sociopolitical stability. based on the successes of the Scottish Parliament and the Welsh Assembly. This allows local input into regional policy. the country devolved into a loose federation of regions. It strengthened the political powers of the government of Catalonia vis-à-vis the Spanish state and increased Catalonian control over economic development.40 In Spain. which attempted to dictate every aspect of political and economic life from Moscow” is now long passed.44 In Japan.”43 Though President Valdamir Putin remains embroiled in a protracted campaign to reign in Russia’s rebellious regional governors and restore the Kremlin’s authority. Japan’s governors have traditionally enjoyed intimate and cordial relations with the central government. there are increasing calls for the establishment of regional governments for England as well. these regional leaders “passed laws in contradiction to the constitution. defense. And while the argument can be made that devolution was initiated in part as a tactical rebuttal to squelch the rising undercurrent of nationalistic identity in Scotland and Wales. Indeed.42) In Russia.41 In the United Kingdom. social. from czars who imposed their will on a far-flung empire to the Soviet Communist Party. approved the Statute of Autonomy of Catalonia. and committee assignments within Parliament. will have the power to levy some taxes and make laws on issues such as education. political. legal and financial resources for their own ends. some of the governors of the country’s 47 prefectures have increasingly become more assertive and independent minded due to the country’s continuing economic woes and frustration with top-down rule. and used federal military. the Statute of Autonomy of Catalonia reaffirmed the importance of the Catalonian language and culture within Spain and Europe. and provides a mechanism that will bring together the economic. 2006. devolution proceeded for Scotland and Wales despite the fact that even before the granting of greater formal regional governing authority in the form of legislative bodies.
respectively. American50 and Australian states. head of the Jakarta office of the Asia Foundation. But a deep sense of neglect and economic marginalization is at the heart of it all. today. provincial or local—were capable of managing the region’s economic development.”46 In Indonesia. is becoming increasingly irrelevant to the affairs of the state as the economic and political influence is shifting out of this sprawling capital city and into the far-flung provinces. to local governments. groups are demanding to divide existing states into smaller units better suited to the ethnic and economic demands of their inhabitants. these unruly governors’ “[c]alls for referendums are being heard all over Japan. the fragmentation caused by this reconstitution is the political challenge facing all states (modern and developing) today.”47 India too would appear to be imploding in several areas as the country struggles to administer the vast diversity and intense poverty of its 1. on all manner of issues from rubbish dumps to airports.-based institution that studies the region’s culture and politics. Jakarta. the central government has been devolving powers.”56 On a much larger scale. Since 2001. regional groupings of countries are at varying stages of establishing greater economic integration. These revolutionary developments were best summed up by Douglas Ramage. and Switzerland.S. like some tax policies and control of certain industries. the power center of the country.54 While it remains far from clear whether or not these trends toward greater devolution have undermined or marginalized the function and influence of the state. there is the case of Alpine Diamond: a European alcove of about two million people at the intersection of France. In no less than 10 regions across India.”45 Once the malleable tools of Tokyo. there is the success of the North American Free Trade Agreement (NAFTA) and the EU. Canadian51 and Chinese52 provinces. when he commented that “A lot of local governments are ignoring what’s going on in Jakarta and getting on with their own business.M06_HEBR9703_02_SE_C06. The country has also been decentralizing economically with more money earned from exports flowing to the provinces.1 billion people. Observing the benefits of NAFTA and the EU. interprets these movements in this manner: “Widespread and simmering discontent among people about skewed development and inequity finds expression in different ways. which created a free trade zone in North America and a common market in Western Europe. Macrogovernments: Regionalization55 On the other end of the spectrum. and German53 Länders have established overseas offices (trade and investment bureau) that operate with considerable autonomy from their authorities.”49 Finally. Italy. a professor of politics at Jawaharlal Nehru University in New Delhi. This fledgling regional government came about because the denizens who reside in the area “decided that none of their existing governments—national.48 Zoya Hasan. .QXD 1/13/10 4:43 AM Page 92 92 CHAPTER 6 Sovereignty policies and docile obedience in carrying them out. a U.
