What Roles Do International Organisations Play in Global Politics - Essay Example

What roles do International Organisations play in Global Politics? Inserts His/Her Inserts Grade Inserts s Name (19, February, 2012) Introduction Globalisation has allowed firms to grow substantially as we move into a boundary less world. Multinational companies operate in different countries and they have also accumulated great power on a global scale. With the evolution of international organisations financial markets have also become extremely complicated and interdependent. This has made the world interdependent which is one of the most significant contributions of international organisations. The role of international organisations has also increased in global politics as MNCs accumulate more and more power. Governments, especially of the less developed countries, are heavily dependent on large organisations as they provide job opportunities to local people. MNCs bring with them large investments which is considered important in the economic growth of a country. This makes the role of international organisations important with regards to global politics. In this paper we will attempt to highlight the role of international organisations on global politics. Evolution of international organisations will also be discussed briefly. Evolution of International Organisations Rapid industrialisation was witnessed in the 18th and19th century as firms started mass production of goods. International trade also increased slowly and firms began to expand into different countries. This facilitated growth of private enterprises as companies started to engage in production of goods and services. This is the time when seeds of international organisations were sown and organisations started to accumulate wealth and power. Agriculture output in Europe increased in the 17th century which facilitated a population growth. This growth in population meant facilitated industrialisation as people started to seek other professions. Also the living standards of the population started to increase greatly in the 17th century which played an important role in fuelling worldwide industrialisation (Lucas, 2002). When standards of living were higher technological progress was made which again facilitated the process of industrialisation. Firms began to use advance technology to manufacture products. Mass production became possible which again strengthened private firms and helped them to grow even more. Another important development was that road system was improved and railway system was overhauled, and this helped different firms reach a wider target market (Meier & Rauch, 2000). In the 19the century experts started to advocate capitalism which they thought was responsible for the progress of the world. The doctrine of capitalism gave boost to private enterprise (Scott, 2005) and because no restrictions were made as to the size of private entity, firms began to grow larger and larger. With the start of 20th century companies began to expand greatly. Firms had accumulated so much power that they started to play an active role in global politics. An example would be that of Henry Ford and other businessmen who played a role in the formulation of League of Nations (Watts, 2005). On the other hand businessman also made money out of war by producing weapons and ammunitions on all sides. This is another way in which organisations became involved in international politics. Since the two world wars firms have become larger than ever and continue to grow at a great pace. Role of International Organisations in Global Politics  International organisations are making an incredible influence on global politics. They are not only playing a role in shaping global policies in their favour but are also playing an active part in international relations. Multinational organisations have also played a great role in making the world connected and interdependent. Now an African country cannot remain oblivious of what is happening in Europe or Asia. This is how interdependent global markets have become. International organisations have also played a role in development of financial markets which has made the world more dependent on large organisations. The role of international organisations in global politics will be discussed below in detail. Foreign investment is considered extremely important in economic progress of any state. This is why countries often compete with one another in order to attract international organisations. Multinational organisations use their influence to shape governmental policies. Often international organisations use threats like withdrawal from markets to influence tax or other economic policies (Barnett, 1975). This how international organisations play a role of influencer on local policies. These organisations are only interested in securing their profits and due to their large size countries end up giving in their demands. Large international organisations also play a role in global politics by impacting on international trade. These organisations influence policies regarding international trade so that their business does not suffer. For example if a country plans to reduce import duties on items that are being produced by an international organisation in the country then the organisation will not allow such a policy to be enforced. Because this policy will adversely impact on the profits of the firm, international organisation will oppose this to the fullest. This will in turn affect trade relations between countries. International organisations also play a role in global politics through patents (Carson, 2012). Large firms acquire patents for technologies or medicine and