Relationship Between The Nation State And Global Market Economics Essay

Relationship Between The Nation State And spheric Market Economics EssayThis paper discusses the relationship amidst the rural atomic number 18a secern and the globular commercialize. Giddens Structuration theory is used to conceptualise nation secernates as agents and the globular market as the favorable system. It is argued that nation disk operating systems may shape the world-wide market according to their vested interests and needs and that might plays an important role in this process. A strong and effective state is therefore part up to(p) to use the opportunities offered by orbicular market.globalization and Developing CountriesThe term Globalisation has been widely used in books in a snatch of contexts. It has been seen as the global integration of financial markets (Walker and Fox, 19992), interconnectedness of world thrift (Neuland and Hough, 19991), trans-border movements of ceiling and goods (Gill, 20004) and breakdown of depicted object borders (Re dding, 199919). Braibant (2002) further includes the development of advanced marrow of communication, growing importance of multi guinea pig corporations, population migrations and increased mobility of persons, goods, capital, data, ideas, and even that of infections, diseases and pollution in the process of globalization. One aspect that is common among these perspectives is the breakdown of borders betwixt countries, goernments, economies and communities that has given rise to the global markets that atomic number 18 not controlled (but may be baffled) by a single country. The use of the term globalisation for the theatrical role of this paper is limited to that of trade, finance and investment.A variety of cost ar used to assortediate between developed and develop countries (for event pairing/south and rich/ short(p) etc.), however the literature has come a long way since the days of using the terms such(prenominal) as first world and third world countries. This pape r will flummox to the term developing countries, which is used to refer to a number of inhomogeneous groups of countries. For example it may mean the rapidly growing economies in Asia, veto growth economies (in terms of GDP/capita) in Africa, middle income and very poor countries, small and large, landlocked and ocean access and heavily regulated and tardily liberalised countries. This paper however, when referring to developing countries includes all low- and middle-income countries as defined by ground Bank (2000). There is a growing body of literature on the affects of globalisation and the opportunities and problems it may cause to the developing countries.The developing countries ar characterised by weak economic, legal and political institutions that lead to corruption, insecurity, scrap and lack of fighting in labour, technology and skills. The introduction of trade liberalisation and increased multinational competition in such conditions can have serious consequence s for the baby industries in the developing countries (Stiglitz, 2000). However it is generally claimed that opening to the global markets increases the flow rate of foreign direct investment into the developing countries, allows them to catch up with the a la mode(p) technology without need for huge investment or research, bring capital into the country, build expertise, induce innovation, and indeed contribute to the general economic growth. Francois and Schuknecht (2000) issue some empirical evidence that openness to global markets leads to GDP growth. These findings are of course challenged by others.The Hegemony of Global Market StructureIn the sizable amount of literature, a form of structuralism can be observed that views the relation between the global market and the nation state as a zero-sum patch where the growth of globalisation is seen as increased shrinking of sovereign state. bear two decades of 20th century saw proliferation of the literature that predicted th e eclipse, retreat, crisis and even the finale of the nation states as a result of growing motors of globalisation. The principal(prenominal) premise of these viewpoints is that the nation states have lost control over their territorial boundaries, national economies, currencies and even their cultures and languages as well and thus the macroscopic form of power has shifted from the nation-states to the global market represented by global institutions and multinational corporations (Barrow, 2005). For example Castells (1997243) in his chapter named A powerless state? argues that State control over space and time is increasingly bypassed by global flows of capital, goods, services, technology, communication, and information. Similarly Hardt and Negri (2000xi) in their book Empire claim that along with the global market and global circuits of production has emerged a global order, a new logic and structure of rule-in short, a new form of sovereignty. Empire is the political subje ct that in effect regulates these global exchanges, the sovereign power that governs the world. Similar view is held by Camilleri and Falk (199298) global processes and institutions are invading the national state and are dismantling the conceptual and territorial boundaries that have traditionally sustained the theory and practice of state sovereignty. The authors think that the nation state little choice other than delegating their function to international and supranational organisations. Hence, it may be a bit exaggerating that the globalisation is the only reason that has resulted into the degradation of state authority but it appears from the literature that it is seen by many as the central one (Evans, 1997).Various examples are given to support this point of view. The powers of World avocation Organisation (WTO) to inflict sanctions and punish individual countries are cited as one of the ways in which the global capitalist system coercively seeks conformity. It is argu ed that individual countries have little square off on the creation and performment of rules in the system and even on the direct of their own integration into the world deliverance. A well cited example of this is the effort of Indonesian government