First. nationalism.61 Assertions. including the bloodbaths of religious hatred. . therefore. the process is altering the way government operates. while globalization may not render states irrelevant. as the linchpin of order and foundation of governance. and to adapt to more than 450 years of upheaval. The modern state has repeatedly demonstrated its ability to “reinvent” itself. states will matter more.e. national security.M06_HEBR9703_02_SE_C06.”58 In light of the 9/11 terrorist attacks on the United States. that the state has been fundamentally altered are exaggerated and overblown. welfare. etc. states are not the acquiescent victims of the globalization process. let alone obsolete. as we have argued throughout the book. such as the provision of public goods [i. in a globalized world. morals. but rather how and in what manner it will be transformed as globalization becomes more embracing.. and economics among very many areas of governance. although it may likely complicate decisions at many levels of the political process. Something larger is needed to handle them. and given the everincreasing complexity of this evolving international order.”57 CONCLUSION: THE FUTURE OF THE NATION-STATE The claim by critics that globalization inhibits and/or immobilizes the capacity of government to operate autonomously is a gross exaggeration of the globalizing process’s effect on states. social safety nets. as Daniel Drezner has pointed out. “ . states.”60 In certain instances. The main issue is not whether the state will survive. from high politics to domestic policies. a more activist state is needed to direct the successful liberalization of markets. rather than an unstoppable force. many of the limitations placed on a government’s freedom of action are self-imposed in the hope that it will bring about beneficial results such as greater economic and physical security. the driving action was the same: “Public issues are not respecting traditional boundaries.59 What states do does matter. it is the state that is the primary expression of territorially bounded sovereignty and will continue to exercise fundamental decisions about the workings of the political process and resource allocation decisions in the areas of traditional police powers—health. are assigned tasks. not less. it cannot render states as being weak and powerless. David Held and his team of scholars point out that national governments are “being reconstituted and restructured in response to the growing complexity of processes of governance in a more interconnected world. . .QXD 1/13/10 4:43 AM Page 93 Conclusion: The Future of the Nation-State 93 In all these cases.] and the establishment of the necessary rules and institutions. education. Like it or not. the Cold War. that cannot be easily replicated by other actors. protection of the environment. human rights. and global terror. And if engagement in globalization is a matter of choice. Is this transformation a threat to state sovereignty and the existing state system? The answer would have to be in the negative. Second. Third. Indeed.
1995. 2001. Refutes the argument by some antiglobalists that economic integration via the globalization process has made companies more powerful than governments. “States of Discord. Argues that not only have nation states lost their ability to control exchange rates and protect their currencies. What psychological functions do states provide for their citizens? FURTHER READINGS John Agnew. Does sovereignty exist for states under conditions of globalization? 2. and transnational terrorism. May 14. Economist. It advances the idea of effective sovereignty and the geographical forms in which sovereignty actually operates in the world. Globalization and Sovereignty. New York: Simon and Schuster. D. Kenichi Ohmae. “Market Economy Begins to Reach Further Into Government. but they no longer generate real economic activity.QXD 1/13/10 4:43 AM Page 94 94 CHAPTER 6 Sovereignty KEY TERMS devolution 91 economic sovereignty 85 hyperglobalists 82 macrogovernments 86 microgovernments 86 regionalization 92 FIVE QUESTIONS TO CONSIDER 1. to the open . One sees technology and markets as a key to the future. Offers a new way of thinking about sovereignty. it argues that states are far from being at the mercy of the dictates of the international marketplace. David Wessel and John Harwood. March/April. Noting that governments continue to tax at will to provide for social spending. How does globalization promote the rise of macro.” Wall Street Journal. Inc. “Is Government Disappearing?” September 27. 2009.” Foreign Policy. while crucial economic choices are made elsewhere. while the other sees in attributes of traditional state power the most important lens to view central to understanding globalization. States have forfeited their role as critical participants in the global economy becoming inefficient engines of wealth distribution. 1998.C.M06_HEBR9703_02_SE_C06. 2002. The End of the Nation State: Rise of Regional Economies. What does the term “economic sovereignty” mean? 3. As the various cases studies from the privatization of firefighter service. both past and present while challenging the idea that state sovereignty is in worldwide decline in the face of the overwhelming processes of globalization. Two influential commentators diverged sharply over the future of the nation-state at a debate in Washington. Examine the clashes that have transpired as profit-making companies continue to penetrate those areas once thought to be the exclusive purview of government. To what extent does globalization render states irrelevant? 5. Lanham MD: Rowman & Littlefield Publishers.. Society. Thomas Friedman and Robert Kaplan. democracies.and microstates? What functions do hybrid states fulfill under conditions of globalization? 4.