then charge abnormal profits from customers. Companies go for patents in order to reduce competition and increase their power. If a firm will hold a patent of software or a life saving drug then that firm can have considerable impact on the policy of the local government. Local governments will have no option but to listen to MNCs as they have the patents and local governments have to respect those patents. Tax is another area where international organisations play an important role. Firms try to get lower tax rates in order to increase their profits and they don’t let governments implement tax measures. This directly results in loss of revenue for governments which in turn affect lives of the common people. International organisations also don’t let governments come and go easily. Governments which are friendly to multinational corporations are always expected to stay for a longer period of time. International organisations spend loads of money in the political process so that their interests are secured and a friendly government assumes power. Even in a country like United States international organisations have a huge role to play in politics (Reich, 2010). This can have ramifications for global politics because United States has a great role to play in international politics. Firms that have interests vested in foreign countries will always want US to have a particular policy with those foreign countries. This is how global politics is being influenced by international organisations. Political spending by corporations is legal in United States and this changes the shape of international politics (The New York Times, 2010). Corporations of United States have interests in different countries and they would never want their own profits to come down. This is why corporations will play an important role in global politics. International organisations would want favourable policies for regimes that are supportive of international organisations. This is just one way in which global politics will change in future. The role of international organisations is also huge in creating interdependencies between countries. The recent economic crisis was an example as to how international organisations influence global politics. MNCs have their share in all countries and also have stakes in stock markets of the world. This means that an international organisation that is based in United States will also have stake in Mexican, Japanese, or European stock market. This has made the whole world interdependent as any catastrophe in one country can impact the whole world. This internalisation of finance is due to international organisations. Also when countries are interdependent global politics comes into play. If a multinational organisation fails then the mess is too big for any country. A perfect will be that of recent bailouts of US investment banks. These investment banks were bailed out because the world feared economic depression. Also USA had to refinance its war expenditure as a result which again had an impact on world politics. This is the stake of MNCs in world politics today as no country is immune from their presence. The cost of the bailout was eventually bore by the governments after the 2008 economic crisis (Curtis, 2011). This shows the extent to which international organisations play a role in global politics. All the governments came forward and bailed their banks out because of the power these corporations have accumulated. Even experts agree that bailouts were not in the interest of governments but still governments bailed banks out (Bowley & Merced, 2009). International organisations have shaped global politics in a manner that is suiting those particular organisations. Conclusion Corporations have grown substantially in the past 2 centuries as they expand into different countries. The chain of MNCs in different countries has made organisations not only strong but also an important player in global politics. International relations are shaped by international organisations as they influence policy in the way in which that best suits them. The role of international organisations has also become important as they have made economies interdependent. This has also made considerable influence of international organisations in the realm of global politics. Bibliography Barnett, Richard. 1975. Global Reach: The Power of the Multinational Corporations. New York: Simon and Schuster Bowley, G. & Merced, Michael J. de la. 2009. U.S. May Enlist Small Investors in Bank Bailout. The New York Times. Retrieved on February 19, 2012 from http://www.nytimes.com/2009/04/09/business/09fund.html?pagewanted=all Curtis, Polly. 2011. Reality check: how much did the banking crisis cost taxpayers? The Guardian UK. Retrieved on February 19, 2012 from http://www.guardian.co.uk/politics/reality-check-with-polly-curtis/2011/sep/12/reality-check-banking-bailout How Corporate Money Will Reshape Politics. 2010. The New York Times. Retrieved on February 19, 2012 from http://roomfordebate.blogs.nytimes.com/2010/01/21/how-corporate-money-will-reshape-politics/ Lucas, Robert E., Jr. 2002. Lectures on Economic Growth. Cambridge: Harvard University Press, pp. 109–10 Meier, G. & Rauch, J. 2000. Leading issues in economic development. Oxford: Oxford University Press Reich, Robert. 2010. Two kinds of American corporations – and their politics. The Christian Science Monitor. Retrieved on February 19, 2012 from http://www.csmonitor.com/Business/Robert-Reich/2010/0914/Two-kinds-of-American-corporations-and-their-politics Scott, John. 2005. Industrialism: A Dictionary of Sociology. Oxford: Oxford University Press Tucker, C. 2012. C. 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