Globalization and National Sovereignty

The impact of globalization on state and state sovereignty is a matter of debate. There are
three main schools of thought dominate the debate on the effects of globalisation on states. The
Hyperglobalists predict their dissolution into the “one world” market. The Sceptics believe that national
governments still largely manage the globalisation process. The transformationalists see states
dynamically evolving to respond to the transnational socio-economic and technological trends and
factors. In fact all states in the end lose much of their ability to control capital forces, economic flows
and even shape their domestic public opinion as they are under pressure from the supra-national
institutions and Multi National Companies (MNCs).

Globalisation is the spread and intensification of cultural, economic and social relations
across international borders. It affects almost everything from communications and economics to
politics, society and technology. It is the increasing and intensified flow of capital, goods, ideas,
information, people and services in between countries. It produces cross-border integration of a number
of cultural, economic and social activities. There has been increased inter-dependence among the
nations. Entrepreneurship and global social networks, the reduction of communication costs,
technological innovation and trade and investment liberalisation are the main driving forces behind this
interdependence. Global communication and transportation networks facilitate the globalisation of
economic, political and social forces.

Most observers of globalisation agree that it affects national governments, communities

The Hyperglobalists View: Scholars like Martin Albrow, Kenichi Ohmae and Susan Strange support
this view. According to this perspective, the growing interconnectedness of national economies through
globalisation negates the significance of territorial boundaries. It paves the way for the demise of the
sovereign nation-state. The hyperglobalists contend that a crucial effect of globalisation is to reduce the
space for states in economic policies. With the creation of a single global market, globalisation
effectively denationalises the economies of sovereign states through the establishment of transnational
networks of finance, production and trade. In this borderless economy, national governments have little
choice. They have to create policies consistent with the requirements of global capital and international
competitiveness.
The Sceptic View: Robert Gilpin, Paul Hirst, Stephen Krasner and Grahame Thompson are the main
sceptic thinkers. They believe that little has changed in the international arena. They argue that the
impact of globalisation on the sovereign state is exaggerated. According to them, the state is not the
victim of this process but rather its main architect. This view emphasises that sovereign states play a
central role in the active promotion and regulation of cross-border economic links. Still the states
continue to negotiate the global regulation of multilateral trade agreements and drive the emergence of
supranational organisations. According to sceptics, the sovereign state is the sole institution with the
responsibility for establishing the pre-conditions for economic activity. Transnational players like MNCs
need capable states and a stable state system to function successfully.
The Transformationalists View: Scholars like Anthony Giddens, James Rosenau and John Ruggie
belong to this school. They take a middle position between the hyperglobalists and the sceptics.
According to this perspective, the state is neither automatically diminished by globalisation nor
unaffected by it. The role of the sovereign state in the international system is being redefined by
globalisation. States themselves recognise that the authority, power and functions of government must
be transformed in response to the growing interconnectedness of the world.
Globalization and State Sovereignty
Sovereignty is the central attribute of the state as a form of political organization. It is the
supreme power of the state which makes the nation free from internal or external intervention. Internal
sovereignty means that the state is not subjected to any internal organisation, outfits or individuals.
External sovereignty means that the country is not subjected to the will of any foreign nation.
Sovereignty does not signify merely a certain degree or quantity of power. Sovereignty signifies
simultaneously a right to act and a power to act.
Impact of Globalization on State Sovereignty
1. Decreased Economic activities of State: The process of liberalisation- privatisation has acted as
a source of limitation on the role of the state in the economic sphere. Public sector enterprises are
getting privatized and state presence in economic domain is shrinking.
2. Decrease in the role of the State in International Economy: The emergence of free trade,
market competition, multinational corporations and international economic organisations and
trading blocs like European Union, NAFTA, APEC, ASEAN and others, have limited the scope
of the role of state in the sphere of international economy.
3. Decline of State Sovereignty: Increasing international inter-dependence has been compelling
each state to accept limitations on its external sovereignty. Each state now finds it essential to
 accept the rules of international economic system, the WTO, the World Bank and the IMF. The
role of MNCs has also been growing in national and local politics as they play a significant role
in shaping the state decisions and policies. Their key objective behind influencing the state
decision and policy-making is to promote their vested interests.
4. Growing People’s Opposition to their Respective States: Globalisation has encouraged and
expanded people-to-people socio-economic-cultural relations and cooperation in the word. The
IT revolution and development of fast means of transport and communication together making
the world a real Global Community. The people of each state now deal with people of other
states as members of the World Community. The loyalty towards their respective states
continues, but now the people do not hesitate to oppose those state policies which are held to be
not in tune with the demands of globalization.
5. Reduced Importance of Military Power of the State: The state continues to maintain its
military power as an important dimension of its national power. However, the strength being
gained by movement for international peace and peaceful coexistence as the way of life has
tended to reduce the importance of military power of the state.
6. Increasing Role of International Conventions and Treaties: Several international conventions
and treaties have placed some limitations upon all the states. All the states are now finding it
essential to follow the rules and norms laid down by such conventions. They realise the need to
fight the menace of terrorism and rogue nuclear proliferation. They have shared responsibility for
protecting the environment and human rights. The treaties compelled all the states to accept such
rules and regulations as are considered essential for the securing of these objectives.
7. Decline in Public Expenditure on Public Welfare Policies: Most states appear committed to
reducing social expenditure on public welfare programs under the influence of globalization.
They introduce measures such as labour market deregulation and lowered tax rates which
facilitate greater economic competitiveness. However, they impact adversely on rates of poverty
and inequality. In particular, globalisation appears to be encouraging, if not demanding, a decline
in social spending on public welfare programmes and policies.
Globalization has changed the role of the state in many ways: politically through
interdependence and independence of states, socially through the problems and threats of terrorism and
deadly diseases, technologically through the media and internet and economically through the change
from national to global economies. The state has moved from a controlling to a protecting role internally
in facing the problems that globalization has caused, but also from an authoritative to a dependent figure
externally between the sovereign state age to current unfailing interdependence. Globalization is often
seen to have lowered the importance of the state, but in the end, the states that will remain the most
successful in the face of globalization is those who adapt to the changes their role makes.