Globalization and Governments

Globalization and Governments

One of the interesting questions related to the effects of globalization is the impact that globalization has had on state entities. Looking at globalization and governments is an interesting aspect of the overall questions about the overall impact that globalization has had on the world. When we discuss globalization, we often try to define the term, look at the pros and cons of globalization, and try to understand this phenomena on the future. But it is important to examine specific implications of globalization, and particularly the impact of economic globalization, as well as the political impact of globalization on the behavior of states.

Again, there are many ways to understand globalization when discussing the concept in international relations. Globalization can be understood in terms of economics, development, human rights norms, media, culture, etc… In this article on globalization and governments, I want to reflect upon the ways in which the state leaders, and the state as a whole, have been shaped by globalization economically and politically. 

Globalization and Economic Sovereignty

Osland (2003) argues that one of “[t]he key question[s] regarding globalization and governments is whether or not globalization threatens national sovereignty” (142). When one looks at historical trends, they see that the governments of states were instrumental in driving globalization. Government policies for or against tariffs, their calls to carry out naval expeditions, or their willingness to promote economic enterprises that lead to a rise of technological advancements in their country are all ways in which a government can drive globalization.

However, the question as of late has been how globalization impacts governments, both in terms of their overall behavior, and more specifically, whether globalization limits state sovereignty. For example, with the rise of globalization, some argue that governments are far less able to control their own politics without concern for the outside world. In today’s age, it becomes difficult to be economically isolated; few countries are doing this with successful political and economic outcomes. In fact, some explain that there exists some who believe that today, “government matters less and less in a global economy. Nation-states are simply other actors on the global stage rather than its directors” (Osland, 2003: 142), and that “[a]ggressive global production systems and capital markets now occupy the “commanding heights” of global development, forcing governments on the defensive and pressuring them to deregulate, downsize, and privatize many of the social management functions they assumed during the past century (Yergin & Stanislaw, 2000) (in Osland, 2003: 142).

Osland (2003) has outlined the pros and cons of globalization related to governments, saying that the positives include:

Increased economic development benefits some governments

Increased jobs and expanded infrastructure benefit some countries Transfer of modern management techniques into business sector

Greater interdependence among trading and investment partners may deter war

Proliferation of nongovernmental organizations (NGOs) to counter- balance decreased governmental power

whereas the negatives impact of globalization on governments include:

Power of multinational enterprises (MNEs) increased at the expense of government power, sovereignty, and ability to regulate business

MNEs externalize some of their costs to countries
Competition for factories and foreign direct investment (FDI) result

in too many concessions to MNEs by some governments Some MNEs influence local government policy and threaten to

leave if their demands are not met
MNEs pay fewer taxes to governments and incorporate where the

tax rate is lowest, depriving their own country of revenue Governments are pressured to reduce tax rates and decrease social

benefits that may affect stability (146).

Globalization and Political Sovereignty

Along with the economic effects of globalizations on governments, with the rise of political globalization also comes increased international human rights norms which have placed serious challenges on traditional understandings of state sovereignty. Since the Treaty of Westphalia in 1648, the state model has been the dominant one in international relations. Furthermore, in the past century (with the rise of the League of Nations, and more so later with the creation of the United Nations), the state has continued to have its sovereignty challenged by human rights activists who demand the state live up to its role as the protector of its population.

With regards to globalizations and governments, globalization has allowed these platforms, such as the United Nations to develop. Here, international actors can come together and work on international legal treaties for the reduction of state sovereignty through agreements that demand their respect of human rights law. Of course, states frequently violate treaties and conventions that they have signed and ratified. However, now, with some enforcement mechanisms such as the International Criminal Court, for example, the ability of state leaders to shield themselves from international eyes, both in terms of media, as well as expectations of international law, is reduced greatly.

In, fact, these international treaties might also effect their ability to pass economic policies. As Stiglitz (2007) writes: “Increasingly, a government’s inability to control the actions of individuals or companies is also limited by international agreements that impinge on the right of sovereign states to make decisions. A government that wants to ensure that banks lend a certain fraction of their portfolio to underserved areas, or to ensure that accounting frameworks accurately reflect a company’s true status, may find it unable to pass the appropriate laws. Signing on to international trade agreements can prevent governments from regulating the influx and outflow of hot, speculative money, even though capital market liberalization can lead to economic crises” (20-21).


Thus, related to the overall topic of globalization and governments, it is evident that state leaders have had a complex relationship with globalization, whether it is economically (and the benefits, as well as the drawbacks of globalization on their economies), or politically, as it relates to a weakening national sovereignty. It will be important to continue to examine how this relationship continues to develop as globalization brings about new technologies, business opportunities, as well as additional tools for activists looking to further ensure that governments held accountable for their domestic and international actions. For them, globalization and human rights not only goes together, but globalization has allowed activism to be more effective in challenging rights abuses, and often abuses committed by the state. 



Osland, J.S. (2003). Broadening the Debate: The Pros and Cons of Globalization. Journal of Management Inquiry, VOl. 12, pages 137-154.

Stiglitz, J. (2007). Making Globalization Work. New York, New York. Norton.

Yergin, D., & Stanislaw, J. (2000). The commanding heights: The battle between government and the marketplace that is remaking the modern world. In F. J. Lechner & J. Boli (Eds.), The globalization reader (pp. 212-220). Oxford: Blackwell.


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