states normally define identity. Thurow. The End of Sovereignty? The Politics of a Shrinking and Fragmenting World. and Saskia Sassen. Losing Control? Sovereignty in an Age of Globalization. Stanford. and Jonathan Perraton. 6.asp 5. 9. Anthony McGrew.” NOTES 1. Economics. Kenichi Ohmae. David Goldblatt. 4. Aldershot: Elgar.” Financial Times. 2009. David Held. Quoted from Barack Obama. Hans Morgenthau. Economics and Culture. Reinicke. 2. 2002. 2001. 1973. 1999. Lester Thurow.QXD 1/13/10 4:43 AM Page 95 Notes 95 bidding for health care services. February 5. 1996: 187.M06_HEBR9703_02_SE_C06. Boston: Addison-Wesley. New York: William Morrow. and Systems. The Future of Capitalism: How Today’s Economic Forces Shape Tomorrow’s World. 1996. 1996. Patrick James. Debunks the antiglobalist argument that states are at the mercy of “unbridled corporate power. A Theory of International Relations.” Foreign Affairs 76 (November/December 1997): 127–138. Globalization will not spell the end of the modern nation-state because of the following: the willingness of societies to take advantage of international economic opportunities depend on the quality of public goods as determined by states. to the outsourcing of a state’s welfare system over to private contractors illustrates. CA: Stanford University Press. Politics Among Nations.. Lester C. and global governance is shaped by individual states that largely guarantee stability.” Pointing to both the conceptual flaw (measurement of economic size) as well as the misguided analytical framework (comparing corporation with states) upon which the argument is based. “Global Public Policy. 2002.” Los Angeles Times. A. David Held and Anthony McGrew. and Alexander Wendt. Lowell Bryan and Diana Farrell. Recreating Asia: Visions for a New Century. The Retreat of the State: The Diffusion of Power in the World Economy. Cambridge: Cambridge University Press.uk/global/globalization-oxford. “Will the Nation-State Survive Globalization?” Foreign Affairs 80(1):178. New York: Columbia University Press.co. Falk. the “advance of market forces is being meet with pockets of resistance . March 24. 5th ed.polity. “Countries Still Rule the World. ” Martin Wolf. New York: Wiley. 1990. 1992. Cambridge: Cambridge University Press. Singapore: John Wiley and Sons (Asia). “Globalization. . The Borderless World: Power and Strategy in the Interlinked World Economy. . Kenneth Waltz. Martin Wolf. the author concludes that “corporations are neither as big nor as powerful as critics claim. “Making the World Work Again. “The American Economy in the Next Century.” Journal of International Relations and Development 6 (2003): 344–357. Global Transformation: Politics. New York: Knoph. Social Theory of International Politics. electronic version. 1999: 3. . 1997. eds. 7. Camilleri and J.” Entry for Oxford Companion to Politics. Quoted from “Globalization and Developing Countries. Market Unbound: Unleashing Global Capitalism.” in Frank-Jürgen Richter and Pamela Mar. “International Relations: A Perspective Based on Politics. http://www. 8. 1979. New York: Harper Business.” Harvard International Review 20 (Winter 1998): 54–59. Wolfgang H. J. Susan Strange. 3.
Khan. Power and Interdependence. Geoffrey Garrett. electronic version. Robert Keohane and Joseph Nye. Hudson. Cambridge. “Electronic Money: A Challenge to the Sovereign State?” Journal of International Affairs 51(2) (Spring 1998): 387–410. John McCallum. The Ends of Globalization. 1999. Ithaca. and the Domestic Politics of Economic Policy. UK: Cambridge University Press. NY: Mellen Press. 1995.” World Politics 48(3) (April 1996): 324–357. Contemporary Crisis of the Nation State? Oxford: Blackwell. Dani Rodrik. 1999.. “Disappearing Taxes: The Tap Runs Dry.. Cohen.” Foreign Policy 107 (Summer 1997): 19–37. 18. Problematic Sovereignty: Contested Rules and Political Possibilities. M. UK: Cambridge University Press.. IL: Scotts Foresman. Partisan Politics in the Global Economy. New York: Columbia University Press. “Capital Mobility. 19. and Peter Katzenstein.” The American Economic Review 85(3) (1995): 615–623. J. Mark Hallenberg. . Glenville. NY: Cornell University Press. The Geography of Money. NY: Cornell University Press.” May 31. Globalization in Question: The International Economy and the Possibilities of Governance. Jan Aarte Scholte. “Why Do More Open Economies Have Bigger Governments?” Journal of Political Economy 106(5) (October 1998): 997–1032. Ithaca. “Will the Nation-State Survive Globalization?” Foreign Affairs 80(1) (2001): 178. Minneapolis: University of Minnesota Press. 23. A. Y. Cambridge: Polity Press. Krasner. 1998. Geoffrey Garrett.” International Affairs 73(3) (July 1997): 427–452. 1998. 20. 21. 12. 1998. “Funding the Welfare State: Globalization and Taxation of Business in Advanced Market Economies. Globalism and the Obsolescence of the State. Cited from Benjamin J. Dunn. 15. Kenichi Ohmae argues that the authority invested in nation-states is devolving to regional organizations. Friedman. Straus & Giroux. 2003. Horsman and A. ed. The Extinction of Nation-State: A World without Borders. Regional Trade Patterns. Ithaca. Tribalism and the New World Disorder. Marshall.. 