Explain the impact of globalisation on states’ sovereignty
Through recent years globalisation (an intensification and acceleration of exchanges of goods, services, labour and capital, primarily due to technological advances) has had a varied impact on the sovereignty of states. It mostly appears to have damaged states’ sovereignty and had a largely negative effect, this is seen through an increased influence of international non-government organisations, transnational corporations and international government organisations. However, these influences haven’t only negatively affected sovereignty, they have had some positive influence.
International government organisations, such as the International Monetary Fund (IMF) and the World Trade Organisation (WTO) have managed to significantly reduce the sovereignty of states’, particularly economic sovereignty, through methods of coercive power. The WTO reduces state sovereignty by placing a number of rules and restrictions on the way in which the member states can trade, this has been done in many ways, one being a reduction in subsidies. The restrictions placed by the WTO mean that states area unable to freely make law within their borders, as any law (in relation to trade) must align with the rules of the WTO. It is often in a state’s best interest to be a member of the WTO so they are able to build successful trade relationships and a stable economy, but by doing so states often sacrifice some of their sovereignty. Similarly, the IMF damages the sovereignty of states through implementing austerity measures (also called structural adjustment programs) which must be employed by the state before the IMF is willing to lend money to them. This results in the governments often having to make laws which are unpopular and against their desire. This compromises their sovereignty, a sacrifice many governments are willing to take in attempts to preserve their economy. However, the IMF has at times lent money without requiring the implementation of austerity measures. This was seen during the Global Financial Crisis (GFC), where the IMF lent money to Iceland. This consequently enabled Iceland to emerge from the GFC in a reasonably good position – ensuring the government was able to maintain the support of their people, as a result this benefited sovereignty and governing power.
