A comprehensive examination of global democratic theory must begin with how globalization has impacted on the nation-state and the consequences for traditional conceptions of democracy. This is no easy task because the role of the state in the contemporary world is a contested issue within public debates and academic scholarship. The issue is further complicated by differences in how globalization is understood. For some scholars, globalization refers to a range of social processes that for many centuries have increased transnational and transcontinental interdependence, while for others globalization is conceived more narrowly as a process of economic integration involving the recent influence of neo-liberalism on the global economy. In either case, it is clear that the ideas and practices of neo-liberalism have ratcheted up the spatial process of global integration to unprecedented levels in recent decades (Steger 2009: 38–57). Today, people all over the world are involved in or affected by an array of global and transnational processes ranging from economic transactions on global financial markets to cultural exchanges on the Internet. However, it is also the case that the scope and impact of these practices are distinctly uneven: many people are excluded from sharing in the benefits of globalization, while others face serious burdens and disadvantages arising from their enmeshment in global networks of power. As a result, public reactions against contemporary globalization have been driven by the perception that there is little or no democratic control over new sites of power and authority that transcend the nation-state.
At the heart of these concerns are questions about what globalization means for the role and significance of the nation-state. Until the emergence of contemporary globalization, the state was assumed to be the primary reference point for understanding the nature of political community. Democratic theory largely assumed that the nation-state was central to democracy by defining “the people,” their political rights, and framing what social purposes the people should pursue. The emergence of contemporary globalization has fundamentally challenged these assumptions. The changing role of the state presents considerable challenges to prevailing notions of political community and representative government that underpin democracy within the state. In order to explore these challenges, this chapter first explains the key features of a nation-state and then examines the different perspectives regarding the impact of globalization on state power and capabilities. It then considers the rise of neo-liberalism and some of the public reactions and debates about globalization in this context. Finally, the chapter examines how democratic theory has reacted to these developments in its understanding of the role of the state in contemporary democratic life.
In order to understand the changing role of the nation-state in contemporary global politics it is first necessary to define what a “state” is. The modern state is a historically specific type of polity that has spread across the world to become the predominate form of political organization. Due to the different historical trajectories in which they developed, states vary widely in their capabilities and in the type of political regime that controls them. States in the industrialized West and postcolonial Africa differ markedly in their ability to control their domestic economies, for example, and states might be further differentiated by liberal democratic, authoritarian, or theocratic systems of government. However, central to the development of all modern states is the notion of sovereignty manifest in control over a delimited territory and population. The modern state is a form of territorial rule that centralizes most of its key functions in a system of government that is backed by a monopoly over the legitimate use of force and the possession of the legitimate right of taxation. As Anthony Giddens (1985: 282) explains:
a sovereign state is a political organization that has the capacity, within a delimited territory or territories, to make laws and effectively sanction their up-keep: exert a monopoly over the disposal of the means of violence; control basic policies relating to the internal political or administrative from of government; and dispose of the fruits of a national economy that are the basis of its revenue.
This capacity to rule involves an ability to create domestic law and enter into international legal arrangements, as well as playing a key role in shaping its population’s identity and allegiance (Linklater 1998a: 118). By linking a vision of community to the administrative apparatus of the state, the “power over life and death” is legitimized by “appealing to and mobilizing deeper and more demanding feelings” of communal loyalty (Poggi 1978: 101).