16. 1999. and Thomas L. Robert Pastor. The Hague: Kluwer Law International. 1995. E. and Charles Boix. 3rd ed. New York: Basic Books. New York: Free Press. ed.” International Organization 49 (Autumn 1995): 657–688. Trade.QXD 1/13/10 4:43 AM Page 96 96 CHAPTER 6 Sovereignty 10.S. and Stephen D. Martin Wolf. and Paul Hirst and Graham Thompson. “Sense and Nonsense in the Globalization Debate. Cambridge.M06_HEBR9703_02_SE_C06. A Century’s Journey: How the Great Powers Shape the World. Lewiston. 13. New York: Farrar. and M. NY: Cornell University Press. It should be noted that emerging economies are in principle vulnerable to “race to the bottom” effects because since economic growth is more reliant on the attraction of foreign capital. Political Parties. ed. Linda Weiss. L. Economist. 1994. 2000. London: Harper Collins. 14. The End of the Nation State. “Global Capitalism and the State. 2nd ed. Small States in World Markets. competition to attract investment through lower environmental and labor standards is always a theoretical possibility. and Kenichi Ohmae. The Borderless World: Power and Strategy. Bamyeh. 2003. 11. ed. 22. 1999. 1985. and Dani Rodrik. “National Borders Matter: Canada-U. 1997. Growth and Equality. Ohmae. 1996. Helleiner. “Tax Competition in Wilhelmine Germany and Its Implications for the European Union.” Political Studies 46(4) (1998): 671–692. The Lexus and the Olive Tree. After the Nation-State: Citizens. The Myth of the Powerless State: Governing the Economy in a Global Era. 17. Duane Swank. 1998.
186. Along the Domestic–Foreign Frontier: Exploring Governance in a Turbulent World. John F. John F. William Pfaff.. 2003. London: Routledge. electronic version. Stack. Croucher. New York: Yale University Press. and Alan Ehrenhalt. 33. Terror in the Mind of God. electronic version. 2004: 35–36. October 4. eds. Mark Juergensmeyer. Bell.” in David Carment and Patrick James. 2001. 29. Stack. 19–36. “Look Again: The Nation-State Isn’t Going Away. 107. 1981: 32–40. 62–70. 1996: 138–155. Princeton: Princeton University Press. eds.. Stack. Daniel Bell. Nationalism and Modernism: A Critical Survey of Recent Theories of Nations and Nationalism.. January 11. NJ: Princeton University Press. Wars in the Midst of Peace: The International Politics of Ethnic Conflict. 1997. 1998. John F. 164–166. 2000. 61–80. 1997: 67. ed. 2nd ed. Bell. 25. Jr. Ibid. Jr.N.” in John F. The International Politics of Quebec Secession: State Making and State Breaking in North America. “Ethnicity and Social Change. 1997: 11–15. “The Ethnic Mobilization in World Politics: The Primordial Perspective. 34. Princeton. Summit.” New York Times. Moynihan. .. Governance and Geography. Cambridge: Harvard University Press. and Lui Hebron. Westport. Barbara Crossette. et al. and David Harvey. 36. Rowman & Littlefield Publishers.” in John F. Ethno-Nationalism: The Search for Understanding. Terror in the Mind of God: The Global Rise of Religious Violence. 2007: 161. Westport. “Ethnicity and Social Change. New York: Palgrave. Stack. Eickelman and James P.. Ankie Hoogvelt. 32. Ethnicity: Theory and Experience. CT: Greenwood Press.. Jr. 26. Smith. and Juergensmeyer.” New York Times.. Jr.. 1975: 142. Stack. and J. Globalization and Belonging: The Politics of Identity in a Changing World. “Ethnic Groups as Emerging Transnational Actors. Berkeley: University of California Press. 115–121. Stack. Globalization and the Postcolonial World. 1999. “Democracy at Risk: American Culture in a Global Culture. Global Civil Society? Cambridge: Cambridge University Press.” 142.” in Nathan Glazer and Daniel P. Piscatori.” International Herald Tribune. 30. 31. Croacher demonstrates just how important global immigration is to both rich and poor countries throughout the world. Jr.QXD 1/13/10 4:43 AM Page 97 Notes 97 24. and Walker Connor. Baltimore: Johns Hopkins University Press. Jr.M06_HEBR9703_02_SE_C06.” World Policy Journal 15(2) (1998): 29–41. Dale F. “Globalization Tops Agenda for World Leaders at U. Globalization: A Critical Introduction. CT: Praeger. UK: Cambridge University Press.” 142. Muslim Politics. 229..” in David Carment. 27. 39. 1998. eds. Juergensmeyer. 2002: 219–228. “Demanding the Right Size Government. John F. Power and Interdependence. Terror in the Mind of God. 2000. Croucher. 37. Knowing the Enemy: Jihadist Ideology and the War on Terror. eds. The Primordial Challenge: Ethnicity in the Contemporary World. Jr. Ethnic Identities in a Transnational World. “The Ethnic Challenge to International Relations Theory.. Cambridge. ed. September 3. Globalization and Belonging. 28. “Ethnicity and Social Change. Westport. An Unruly World? Globalization. 2005: 25. Jan Aarte Scholte. “Canada’s Ethnic Dilemma: Primordial Ethnonationalism in Quebec.. Pittsburgh: University of Pittsburgh Press.. and John F.. London: Routledge. Stack. electronic version. Other studies supportive of this thesis include the following: James N. Mary Habeck. CT: Greenwood Press. 35. Herod. Benjamin Barber. 38.. Keohane and Nye. Rosenau. 1986: 1–5. Keane. A. 1994. Anthony D. Sheila L.
