The Intellectual and Institutional Development of Globalization - Essay Example

? The Intellectual and al Development of Globalization There are many forces in the world that challenge establishedmodels and practices of state sovereignty. These include the emergence of new policies, the reconfiguration of world trade into gigantic trading blocks, regionalism, and globalization among other factors. States are not what they used to be, and national governments are no longer the locus of power. They now have to divide power with a wide range of actors. Power is parceled out among different agents, both national and international (Friedman, 2008). There is a multiplicity of sites, some real, some virtual, where national transactions are governed. The states now share center stage with international entities like the World Bank, International Monetary Fund, and World Trade Organization. Treaties among states create these international organizations. The WTO, World Bank, and the IMF have been main players in the formation and managing of the modern world economy. These financial institutions have become major targets of the anti-globalization bodies. They are resented and are seen as imposing Western capitalism on unstable states without monitoring the social impacts of their activities (Zweifel, 2006). There are concerns among many countries over their economic sovereignty. Sovereignty is defined as the complete and exclusive control of all people and property within a territory. Key aspects of power, be it political, ideological or economic must be focused within the nation-state. Globalization has challenged the pre-eminence of nation-state, the mounting presence, and increasing responsibilities of non-nation-state actors in overall governance. Economic power becomes decoupled from the nation-state and is, therefore, essential in the progress of 21st century universal control. Global organizations such as the World Trade Organization (WTO), World Bank, and International Monetary Fund were developed to promote post-war reconstruction and economic development. Economically stable governments and corporations advocate for neoliberal policies and free-market solutions of international trade and debt-based finance. These are considered as the routes to poverty cutback support the functions of these organizations. Within the aggressive universal framework, third world nations are left with little choice other than to conform to the pre-set neoliberal program. Consequently, these states are often left with a weak economy and mounting debt. According to Peet (2003), the aim of International Monetary Fund (IMF) is to guard international fiscal stability, particularly by keeping a cap on inflation. This is achieved through pressuring countries to limit public spending. Furthermore, it maintains fiscal stability by making disbursements to nations with balance of payment issues, stimulates growth and employment. Such countries are granted loans and credits to settle their debts and readjust the adopted economic policies so that they are not exposed to further financial crises in the future. Each year, the IMF sends economists to each of its member countries to assess individual nation’s economic condition. The economists examine macroeconomic conditions, exchange rate, monetary and fiscal policies, and other related policies, such as trade policy, labor policy, and social policy. The aim of this research is to give an external check on state’s fiscal decisions that might have an impact on the global economic system. WTO was formed in 1995 and acted as a forum for negotiating international trade agreements. Additionally, the organization aims to lower tariffs and non-tariffs barriers in order to increase international trade. The World Bank original mandate is to provide long-term loans for reconstruction and fund multimillion-dollar infrastructure projects in developing countries. The loans are given in phases to make sure that the borrowing nations move forward with the development reforms. Loans are settled for long periods depending on the nature of the loan. The World Bank has been dedicated to aiding the implementation of the Millennium Development Goals (MDGs), proposed by the United Nations (UN) at the Millennium World Summit in 2000. The IMF is aims at stabilizing global financial markets and national currencies by providing resources required to secure fiscal policies and monetary exchange rate, while the World Bank to rebuild economies by facilitating investment in reconstruction and development (Friedman, 2008). However, these organizations are dominated by developed states, which put their agendas at the expense of developing nations. Developing countries in such situations are susceptible to demands for rapid liberalization. Consequently, this forces them to open their local economies. The globalization of economic activities raises queries about the hope of the nation. A keen observation at the actions of these organizations shows how they national sovereignty is being eroded by them. Further research indicates how even the existence of these institutions produces moral hazards to individual countries. The institutions have more legal power than national governments and, therefore, their influence is immense. Despite their actions being effective, they largely challenge a nation’s ability to shape its domestic and social policy (McGillivary, 2006). The IMF was recently studying the prospects of playing a bigger part in capital movements. This was as requested by the Interim Committee. This additional responsibility could gradually lessen the influence of state governments in controlling capital movements. Individual countries are losing their autonomy of economic management and consequently, the public is worse off. Additionally, they are slow in reaching agreement, have weak capacities to implement decisions and lead states to block recommendations. Zweifel (2006) explains that individual country state is no longer a self-regulating unit. He explains that the crisscrossing structures of power and authority