The capacity for sovereign rule is also grounded in a state’s right to supremacy in its domestic affairs and, by extension, a right to non-intervention by other states in its territory. Such rights are therefore conferred only by the recognition of sovereignty by other states and acknowledgment of the legal equality between them in an international society framed by shared rights, rules and responsibilities. This mutual recognition of sovereignty rose to prominence in the early modern period, as evident in the signing of the Peace of Westphalia that ended the Thirty Years War in Europe in 1648. In this period, European sovereigns began to recognize each other as equals and agreed not to interfere in each other’s domestic affairs, particularly with respect to religious conflicts. In subsequent centuries, norms and practices of this so-called “Westphalian order” spread from Europe to the rest of the world and led to the development of international law, diplomatic communication, and other forms of cooperation between sovereign states. However, this expansion of the state system did not occur peacefully or without struggle. European countries violently imposed state structures on their colonial territories and did not recognize the sovereignty or existing political systems of the people they colonized. It was only when colonized people gained independence and sought to build their own states though a mixture of resistance and emulation that they gained sovereignty rights in the international system. Not all have been successful: many postcolonial states, particularly in sub-Saharan Africa, can be characterized as “weak” or “failed states” because they are unable to maintain domestic order and are prone to civil wars and humanitarian disasters that prompt external intervention, sometimes without the consent of the host government. Nevertheless, the processes of decolonization in the twentieth century marked the final decisive phase in which the state system became truly global.
While the sovereign state is an organization based on legal independence and collective administration, it also normally represents a political community that shares some basic ideas about its collective identity and how society ought to be governed. Since the early nineteenth century, nationalism has become the central ideology shaping the identity of political communities, and the associated quest for national self-determination has driven the proliferation of sovereign states. This is why contemporary states are referred to as “nation-states.” Despite the prevalence of nationalism, however, its precise nature as an ideology and cultural practice is widely contested. Some scholars argue that the nation and nationalism rest on primordial conceptions of ancestry and territory, while others contend that nationalism is a modern phenomenon that has been constructed by political leaders in response to the breakdown of traditional societies (Gellner 1983). As a modern ideology, European nationalism developed in conjunction with and in response to the rise of popular sovereignty, the mobilization of mass armies, capitalism, and industrialism, and alongside the development of new forms of communication such as the printing press that generated a national consciousness in dispersed populations (Anderson 1991: 36). Ernest Gellner (1983: 1) argues that nationalism aims to unite the political sphere, understood as the state, with the cultural sphere, understood as the nation: “nationalism is primarily a political principle which holds that the political and the national unit should be congruent.” This aspiration for political unity can lead to devastating consequences for territories where multiple nationalisms are present and the leaders of one nation use the state apparatus to oppress or eradicate the others, as was the case in the 1994 Rwandan genocide. Nationalism thus entails a special loyalty to members of one’s nation that can ultimately supersede obligations to all other communities. As a moral ideal, this includes an ethic of public service and self-sacrifice that enables redistribution to fellow nationals through state welfare policies, and justifies the use of state violence in the defence of the nation against internal and external enemies.
However, in recent decades states have become embedded in global forms of governance addressing a range of global issues. Indeed, for much of the twentieth century states expanded their social and economic roles and developed international institutions dealing with a wide array of shared problems ranging from public health to ozone depletion. In this way, states play a crucial role in linking power to social and moral purposes both domestically and internationally (Eckersley 2004: 6; A. Slaughter 2004). States are thus Janus-faced in the sense that they look inwards to maintain order, administer public policy, and provide institutions for collective action, while also looking outwards to pursue the “national interest” by providing protection from external threats and cooperating with other state and non-state actors in order to address common problems. As such, states have played a key role beyond safeguarding their security by developing and implementing shared purposes like free trade, human rights and environmental protection that are intimately linked with processes of globalization. The relationship between the state and globalization is thus one of the key debates in contemporary political theory.
The impact of globalization on state power has been a prominent issue in the globalization literature over recent decades with profound implications for how one thinks about politics. It is now uncontroversial to claim that globalization is a set of social processes where territorial borders are crossed on a regular basis by significant flows of people, resources, and ideas. However, the political implications of these flows and exactly what they mean for the nation-state and the future of governance is still debated. The seminal book Global Transformations (Held et al. 1999: 3–8) outlines three perspectives on globalization: the hyperglobalist; skeptical; and transformationalist positions. These broad positions do not fully capture the different views concerning the origin, scope, and causes of globalization, which can vary dramatically within each position, but they are useful reference points in understanding the consequences of globalization for the role and capabilities of the nation-state.
