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POLS G79 - Globalisation and Governance – Essay One

Is there a future for the nation-state in an era of globalisation?


If so, what future?
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Index

Page 3 Introduction

Page 5 The challenge globalisation presents to the nation-state


- A reduced ability to regulate the economy
- An increase of transnational bodies
- Super and sub national centres of power

Page 9 Where the nation-state can go next


- Neo-medievalism: the dissolving nation-state
- The resilient nation-state
- The altered nation-state

Page 13 Conclusion

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Introduction

For proponents of the traditional study of international relations – most especially

those originating from the realist and neorealist schools of thought – there is one primary

unit that determines the way we interact globally. This unit is the nation-state, an

amalgamation of “nation” (one people) with “state” (one government). If one were to

imagine an abstract image of the globe one would see gridlines. These lines mark off

different nation-states, each one separate from the others and sovereign inside its defined

and unmoving borders. These nation-states interact with each other, be it through war or

trade in a relationship that is theoretically simple. Each nation-state is “equal” in terms of

having sovereignty (self-determination) and the sole right to use legitimate force inside

its own borders. Actors in the international system such as transnational businesses,

international governmental organisations (IGOs hereafter) and international non-

governmental organisations (INGOs hereafter) have significantly less importance than the

nation-state. They represent the “low” politics of trade and business and temporary

agreements compared to the “high” politics of the nation-state, with its role of protecting

its sovereignty from attack, and of maintaining stability inside its borders. In a world of

anarchy, nation-states provide oases of security and stability in which non-state actors

have the ability to operate.

Globalisation affects the traditional conception of world organisation. Whether

globalisation is understood as an example of increasing global capitalism - the success of

the neo-liberal economic project - or as a deeper and more complex example of increased

interconnections of politics, culture and finance globally, it suggests that the world is not

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a collection of states floating in a sea of anarchy. The very conception of anything being

“global” – across the entire planet – contradicts traditional understandings of world

affairs and nation-state primacy, and introduces the possibility of non-state actors

(businesses, IGOs and INGOs) having a role equal or superior to the nation-state. Non-

state events like capital flows through international markets, private investment affecting

foreign currency prices, and multinational businesses providing (and removing) jobs

according to profitability impact those living inside individual nation-states, and

apparently defy the individual nation-state’s control. Any truly global movement

transcends the traditional nation-state’s sovereignty, and occurs outside of its authority.

The sovereignty to direct any global event is a global sovereignty, and suggests that an

authority (or series of authorities) other than the nation-state must be included in our

understanding of international relations.

This paper asks whether the nation-state has a future in an era of globalisation,

and what that future may be. It begins by outlining the challenge globalisation presents

to the nation-state, and progresses to an examination of where the nation-state may go

next. Because of the sheer complexity of the issues involved, and the enormous wealth

of topical information available on the subject, this paper cannot hope to be fully

comprehensive. Nevertheless, by its conclusion the reader will have a clear

understanding of the effect globalisation has on the notion of the state, and what form or

forms the nation-state may assume or maintain in the future.

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The challenge globalisation presents to the nation-state

Globalisation can be understood as an “intensification of global

interconnectedness” (McGrew, 1998, pp. 300) that transcends states and societies as

individual units, and may even denote a fundamental reorganisation of human social

activity to an inter-regional or transcontinental form. If globalisation in its most complete

sense takes effect then the nation-state will be its chief victim (Waters, 2001: pp. 98).

The world would be interconnected in global institutions of politics, economics, and

society. Citizenship - if it were to exist at all - could be understood as “global

citizenship”, a citizenship of shared existence including all humans and the role of

nationalism, and hence the role of the nation-state, would be irrelevant. However, even

without globalisation creating some form of “world-state” it still provides significant

challenges to the nation-state. As mentioned in the introduction, the very existence of

any truly global tendency, be it in a market or in a political organisation, poses problems

for the nation-state. The inability of any national actor to exert authoritative influence on

the global stage means that global tendencies potentially escape sovereign control.

