Globalisation: heralding the end of the developmental state?

Is globalisation undermining the policy autonomy of developing countries? Are democratic deficits being created when the demands of internationally organised neo-liberal elites conflict with popular preferences and concerns? What are the implications of this for the poor?

A paper by the Institute of Development Studies reviews the debates on the impact of globalisation on the role of the state in development. Arguing that globalisation has to be understood historically and as a political process, it warns against simplistic assumptions about northern ‘winners’ and southern ‘losers’. Options may be constrained, and there may be more policy choices for some governments than for others, but states are likely to retain some autonomy and capacity to determine the organisation of national economies.

Some parts of the state have internationalised more than others and are more subject to the disciplines of global markets. States should not be seen as unified but as a set of competing bureaucratic jurisdictions. For example, trade and commerce ministries often seek to enhance market access while agriculture and environment ministries promote regulation of the worst effects of liberalisation. There is a growing disconnection between policy-makers enthusiastic about the benefits of globalisation and those most directly affected by the changes it produces, who are often poorly mobilised to defend their interests. It may thus not be realistic to expect elites to institute pro-poor interventions to rein in a process that they themselves, as a class, benefit from.

Other key points made by the paper include:

• many people are not yet directly affected by prevailing patterns of globalisation
• mainstream literature on globalisation, focused on the developed world, tends to present the process as apolitical, natural and inevitable which no actor can control
• claims of political impotence in the face of globalisation can provide governments with excuses for inaction or alibis to impose social costs and unpopular policies difficult to justify by other means
• neo-liberals cannot explain the economic success achieved by East Asian countries which adopted strong state-based models of development that contradict the small state prescriptions of neo-liberalism
• key development decisions regarding trade and investment are increasingly being made within international institutions – in which developing countries are weakly or poorly represented – or by the actions of unaccountable financial market actors.

Reaffirming state agency is important for understanding globalisation historically and for engaging in debate about the future possibilities of state action for development. Analysts need to:

• see globalisation as a contested process between competing social and economic forces regarding who sets the rules and for whom
• appreciate the plurality of capitalisms and structures of state-market relations
• see tensions within states not as international versus national but as struggles between different national constituencies pushing for and against different degrees of global integration
• consider the gender, racial and class dimensions which mediate the relationship between globalisation and poverty
• appreciate the mismatch between the rights that business actors have acquired through regional and global trade arrangements and the lack of corresponding responsibilities that they are expected to exercise
• think critically about new forms of national and global democratic control over the forces of globalisation that increasingly structure development choices.

Source(s):
‘Globalisation and the future state’, Working Paper 141, Institute of Development Studies, by Peter Newell, 2002 Full document.

Funded by: Department for International Development, UK

id21 Research Highlight: 15 May 2003

Further Information:
Peter Newell
Institute of Development Studies
Brighton
Sussex BN1 9RE
UK

Tel: +44 (0)1273 678798
Fax: +44 (0)1273 621202
Contact the contributor: P.Newell@ids.ac.uk

Institute of Development Studies (IDS), UK

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'Pushed aside by globalisation: what hope for war-traumatised Luanda?'

'Globalisation: a threat or a promise for the rural poor?'

'Globalisation: a threat to social policy?'

'Signing up to globalisation: assessing trends in developing country trade'

'New world order? In search of stability for the global economy'

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