The Impact of Globalization on the Effectiveness of Traditional Policy Instruments - Essay Example

With the increase in global interconnectedness, the scope of strategic policy choices available to individual governments and the effectiveness of many traditional policy instruments tends to decline" (Held and McGrew 2003: 13). I. Introduction Globalization has become a major trend in most parts of the world, especially with most countries accepting globalization processes in their political and economic activities. Various contemporary scholars from different fields of discipline support the belief that globalization is the main concept in these contemporary times. Although there is no single definition for globalization, those who support its tenets believe that as interconnectedness is advancing in most economies, national governments are also losing their relevance and their power to impact on economic outcomes. Based on such perspective, the state seems to have become a mere pawn in the globalized economy. Held and McGrew (2003, p. 13) point out that "[w]ith the increase in global interconnectedness, the scope of strategic policy choices available to individual governments and the effectiveness of many traditional policy instruments tends to decline". This paper shall discuss this statement, considering any supporting proof or evidence to this statement, and possibly discussing any claims contrasting such statement. This study is being carried out in order to establish a clear evaluation of the above statement, as a means for this student to establish a clearer and more logical assessment of the claim. A better understanding would likely provide assistance also for interest groups and other scholars in their better understanding of globalization and state roles. II. Globalization, general context In the current globalized setting, it is undeniable to note that the current trend is now towards the cross-border flow in goods and services, as well as investments and technology (Garland, 1996, p. 448). Such globalized economic activities are impacting on the general economy in terms of the common term which is resulting from borderless world (Garland, 1996, p. 448). Supporters of globalization argue that due to globalization, the nation-state has now had a lesser role in economic activities with national capitalisms becoming extinct (Rich, 1990, p. 90). They argue that the economic activities are now less under government control and the state power is withering, often giving rise to different kinds of state. These states appear to have lost their sovereignty and have stepped back on their welfare programmes and industrial policies, entering into more collective government processes (Garland, 1990, p. 449). In general, it is important to understand that “globalization, as a process, is one that rejects and obliterates boundaries” (Basu, 2008, p. 26). In order to understand globalization, it is also important to understand that globalization refers to various overlapping interactions of national economies, up to a point where the impact of the national networks declines in relation to the effect of global networks (Kaldor, 2003, p. 18). The concept of globalization therefore implies the spread of international interactions to the extent that it creates new social relations. This seems to be what most authorities believe when they seek to assess the impact of global economic integration (Kaldor, 2003, p. 18). III. Globalists It is important to note that the globalization discussion does point out that for the globalists and for its critics, evaluating the international activities has become the main measure of globalization (Kaldor, 2003, p. 19). However, even where globalization networks may be advancing, this would not necessarily settle the issue because it would not eliminate the possibility that the expansion and sustenance of globalized networks are based on national interactions as much as transnational networks (Mann, 1997, p. 99). In effect, supporters of globalization must confront issues being pointed out in the globalization discussion. One of these issues is on whether or not the global networks are having an increased importance in relation to national and international networks (Hill, 2010, p. 110). This is an issue which relates to measurement; however it should not be confused with the impact of the global network. Even if the global interactions have grown significantly, there is still a need to evaluate the impact of the national and international networks on their operations (Hill, 2010, p. 110). IV. Issue of state control The primary issue in the globalized framework pertains to the consideration of the type of global economy based on transnational processes, where national networks are displaced or where these networks have a pivotal role (Weiss, 2000, p. 3). In general, the globalization idea which advocates lesser state control discusses whether or not the national and international connections are being displaced by transnational connections (Weiss, 2000, p. 3). This perception places a different perspective on traditional views which believes that a global network must overcome others. Among globalists, the rise of a globalized economy supports a world where economic interactions have risen above national spaces as the main element of accumulation (Weiss, 2000, p. 2). Various elements in the globalized world, like geography and status are no longer elements in economic interactions. The general acceptance of zero-sum discussions supports the notion which declares that the elements of globalization are different from those considered by the elements of internationalization (Kranser, 2001, p. 17). In applying the globalization, it is crucial to point out that the state is no longer significant as an economic actor or as a means of economic profiteering. However, there seems to be a compromising point in this discussion (John, 1998, p. 12). It is possible for globalization to exist guided by the values and virtues of coordinating capabilities of state-supported systems. In effect, globalization may be open-ended (Weiss, 2000, p. 4). V. Social applications Globalization is a complicated phenomenon as it has provided the template for economic modernization (Parsons, 1995, p. 16). In nationalizing social life, states have established a social caging process which has provided a structure for transnational interactions (Mann, 1993). The confinement of social interactions which the state has made possible would be seen in relation to the expression of the idea that most social interactions and outcomes of social struggles have become regulated through the state (Weiss, 2000, p. 6). The state has become a significant coordinating authority for social interactions. The impact of the modern state mainly relates to state elites using their power over society by controlling state-society interactions and confining social interactions over the national level, thereby impacting politically on the social life of states (Weiss, 2000, p. 8). VI. Diminishing impact of state The main political issue is on the possible diminishing impact of the state, and how such possibility may be supporting the globalized governments. Globalization theorists consider various economic possibilities displacing the powers of the state (Hudson and Lowe, 2004, p. 24). However, such considerations would be based on whether new transnationalism still exists within nation-states or if it has been discarded altogether. Two possible rival schools of thought – the new medievalists and liberal internationalists consider the end of the state and significant power-shifts (Weiss, 2000, p. 11). The end-goal however is very much different in each instance. As new medievalists support a shift in global governance, the liberal internationalists consider the growth of the world government. These internationalists support the establishment of international systems. On the other hand, global governance supports private power which is based on cooperative problem solving (Weiss, 2000, p. 14). Growth is based on the establishment of new technology, one which supports communications capability which ensures that interested actors would be