Three distinct aspects of globalisation that challenge the nation-state are identified

below. The first is the reduced ability of the nation-state to exert influence on its

economy when economic transactions increasingly take place on a global level. The

second is the increase of transnational bodies, be they political (the UN), economic

(NAFTA), a combination of the two (the EU) or some form of NGO (ranging from

businesses to civilian pressure groups). The third and final aspect is the emergence of

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super-national and sub-national centres of power (ranging from local councils to the

aforementioned UN).

- A reduced ability to regulate the economy

Holton (1998, pp.80) says that “flows of investment, technology,

communications, and profit across national boundaries are […] the most striking

symptom of global challenge to the nation-state”. The regulatory ability of the nation-

state is reduced because those it wishes to police operate outside its sovereign borders,

and the existence of global actors means that the nation-state is “sidelined by world

market forces which are stronger than even the most powerful states” (Hirst and

Thompson, 1996, pp.175). The nation-state therefore has a severely reduced ability to

control economic flows in globalisation, and loses control of the capital that it needs to

sustain itself (for it needs capital to pay for the cost of maintaining its internal authority

and its external sovereignty). The nation-state is subsumed into the global economic

system and becomes what Kenichi Ohmae would call a “local authority” of that system

(Hirst and Thompson, 1996, pp.176). The nation-state changes from being the primary

unit of international relations to being a provider of public goods and infrastructure to

global businesses. A harsh fate indeed for what was once the key unit of global

interaction.

The economic challenge of globalisation to the nation-state is one of decreased

legislative ability (or sovereign control) over markets inside the state, and increased

market ability to affect the nation-state. It is a twofold problem of losing control and

being increasingly controlled, with global organisations and global trends transcending

and perhaps ultimately replacing the nation-state as the primary units of international

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organisation or importance. This leads to what Oran Young calls a “retreat from the

postulate of the state as the fundamental unit of world politics” (Young in McGrew and

Lewis, 1992, pp. 263), and to a conception of an international system of mixed actors

without a settled hierarchical relationship.

- An increase of transnational bodies

“The essence of the state – and the main practical condition for its viability – lies

in the fact that sovereign and autonomous political institutions are capable of deriving

legitimacy from a distinct citizenry located in a defined territory” (Cerny in Kofman and

Young, 1996, pp. 123). If nation-state sovereignty is reduced, or its autonomy decreased,

then the question remains of what institutions or bodies are replacing it in matters of

governance, most especially forms of governance that require a global reach. This

question leads us to the second serious challenge to the nation-state in globalisation, that

of transnational bodies.

Transnational bodies can be IGOs, INGOs or businesses. IGOs such as the UN,

the EU, the IMF and the WTO/GATT present challenges to traditional nation-state

sovereignty through international (if limited) legislative or coercive power. INGOs such

as Greenpeace International and Amnesty International “outflank nation-states and

threaten borders [while] their complexity defies command and their capacity to link

diverse people […] to common causes and interests undermines the saliency of the state”

(Waters, 2001, pp. 117). INGOs have the ability to unite people from many nation-states

into new groupings based on shared interests that may collectively have substantial global

financial and political influence, particularly through lobby groups affecting individual

nation-state autonomy. Finally, businesses, in the form of transnational corporations

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(TNCs), are “often larger and more powerful than many governments” (Waters, 2001, pp.

124), and may have the ability to affect both nation-state sovereignty and autonomy while

pursuing their own goals. TNCs can demand labour concessions, taxation concessions,

and trade concessions from nation-states in exchange for basing their manufacturing or

production divisions in a particular country.

- Super and sub-national centres of power

Daniel Bell (in Waters, 2001, pp.123) is quoted as saying that “The nation-state is

becoming too small for the big problems of life, and too big for the small problems of

life.” The nation-state is seen as becoming unable to control the increasingly global

problems it (or its people) faces, and unwieldy in dealing with local issues like regional

education, regional governance, and regional social matters. In short, the “central

paradox of globalization is that rather than creating one big economy or one big polity

(what has also been called the ‘airport bookshop’ image of globalization), it also divides,

fragments and polarizes” (Cerny in Germain, 2001, pp. 137), shifting the effective

deployment of governing power to super and sub-national levels.

