Question

Please answer the following question and ensure to cite anything taken from any source

The Demise of the State? Globalization and the decline of sovereignty

While some IR scholars believe that globalization is leading to the “erosion of the state,” others believe that the nation-state will continue to remain the most important actors in the international system. Which argument do you find most convincing? Why? Regardless of your answer, what do you believe is the most important challenge that globalization poses to the role of the nation-state today?


Use this lesson below:
Globalization and the Decline of the state? MNCs and the rise of Al Qaida


Scholars of International Relations have long debated not only the exact definition of the concept of globalization but also its purported effects (for a brief overview of the concept watch Watch: “Globalization explained,” https://www.youtube.com/watch?v=JJ0nFD19eT8). Although in recent years one would be hard-pressed to find serious detractors of the concept itself (that is, there is virtually no discussion anymore about whether there really has been a revolution in communication and transportation technologies that have made the movement of goods, money, ideas, and people across the globe much easier, and the world much smaller), there is still considerable debate about what the impact of globalization is on the international system. According to some (see Strange 1997), globalization has led to the “erosion of the state.” Far from being the arbiter of political, social, and economic exchanges within its territory, some scholars have argued that globalization has shifted power away from states to international actors, such as international institutions and private actors, such as Multinational Corporations.

For Liberal IR theorists, globalization is overall seen as a positive process. From an economic perspective, globalization is seen as the driver of greater global prosperity. Globalization is seen as an engine of economic growth, as it encourages greater economic activity and specialization. While they acknowledge that globalization may have short-term drawbacks for societies, as the movements of capital and investment can cause severe economic dislocations on societies that are not well-equipped to compete in the modern economy, Liberal theorists are focused more on the fact that a rising tide lifts all boats. Thus, as Nobel-prize winning economist Paul Krugman argued, it may be true that big corporations gain a great deal from the process of globalization, which allows them to produce goods cheaply in developing states, the workers of the developing states also benefit from this process.

From a political perspective, moreover, globalization is also seen as a positive development. In this sense, arguments about globalization echo the debates about “complex interdependence,” from the 1970s, when Political Scientists Joseph Nye and Robert Keohane (1997) argued that multiple ties between societies, including ties between citizens at the sub-state level, created bonds of interdependence that reduced the effects of relative capabilities. In general, of course, Liberal IR theory is predicated on the notion that increasing interactions between the citizens of states will increase economic and social interdependence, and therefore decrease the likelihood of violent conflict in the international system. It will ultimately also diminish the importance of states, as they are increasingly seen as obstacles to the efficient operation of a global market for goods and services. While states may not give up their position willingly, proponents of globalization argue that they have no choice. Their economic survival requires them to attract international capital, which then requires them to lower entry barriers and to provide assurances of free access, which then reduces the power and influence of the state in the long run.

While Realists acknowledge that the process of globalization is taking place, and they also realize that it has empowered some non-state actors, they are skeptical about the pacifying effects of globalization in general. They point out that closer and more frequent interactions between societies (i.e. complex interdependence) could lead to better relations, but they could also lead to more friction and more causes of conflict. More importantly, in the context of our topic for the week, Realists believe that to paraphrase Mark Twain, the demise of the state has been highly exaggerated. Although he is not a Political Scientist (and is therefore not officially associated Martin Wolf (2001) argues that while globalization is real, and has real implications, it will not lead to the end of the state. It will, however, have variable effects on different states.

While IR theorists and economists, therefore, disagree as to the effect of globalization on the nation-state, the literature on international relations and the international economy argues that globalization has increased the power and importance of other actors in the international system (even if the state is not about to become extinct). According to many observers, the primary beneficiaries, and drivers, of globalization have been Multinational Corporations (MNCs). It is these private corporations that direct the flow of global investments and production. By using their wealth to access poorer societies, by extracting this wealth, and by using their political clout to remove all barriers to the free exchange of goods and to diminish regulations, MNC’s have become serious political actors in the international system. MNCs have an enormous effect on international trade and capital flows, and they are assumed by many to have the political clout to match. The question remains, however, as to whether MNCs have become rivals to nation-states as the most influential and powerful actors in the international system. While they clearly have significant political influence, especially in developing nations, our readings on multinationals (Stopford, 1998: Spar 1998, and Henisz and Zellner, 2010) suggest that there are certainly limits to their influence. Not only can governments affect the capabilities and reach of multinationals, as the readings show, but multinationals also have to be concerned about the demands and expectations of their customers.