displace the notion of sovereignty is no longer indivisible and exclusive form of public power. The political authorities within countries cannot raise tariffs, as this would breach the agreements made in the WTO forums. National states can no longer have power over their own monetary policies because of open capital international markets. Additionally, they cannot guarantee the economic health for their own citizens since international can overwhelm their countries. Furthermore, these organizations influence political decisions made by individual, national governments. The capacity of these organizations to influence individual governments depends upon the local structures in politics within which they must act. They have the authority to alter policies in one country by pressurizing governments in other countries. Developing countries are fully dependent on these global financial bodies for foreign capital. They are hard pressed to pursue their positions conclusively as they lack resources as compared to developed countries. Additionally, these institutions operate like huge bureaucracies, affecting their response and carrying capacity, and ultimately their output. Their response to developing regions like Africa has in many cases, not been adequate and timely. The way and manner in which these organizations address regional problems in some regions is “wait for something to ensue before we engage.” Their mechanisms are inadequate and sometimes arbitrary (Friedman, 2008). Health and health care ought to be controlled by the state government, specifically by those in the health care sector. In all health care systems, there is an crucial function for the national government in health. This responsibility includes safeguarding and monitoring from infectious diseases, securing clean water, and healthy food for the country’s population. However, due to the high level of direct or indirect involvement in health by the organizations named above, national governments have a diminishing authority and capacity of to influence health determinants and outcomes (McGillivary, 2006). The issue of accountability and transparency is rampant at these international organizations. Most of them assume responsibilities and tasks that go beyond their mission for which they were originally created. They thus have a enormous impact on the lives of people and states in ways that were not possible twenty years ago. They, however, are not accountable to any independent institution action on behalf of the generality of nations they represent. International organizations are  prone to the duplication of projects and mission objectives. This leads to overconcentration on a single agenda or subject, at the expense of other critical areas. Peet (2006) notes that this may negatively affect nations whose problems are ignored at the cost of other issues that are not as critical. These organizations are not open to criticism or public oversight when working on polices, leading to conceit and a disconnection to what is happening in the affected nations. The government officials of borrowing countries are often powerless to question the organizations policies. Such actions are viewed as defiance to their authority and may jeopardize the loans they are offering. The IMF imposes the Washington Consensus policies on developing nations without considering the distinctive characteristics of these states. This makes it difficult for such countries to implement their domestic policies since, at times, there are even counter-productive. The IMF concentrates on economic models with impracticable assumptions about how real economies operate. They do not focus on the economies of the states whose policies they administer, often and mostly work from Washington hence do not have a clear picture of what is happening in most countries. They do not appreciate the political and economic conditions under which most of the governments run. When financial crises occur, the IMF directly puts blame on the countries suffering (Zweifel, 2006). In conclusion, the above discussion shows how these global organizations use precedent accumulated power that often challenges the sovereignty of the nation in which it is applied. Instead of such bodies promoting sustainable development in member countries, they are doing the opposite. In most cases, such immense powers given to these global organizations affect how national governments run the countries and implementation of critical policies. Most recently, their effects have intensified through their involvement in the public sector finances, which are characterized by weak fiscal and institutional policies. This may cause conflicts of interests between such bodies and individual state governments. Countries want a mechanism to control these powerful global institutions. This alternative mechanism is aimed at limiting their freedom of action and minimizes their immense influence. Additionally, the mechanism for regulating international economy should allow these institutions to be progressively decommissioned. Weaker states feel that these institutions are exploiting them and that their national sovereignty is being undermined. Some researchers argue that these global organizations are some transnational authority structures that have displaces states. Additionally, such organizations are fundamentally transforming the kind of authority in the international system. They have displaced and undermined state authority. What is needed is a responsive global governance institution that meets the needs of their member countries. Finally, there must be a balance between sovereignty of states and legitimacy of mandate. References Friedman, T. L. (2008). The Seventeenth-Century and the Dawn of. New York: Bloomsbury. McGillivary, A. (2006). A Brief History of Globalization: The Untold Story. London: Avalon. Peet, R. (2003). Unholy Trinity: The IMF, World Bank and Wto. USA: Zed Books. Zweifel, T. D. (2006). International Organizations And Democracy: Accountability, Politics, And Power. New York: Swiss Consulting Group, Inc. Read More