On the international level, this includes bodies like the aforementioned UN, EU,

IMF and WTO/GATT, which all have some form of limited legislative and/or coercive

powers. On the local (or sub-national) level, there are challenges to state sovereignty

through local councils, regional governments (like the Scottish Parliament and the Welsh

Assembly in the UK), and other forms of decentralised governmental organisation. Thus,

a person living in Scotland can be both a European Union citizen and a British subject on

their passport, Scottish by proclamation, and have their local services provided by the

Glasgow City Council. This would appear to suggest that the state “is becoming, once

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more and as in the past, just one source of authority among several, with limited powers

and resources” (Strange, 1996, pp. 73).

Where the nation-state may go next

It is suggested in the section above that the nation-state faces many potential

problems in an era of globalisation. There are three key conceptions of how the nation-

state may respond to these challenges, each of which we examine below. One view is

that the nation-state is dissolving as in institution, and is obsolete. Another is that the

nation-state has increased importance for maintaining and evolving globalisation trends,

and is essential to organisation stability. Finally, there are those who think the nation-

state faces restructuring through globalisation, and while it will not disappear, it will

evolve into an “altered” state, with a substantially different role from the Keynesian

Welfare State we have known during much of the 20th century.

- Neo-medievalism: the dissolving nation-state

It is possible nation-states are being surpassed by other bodies and authorities and

are becoming “unnatural, even impossible business units in a global economy” (Ohmae in

McGrew, 1998, pp. 303). Because of increased activity by IGOs, INGOs, TNCs and

other global or local actors the nation-state is increasingly archaistic, and will eventually

be obsolete. At their most extreme the changes wrought by globalisation can be

understood to mean that in “place of the self-contained nation-state is a network,

modelled after transnational firms, detached from territorial forms of order and

representing an open system without borders” (Dittgen, 1999, pp.165). Thus the nation-

state and its national economic organisation is effectively dissolving, and a “world closer

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to that of late medieval Europe, with its elaborate networks of trading cities” (Barry

Jones, 2000, pp. 224) is emerging to replace it.

As Stephen Kobrin pointed out (Prakash and Hart, 1999, pp. 167), neo-

medievalism does not suggest that we are about to return to an age of lords and peasants.

At its most basic neo-medievalism is about regarding the nation-state, and “state” politics

as a whole, as something of a historic abnormality. The Peace of Westphalia in 1648 is

taken as marking the beginning of the modern state system, and the materialising global

world of interconnection is taken as marking its end. Neo-medievalism proposes that

“Discrete and meaningful borders and the clear separation of the domestic from the

foreign, indeed the very idea of the international, may be a modern anomaly” (Kobrin in

Prakash and Hart, 1999, pp. 182). The medieval existence of overlapping authorities and

multiple or overlapping loyalties may return to us, albeit in a substantially altered form,

due to the forces of globalisation. These authorities and loyalties would create a new

international power structure that “undermines the sovereignty of states” (Waters, 2001,

pp. 100), and potentially even replaces them altogether.

- The resilient nation-state

For realists (and others) the nation-state is far from finished, and indeed

“importance of the state has even actually increased in some areas, certainly with respect

to promoting international competitiveness through support for R & D, for technology

policy, and for other assistance to domestic firms” (Gilpin, 2001, pp. 363). The

challenges that globalisation presents to the nation-state are not regarded as

insurmountable, and globalisation may even be a construct of the nation-state rather than

an exclusionary force aligned against it. Virtually all “states have become involved in the

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process of internationalization” (Jessop in Delorme and Dopfer, 1994, pp. 109), even if

only to maximise potential national benefit or to minimise possible harmful effects.

Globalisation need not reduce state autonomy, and Keohane (McGrew, 1998, pp.