Globalization has without a doubt also had an impact on international terrorism. While international terrorism is certainly not a new phenomenon, it wasn’t until the 1960s that it became a truly global phenomenon, as members of various terrorist organizations engaged in high-profile attacks against civilian targets across the world, including the much-publicized hijackings of civilian airliners during the 1970s and the attacks against the Munich Olympic Games in 1972. The rise of international terrorism, therefore, took place in the same period that the process of globalization really took off (Kiras, 2011) The development of the global Jihadist network, moreover, has been argued to show the effects of globalization in a variety of ways. The effects of globalization have been identified as among the possible causes of the grievances expressed by the members of the global Jihadist network. As Audrey Cronin argues, moreover, the process of globalization has allowed the movement to sustain itself and to obtain capabilities that make it, and other terrorist organizations, a serious threat to international stability.

Answer

Eric Schneider

Professor Gullet

International Relations Paper

11 November 2014.

Globalization Has Not Led to the Erosion of the Sovereign State

            Two sides of the argument on the impact of globalization on the sovereign state have emerged. One side posits that globalization has led to the “erosion” of the sovereign state (Sassen 14). The other posits that the nation-state state remains the most important actor within the international political system (Mann 481). I find the latter arguably the most convincing because non-state actors cannot take over all the roles currently being performed by nation-states. For example, national governments have the power to restrict the reach of all multinational corporations regardless of how powerful they may be (Scherer and Palazzo 906). Moreover, non-state actors are always concerned about other things apart from international politics. A case in point is the tendency by multinational corporations to look first and foremost after the interests of their customers. The aim of this paper is to explain why globalization will not erode the nation-state. It also explores what may be regarded as the most important challenge posed by globalization to the nation-state today.

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            Globalization is not eroding the nation-state. This is simply because increased communication and movement of goods and services across countries do not quite render sovereign states irrelevant (Boyer and Drache 776). The notion of sovereignty will always provide an important political anchor for companies operating in an anarchic international system (Berger 58). Although greater interaction and complex interdependence reduce the likelihood of violent conflicts among states, it does not reduce the likelihood of conflict at other levels, such as regional, ideological, socio-cultural, and religious. According to Wolf, the threat of conflict at these other levels will remain real, and non-state actors will undoubtedly look up to sovereign states for political leverage (183). To demonstrate this, one may point out the tendency by multinational corporations to rely on political affiliation with their home countries to assert their influence abroad.

I believe that the most important challenge to globalization today is posed by multinational corporations. This is because they have immense economic resources and political clout at their disposal, which they rarely hesitate to use to arm-twist the policies of poorer countries, especially in the developing world. The governance gap that has been left by nation-states is increasingly being filled up by these corporations with the intention of safeguarding their economic interests. Nation-states lag behind in terms of creating an ideal environment within which the emerging globalized markets can operate efficiently. No parallel socio-economic institutions have been developed by nation-states to cater to the emerging globalized market. This situation may cause multinational corporations to step in with a view to providing alternative frameworks for use in regulating transactional business activities.

Unless sovereign states step up efforts to take charge of governance issues within the international political system, globalization will transform them. This transformation process may be said to have already started, whereby states are being embedded into the broader microcosm of the international arena. If left unchecked, multinational corporations will lead the way in the formation of a market society in which political issues are dominated by aspects of economic governance. Such overemphasis on economic aspects may lead to the abandonment of other aspects of human life such as culture, religion, social wellbeing, and democracy. 

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In conclusion, it is too much of an exaggeration for scholars to assert that globalization has led to the erosion of the state. On the contrary, globalization has led to a phenomenon where multinational corporations and other non-state actors are increasingly taking advantage of the governance gap at the international level to embed the nation-state into the wider system of a rapidly emerging globalized society. Thus, multinational corporations are an embodiment of the most important challenge that globalization poses to the role of the nation-state today.

Works Cited

Berger, Suzanne. “Globalization and Politics”. Annual Review of Political Science, 3.1 (2000): 43-62.

Boyer, Robert, and Drache, Daniel. (eds.) “States against markets: The limits of globalization”. Canadian Journal of Political Science, 30.4 (1997): 776-777.

Mann, Michael. “Has globalization ended the rise and rise of the nation-state?” Review of International Political Economy, 4.3 (1997): 472-496.

Sassen, Saskia. Losing Control?: Sovereignty in an Age of Globalization. New York: Columbia University Press, 1996. Print.

Scherer, Andreas, and Palazzo, Guido. “The New Political Role of Business in a Globalized World: A Review of a New Perspective on CSR and its Implications for the Firm, Governance, and Democracy”. Journal of Management Studies, 48.4 (2011): 899–931.

Wolf, Martin. “Will the Nation-State Survive Globalization?” Foreign Affairs, 80.1 (2001): 178-190.