http://www. E. Taking this activist state model to heart. Michael Schuman and Timothy Mapes. A. The Transformation of the State: Beyond the Myth of Retreat. Ibid. “Decentralisation. Edward D. “Demanding the Right Size Government. Scholte. Milner. 2002: 52. May 31. 2004.. The Political Economy of Regionalism. 59. Mastering Globalization: New Sub-States’ Governance and Strategies. London: Routledge. Rama Lakshmi. June 15.. Paquin. 2001: A01. New York: Rowman & Littlefield Publishers. New Regionalisms in the Global Political Economy: Theories and Cases. the Answer Matters Less and Less. 61. 41.. 2006. Fry. Robertson and J. Peter Baker and Susan B.” in G. “Unhappy with the State They’re In. “Who’s in Charge in Jakarta? For Indonesia’s Provinces. 55. 2001. “Regions Resist Kremlin Control: Governors Cling to Power in Defiance of President. “The Day of the Governors. March 30. Breslin. London: Routledge. . June 27. 49. Mansfield and Helen V. electronic version.. 53.M06_HEBR9703_02_SE_C06.” Financial Times.. electronic version. Global Transformation. London: Routledge. et al. “Spain Grants New Powers of Self-Government to Restive Region. July 8. The Encyclopedia of Globalization. Daniel Drezner. 48. Ehrenhalt. M. 47. electronic version. et al.” New York Times. last visited July 18. Kaiser. “Labour’s Forgotten Regions. eds. 8–9.” 57.” Washington Post. “Globalizers of the World.QXD 1/13/10 4:43 AM Page 98 98 CHAPTER 6 Sovereignty 40. Globalism: The New Market Ideology. R.” Wall Street Journal. G. eds. electronic version. New York: Columbia University Press. Sorensen.. Manfred Steger states. “French Parliament Approves Limited Autonomy for Corsicans. 46. Regionalization in a Globalizing World: A Comparative Perspective on Forms. Agence France-presse. Unite!” The Washington Quarterly 21(1) (Winter 1998): 209–225.” June 14. Steger. 2005: 90–113.” in R. Inc. Ibid. 2001. and S. the successful liberalization of markets depends upon the intervention and interference by centralized state power. “Sub-State Governments in International Arenas: Paradiplomacy and Multi-level Governance in Europe and North America. Globalisation and China’s Partial Re-engagement with the Global Economy. Glasser.. Scholte. New York: Palgrave Macmillan. “In order to advance their enterprise. 56. Statute of Autonomy of Catalonia 2006. 45. London: Zed. 42.htm..” New York Times.” Manfred B. H. 54. S. Ibid. Joyce Quin. globalists must be prepared to utilize the powers of government to weaken and eliminate those social policies and institutions that curtail the market.gencat. 51. 2001: A17. 44. Ibid. December 19. 2001. 2001. “Substate Governance. eds. Breslin.net/generalitat/eng/ estatut/preambul. 50. eds.” New Political Economy 5 (July 2000): 205–226. Held. Lachapelle and S. 2001. 52. Actors and Processes. electronic version. Globalization: A Critical Introduction. and Renwick Mclean. 60. Since only strong governments are up to this ambitious task of transforming existing social arrangements. 58.. 2002. 2007. Schulz. 43.” Washington Post. eds. et al. Economist. 1997. 2006. Ibid.
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