Is globalization causing the decline of the nation-state?

Essay 2009 10 Pages

Politics - Political Theory and the History of Ideas Journal


Globalization alone is not causing the decline of the nation-state - not a single ‘trend’ is able to reduce the power of the most important actor in the international system. Rather, different developments need to be taken into account when examining the situation of the nation-state. After having analyzed in the first part the way, major globalization-developments, like global capitalism, influence the nation-state, I will describe in the second and third part two other movements: internationalization and regionalization. Both are ‘labelled’ with a national/transnational ambiguity, on the one hand strengthening and on the other hand weakening the nation-state. Within the conclusion, I will then argue, that the nation-state is indeed ‘under attack’ - but not only by globalization - and that it has to cope with a changing nature and differing tasks.

According to the definition of Rai (2002: 49), the nation-state can be characterised by the following four attributes: Firstly, territory; secondly, population; thirdly, a government being able to have jurisdiction over territory and population and finally recognition from other states. A nation-state is therefore a territorial entity in control of several functions over a population being seen as authority from other states.1 It is an open question in the field of political sciences as well as other social science disciplines, whether the nation state is loosing power. Globalization is said to be one major cause of this attack on the state (Van Creveld, 1999) and can be defined as:

A historical process involving a fundamental shift or transformation in the spatial scale of human social organization that links distant communities and expands the reach of power relations across regions continents. (Baylis et al.2008: 19)2

Globalization is causing networks, which are not national or international, but transnational and global (Mann, 1997). The inherent processes can be either economic, cultural or social - it is not their content which counts but more their extent. I will look at the degree to which these networks are expanding in the cause of globalization and the way they are possibly changing the nation-state.3

Van Creveld announced the demise of the nation-state (1999) stating that global and transnational forces are becoming more and more important driving the nation-state into non-existence.4 This radical argument was formulated by Michael Mann in a ‘softer form’(1997). He sees four globalization-forces causing a decline of the nation- state: global capitalism, global problems, global civil society and the emergence of a global state. I will focus on the first three points in the next three paragraphs in order to analyse the implications of globalization for the nation-state starting with the global capitalism.

Liberal capitalism as a form of economic systems is indisputably dominant on a global scale (Fukuyama, 1992). Its final breakthrough was possible due to modern information technology and eventually after the Cold War with its expansion towards the East.5 Strong evidence for the enormous degree of transnationalization can be found in the financial markets. As the current crisis shows, problems in the financial industry of America are having severe implications for the global banking industry.6 The ‘fall’ of Lehman Brothers caused breakdowns in all major financial indices. Not only them, but also the businesses of other banks were affected. It is the dispersing ideology of capitalism also causing the spread of international corporations. Multinationality is the most siginificant feature of bank-organization nowadays (Datamonitor, 2009). Furthermore, multinational firms dominate not only financial corporations, but many other industries. Laws and regulation of the economic sphere tend to become transnational as well: IMF, WTO and the World Bank, for example, are trying to control their spheres of influence on a global level (Went, 2004: 345)- although very soft in most instances. This development will even speed up, if a ‘global financial regulation’ is created, as George Soros would like it to be (Haass/Litan, 2004). Altogether, power in this way is shifting away from the nation state to global corporations and institutions: the economy is no longer only in the hands of the nation-state, but the ‘rules of the game’ are partly made by non-state actors. Nonetheless, about 70% of production is still for the domestic market - in the EU the quota lies at 73% (Eurostat, 2009). The same is true for investments (Krugman, 1994) and migration not reaching “important levels diminish the never existing influence of the nation-state. I will examine this no further, however.

relative to world population” (Guillen, 2001: 238). It is also states which structure much of the legal basis of multinational corporations. Regulation, corporate law and accountancy - most of it is still national. Here, the power of the nation-state over its economy is to a large extent alive and globalization does not reach as far as supposed. Today´s economics can in sum be described as a „national/transnational duality“ (Mann, 1997: 479). The trend is towards transnationality, though, strengthened by the enduring dominance of global problems, Mann´s second point, as discussed in the next paragraph.


1States are not inhabited by particular nations, though. Using this narrow definition,

only a few “real” nation-states would remain (e.g. Japan and Egypt). This essay will use the broader concept common in the field.

2See for other definitions: Guillen (2001: 236), Weber (1994).

3Janice Thomson and Stephen Krasner have shown, that the “golden age of state

control” (1989: 198) was never real. Globalization can - to say it with their words - not

4See Waters (1995), McMichael (1996) and Albrow (1997).

5Only some more or less communist states as Iran, China and Cuba remain - though open to capitalist thinking.

6 Another example: Brazilian economic crisis in 2002 (see Went, 2004).


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ISBN (Book)
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Institution / College
Royal Holloway, University of London
Political Philosophy Politische Theorie Politikwissenschaften Globalisierung Globalization Nationalstaat Nation State Politische Ökonomie




Title: Is globalization causing the decline of the nation-state?