First, the hyperglobalist argument is that contemporary globalization is a new and revolutionary feature of global politics. Economic liberals who see globalization in terms of the extension of free trade and unfettered movements of money and investment tend to articulate this position. They contend that globalization is reshaping economic processes in ways that promote economic growth and material progress. In this context, hyperglobalists argue that the state is no longer able to shape economic priorities in its traditional functions of developing national economic policy or protecting national industries. That is, the nation-state has very limited capabilities because it is constrained by global market forces. Kenichi Ohmae (1995: 120), for example, claims that states are inadequate for a globalized economy, as they have become mechanisms of “wealth destruction” aimed at redistributing resources rather than engaging with mobile capital. Furthermore, hyperglobalists argue that many of the roles and functions of the nation-state are being transferred to global bodies such as the IMF and the World Bank. Nation-states are no longer sufficient in size or capability to be able to coordinate economic policy or to compete with private wealth, and instead such matters are increasingly falling within the domain of supranational or global authorities with the capacity to coordinate global policies. As Ohmae (1995: 11) puts it, nation-states are increasingly “nostalgic fictions” that have “already lost their role as meaningful units of participation in the global economy of today’s borderless world.”
In contrast, the skeptical argument questions whether globalization is particularly novel or is leading to the revolutionary changes that hyperglobalists identify. For the diverse range of scholars called “skeptics,” the extent of globalization is dramatically overstated. Specifically, the claim that economic globalization is new and profoundly reshaping the world is a myth because in some respects the current international economy has only recently become as open and integrated as the regime in the belle époque between 1870 and 1914 (Hirst et al. 2009: 3). Furthermore, realists in the discipline of IR are skeptical of the existence of globalization because they argue that the world economy is still shaped by state-to-state interaction where strong states still exert their power to shape the international economy (Waltz 1999: 7). The key dynamic for realists is that states have different levels of power and capacity to influence or resist the drive of market forces and other forms of external influence. Marxists are also skeptical on the grounds that global interconnections have long been an essential part of the capitalist mode of production and hence nothing novel to the contemporary period (Harvey 1997: 421).
Not surprisingly, then, the skeptical approach argues against the notion that the state is powerless or obsolete. Linda Weiss (1998: 190), for example, in The Myth of the Powerless State, claims that hyperglobalists have tended “to overstate the past power of the state in order to claim state weakness in the present.” She also argues that hyperglobalists have downplayed the diversity of state responses to competitive pressures. Weiss (1998: 190) points out that states around the world still make different strategic choices in their policies despite economic globalization. In general, skeptics of globalization contend that comparisons between countries around the world still demonstrate different economic and social policies in line with domestic values and preferences. As such, hyperglobalist accounts that exaggerate globalization are problematic (even dangerous) because they imply globalization is inevitable and ungovernable, and therefore any national reform strategies are paralysed in the face of global forces. If, however, the economic changes underway in the world today are more complex and equivocal than the hyperglobalists suggest, then the possibility remains that political action can be undertaken for the national and international control of markets in order to promote social goals (Hirst et al. 2009: 2). In this view, the state retains its crucial sovereign capacity to effectively legislate and implement public policy.
Third, the transformationalist perspective treats contemporary globalization as a multi-dimensional process that is reconfiguring the nature of political, social, and economic practice. As such, it seeks to tread a middle course between the hyperglobalists and skeptics and consequently has become the predominant position in this debate. The transformationalist position conceives globalization as a spatial process whereby various forms of human activity are increasingly traversing the globe and connecting people more densely and more quickly than ever before. Importantly, this position contends that globalization is not novel to the late twentieth century because global processes have been connecting individuals and polities for at least 500 years with some dynamics of globalization evident even earlier (like the spread of religions). However, the density and speed of these interconnections have accelerated in the late twentieth century due to advancements in technology that enable the formation of long distance social relationships. These relationships go beyond the economic realm as various global forms of social, cultural, and political activity increasingly connect people around the world. Globalization is fundamentally a spatial process evident in “the widening, deepening and speeding up of worldwide interconnectedness in all aspects of contemporary social life, from the cultural to the criminal, the financial to the spiritual” (Held et al. 1999: 2).