316) goes so far as to suggest that nation-states use international regimes to accomplish

policy that benefits them on a national level, and which may not be possible through

unilateral action. Furthermore, it can be argued that nation-state need not be replaced or

significantly ‘reconstructed’ in the face of globalisation, and “remains the most powerful

institution to channel and tame the power of markets” (Boyer in Boyer and Drache, 1996,

pp.). The state is currently the most effective method of organising international relations

currently in existence, and while bodies like the UN or EU possess limited power on an

international level, and bodies like the Scottish Parliament have limited power on a

regional level, the nation-state must remain the primary unit in international relations. In

short, “The nation-state is still the most important institution to ensure the rule of law in

an explosive world” (Dittgen, 1999, pp.174).

- The altered nation-state

It can be said, “globalization is authored by states and is primarily about

reorganizing rather than bypassing them” (Panitch in Mittelman, 1996, pp. 85). This is a

similar assertion to the ‘resilient state’ suggestion of nation-state involvement in

globalisation above, but assumes a slightly different outcome. Rather than suggesting

that the nation-state is fated to dissolve in the face of globalisation, or that it will remain

the primary unaltered unit of international relations, there is a postulation of an ‘altered

state’. The nation-state is said to exist now in one form, to have existed in the past in

another, and to be transforming itself actively into a third. This is a proposition that

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assumes a resilient but elastic nation-state, one that evolves over time, and which

becomes more or less influential in different spheres depending on the utility of that

influence.

One example of this ‘altered state’ thesis is that proposed by Philip Cerny, who

suggests that “the nation-state is not dead” (Cerny in Germain, 2000, pp. 133), although

its role has changed. He envisages the transformation of the nation-state from being a

governing system concerned with welfare to being a system concerned with competition.

Unsurprisingly he calls this the ‘competition state’. The competition state exists in a

world of increased fragmentation and globalisation, and is characterised by a decrease of

public services and an increase of private services or industry. The competition state is a

mix of civil and business organisation, and is concerned with effective returns on

investment or effort. In the long run the “state is developing into an enterprise

association, with key civic, public and constitutional functions […] subordinate to the

global marketplace” (Cerny in Kofman and Young, 1996, pp. 136).

Another example of the ‘altered state’ is envisioned by Leo Panitch. Panitch

thinks that “globalising pressures even on advanced industrial states has led to a

reorganisation of the structural power relations within states [but has] not diminished the

role of the state” (Biswas, 2002, pp. 18). The nation-state is changing, but is not facing a

disempowerment or loss of sovereignty. Indeed, Panitch would understand globalisation

as being authored by nation-states, and the role of the state in collecting taxation,

providing security, and having the monopoly of legitimate violence inside its sovereign

borders as being unchanged. Globalisation and alteration of the state role is an attempt to

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secure “global and domestic rights of capital” (Panitch in Biswas, 2002, pp. 18), and not a

neo-medieval dissolution of the state apparatus.

If true globalisation is occurring then we must evolve our understanding of human

interaction and organisation from one based on nationalism to one based on a global

society. We must create new paradigms of human communication, politics, and culture

to deal with the problems of conceptualising a world of interconnection and

interrelations. This is what neo-medievalists forecast, and this is why they predict the

‘death’ of the nation-state as a useful unit in the understanding of international relations.

However, advocates of the ‘resilient state’ and the ‘altered state’ both say globalisation

need not be understood as something challenging to the nation-state. They would argue

that in the face of globalisation the nation-state can persevere, either almost unchanged or

in an evolved form, and that it may even be the primary author of globalisation

tendencies.

Conclusion

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The future of the nation-state in an era of globalisation is a topic pertinent to all

the people who live inside a state, and is an increasingly important subject as global

tendencies play an expanding role in the political rhetoric of our day. Whether or not

some cataclysmic change to our method of governmental organisation is looming, it is

vital that we attempt to understand how political, economic or social interconnections

affect the governance of people in individual countries, regions and continents.

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