to protect its domestic go industry by providing facilities such as tax holidays, lower import duties for spare part and very low interest loans. These actions and their positive effect on Indonesian automobile industry did not go well with the global automobile exporters who saw their market share potentially in danger. A gaffe was therefore raised against the Indonesian government at the WTO where it was defeated and thus coerce to either roll back the measures it had move backn to protect and heighten one of its nascent industries or risk severe sanctions (Hartungi, 2006). Another uncomely effect of growing power of global capitalist system is that the developing countries have to increasingly compete within each other to cast the FDI which is termed by some as a race to bottom (Chau and Kanbur, 2006). In order to prove them more attr alive(p) to the MNCs, developing countries are laboured to deregulate hastily and keep the bribe and taxes low. Any attempt by these countries to increase the minimum primary wage, labour safety standards or restrictions on capital may result in relocation of MNCs from the country. This exposes the elaborate force to further exploitation in countries where union representation, legal protections and access to basic facilities such as health and education and any kind of social safety net is already limited. Labour exploitations therefore have been report in Bangladesh, Indonesia, Sri Lanka, Kenya and the Dominican Republic where government is forced to keep the wages low due to for example competition from countries like India and China where the preen giants Levi-Strauss and Gap have been considering to relocate due to availability of raw materials as well as pa ckaged services such as cutting, sew together and packaging etc (Hartungi, 2006).Similarly developing countries are coerced into various understandings (such as Trade Related Agreements on Intellectual Property Rights, TRIPS) under the auspices of WTO that are unreasonably costly for these countries to implement. It cost Mexico for example US$30 zillion to upgrade and enforce intellectual property laws (Finger and Schuler, 1999). Some developing countries such as Nigeria, Uganda, Morocco and Cambodia are forced by the US government to enforce patent protection mechanisms for pharmaceuticals that go way beyond the standard TRIPS engagement and are known as TRIPS Plus. One of the many additional obligations forced on developing countries under TRIPS Plus is the extension of patent terms beyond the 20 years required by standard TRIPS agreement and used commonly by most countries in the world.The Almighty StateThis train of literature focuses on the role of individual nation-states in enacting and reifying the global market structure. It views these as the principal agents of globalisation and the patrons of the political and material conditions required for its sustainability and influence. Its main premise is that the nation states are going through a intonation in order to adjust to the new global political economy and balance the contradictory pressures of global requirements and national interests, hence there is considerable realignment taking place within the state apparatuses which many scholars incorrectly render as a decline of nation state. It is argued that without the intervention of the state, the existence and the return of global capitalist market is not possible. The process of creation and modify of this system therefore requires active role of the nation states (Aglietta, 2000). However, the policies, attitude and institutions that are required to shape the capitalist structure of global scale take time to develop and thus the developin g countries must manage the conflict between domestic and global interests until such institutions take root in the society (ibid.). This point of view is partly based on the work by Robert Cox (1987) published as a book name Production, Power and World Order in which he challenged the notion that state is in decline and instead proposed the concept of internationalization of the state. He argues that internationalisation of state is the conversion of state into an agency for adjusting national economic practices and policies to the sensed exigencies of the global economy. The state becomes a transmission belt from the global to the national economy, where heretofore it had acted as the bulwark defending domestic welfare from orthogonal disturbances. (Cox, 1987254) Similar views have been expressed by Panitch (1993) who believes that far from witnessing a by-passing of the state by a global capitalism, what we see are very active states and highly politicised sets of capitalist c lasses (p63). He adds that the global capitalist structure as it stands today has been authored by the states and it has primarily rearranged rather than by passed states. The level of influence that individual states have on global markets may be different but ultimately the imperial economic and political relationships are not organised by the multinational and transnational firms, but by a system of states that have unequal influence across the globe. Aglietta (2000) therefore defines imperialism as a system of hegemony through which states are coerced by other state/s to adopt a set of rules that favour the stability of global system that may be inclined heavily towards promoting the benefits of stronger states. Thus the flowing form of globalisation has been constituted by a number of states with spotted inter-state relations and strengths.The role of states strength/power in benefiting from the global capitalist system is substantiated empirically by the work of Weiss (2005) by examining the evidence from japan and East Asian NICs (Newly Industrialised Countries). The author concluded that the states with strong fall in over the socio-economic goal setting and strong relationship with domestic reference were better able to adapt to the process of globalisation and crucially, were also better able to promote the internationalisation strategies of their corporations. Thus the differences between the states capacity (strength) right off affect its ability to exploit the opportunities of international economic change.