supported and where national authority would be reduced. VII. Globalization issues and responses Globalization issues, including the degradation of the environment, the illegal trading of illegal drugs and weapons, and human rights’ violations are borderless crimes which often require international responses (Wang, 2004, p. 473). Transnational processes have a crucial role to play in these issues which were originally the concern of individual state governments. Intergovernmental systems have helped to ensure stronger commitments to common objectives among involved states and governments; this has been apparent in the conferences set-up by the United Nations (Ostry, 1998, p. 10). These conferences have helped support the establishment of strong national and international policies and systems. International bodies have helped support the establishment of women’s rights, the regulation of international activities, the promotion and protection of human rights, and the coordination of actions by various states towards the eradication of poverty and promotion of sustainable development (Ostry, 1998, p. 11). Under these conditions, the role of the nation-states has occupied less relevant places; moreover, their impact on the management of the above-mentioned issues has become less significant. Supported by modern technology, improved transportation, telecommunications, and economic liberalization, globalization has now earned the advantage of changing how organizations and individuals operate and interface (Cairney, 2012, p. 12). Specifically, various industrialized countries more or less share globalized values; however for the less progressive groups and for developing states, most of them do not feel the fruits of globalization and stronger global trade. The more developed states are managing their decisions in order to support their inclusive and democratic processes (Cairney, 2012, p. 12). On the other hand, among developing states, globalization may even tip the balance of power to the rich and powerful, away from those who seek greater national goals. Under these conditions, the rich become richer and the poor are driven deeper into deplorable economic conditions (Weiss, 2000, p. 21). VIII. Globalization and the private sector Globalization richly interacts with various state-based and institutional processes. For instance, state and governments are the primary political processes which implement the primary standards for citizens and private institutions (Weiss, 2000, p. 13). Private businesses help establish jobs and the government establishes the space and venue for individuals to express and manifest their needs as well as interests. Globalization is supported by the private-sector and it establishes shifts in the decision-making processes, away from the state and national governments and on to the private sector (Weiss, 2000, p. 12). Economic processes include the management of the financial sector, the decreased control of foreign exchange and greater liberalization of trade; these processes support globalization. Globalization provides businesses and corporations with various opportunities to take part in economic activities in the national and the international setting (Cairney, 2012, p. 12). The creation of economic activities ensures the establishment of foreign capital, mostly from multinational corporations to host country businesses and corporations. As national economies become more open, the possibility of establishing mergers with the businesses enterprises from other countries are becoming more common (Badakhshani, 2000, p. 20). Their involvement secures a strong presence of private institutions and also calls for them to comply with standards of performance based on specific quality and the timeliness of the activity. The competitive demands on business leaders and workers, especially in developing states demands best standards of organization and discipline if they would ensure successful operations (Badakshani, 2000, p. 2). In some states, there is an inadequate understanding of the business demands by the other main institutions of society, including government regulatory institutions, labour organizations, the media, as well as financial agencies. In various developing states, more often than not, there are no enabling frameworks. Instead, there is instability in government policies, or inconsistent implementation of policies, and a lack of support from private sectors and political parties (Badakshani, 2000, p. 3). Moreover, securing peace and order is often difficult and the available infrastructures do not encourage the establishment of new private sector businesses. In effect, the conditions in developing states may not be ideal for the development of globalized processes. IX. Analysis There is a significant amount of truth in the statement by Held and McGrew (2003). Major disturbances are omnipresent for various individuals and groups and since the state is no longer the primary authority in the protection and promotion of the interests of the poor, other social and political systems are starting to take responsibility in managing these disruptions. The effect of globalization on individuals has shifted based on the impact of economic integration which states have achieved and the impact of their exposure to globalization processes (Mann, 1986). In effect, OECD member states seem to be more integrated in the globalized economy because they do not encounter as many challenges in the internationalization of their domestic decision-making authority. They are sufficiently fitted to the global standards and practices (Badakshani, 2000, p. 3). Moreover, they are committed in preserving and ensuring socio-political stability and legal standards which would assist in the global operations and activities. Countries wanting to gain a foothold in the globalized world would likely encounter short-term issues, including the loss of jobs with businesses moving out. There would also likely be a decrease in income for some jobs as foreign products would now compete with local products and services (UN Secretariat, 2000, p. 2). Transitions in economy have been seen in Mexico, Brazil, Singapore, and Thailand with their economies slowly being integrated into the global standards. These countries are going through internationalization processes, securing capacities which further support globalization (UN Secretariat, 2000, p. 1). As such, most governments are facing the pressure of opening up their society and improve their global capacities (Badakshani, 2000, p. 2). Governments are also facing significant limits on their freedom of action. There are aspects of their economic and financial control which states have been prompted to give up. The power of the government has not however been completely relinquished, and “despite liberalization of trade and capital movement, some governments adopt protectionist policies to respond to powerful coalitions of workers and national businesses, notably in agriculture, steel, and textiles” (UN Secretariat, 2000, p. 6). These control measures help protect state interests and control the overwhelming impact of globalization to their local industries and processes. X. Conclusion The above discussion portrays how the state control in the current context of globalization has been reduced significantly. State control has been eased in order to support the growth of globalization in various industrial nations, and for the developing countries, such control has been given up at a greater detriment to their local interests. Nevertheless, the overall trend for globalization has been consistently focused on decreased state control as the role of the state and the government has become a stumbling block for the implementation of globalized processes. Held and McGrew in effect, pointed out important points on globalization and state control which will likely become even more undeniable in the years to come. References Badakshani, O. (2000) Globalization: The End of State Sovereignty? Free University of Amsterdam [online]. Available at: http://www.khorasanzameen.net/rws/gb01e.pdf [Accessed 03 November 2012]. Basu, R. 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