The transformationalist position on the impact of globalization on the capacities of the state emphasizes elements of both continuity and change. Where the hyperglobalists see globalization as bringing about the demise of the nation-state, and skeptics see the state as remaining supreme, transformationalists see globalization as reconfiguring or transforming the relationship between states, societies and markets (Held et al. 1999; Sørenson 2004). In this view, states continue to be important actors in global politics, but there have been significant changes in how states promote security and the welfare of their citizens in various policy fields. Indeed, there has been an internationalization of the state to such a degree that the very line between domestic policy and foreign policy is increasingly blurred in many areas (A. Slaughter 2004). For example, safeguarding public health now requires sophisticated international cooperation because increased flows of migrants, tourists, and businesspeople make it relatively easy to carry infectious diseases such as bird flu across national borders. Furthermore, transformationalists argue that TNCs, transnational social movements and international regulatory agencies have increased in power and significance in recent decades. As such, nation-states are no longer (if they ever were) the sole centres of power and authority or the principal forms of governance in the world today (Held and McGrew 2007: ch. 5). This is a significant shift in global politics: the state system is now one important part of a broader global system in which states must compete, cooperate, interact and generally coexist with a vast array of significant subnational, transnational and international actors that to a lesser or greater extent constrain state action (Rosenau 1992: 256).
The transformationalist position also highlights the shifts underway in notions of identity and allegiance embedded in the nation. Most transformationalists argue that modern political communities are historical and social constructions. Their particular form, coinciding with the territorial reach of the “imagined community,” is a product of particular social and political conditions that led to the rise of nationalism in Europe and its spread throughout the globe (Anderson 1991). Today, however, singular forms of national identity are being undermined by changes in technology and communications, mass migration, and an awareness of a common human “fate.” Andrew Linklater (1998b), for example, observes that political communities have always been in the process of reconstruction, and with intensifying globalization and regionalization, modern polities are experiencing significant transformations as new forms of post-national community emerge based around shared problems or social movements that transcend national politics. As such, national communities coexist today alongside “overlapping communities of fate” defined by the spatial reach of transnational networks, allegiances, and problems. Global problems like climate change, for example, demonstrate that the environmental future of one particular nation-state is connected to all others and these states interact with new transnational communities that bring together parliamentarians, bureaucrats, scientists, celebrities and citizens in a shared project to mitigate and adapt to global warming.
Against the background of this debate, it is important to recognize that while contemporary forms of globalization are challenging the nation-state, it is not an idle bystander. Indeed, many scholars influenced by critical theory suggest that contemporary globalization is not natural or inevitable and is actively shaped by the policies of states. These scholars are keen to avoid the simplistic claims that the state remains unchanged in the face of globalization or that globalization represents a simple reduction of state power in the face of transnational flows (see Cerny 1995; Gill 1998, 2012; Held and McGrew 2007; Sassen 2003, 2006; Strange 1996). Rather, globalization is a set of processes driven by particular political ideas and interests. Consequently, this scholarship broadly accepts claims about increasing global integration, but points out that many scholars ignore the political forces that are championing the current form of economic globalization. In particular, “critical” scholars tend to emphasize the importance of neo-liberal ideologies and policies in shaping the global economy since the 1970s (Cox 1996; Gill 1998; Harvey 2005). Neo-liberal policies promoting free markets seek to open up national economies to global capital as well wind back the discretion of the state in economic life.
In this vein, Philip Cerny (2000, 2009) argues that contemporary states are becoming “competition states” which pursue policies quite different from post-war Keynesian projects of nation-building and the welfare state that sought to balance expanded international trade with redistribution within national societies. The development of the competition state represents a significant change in the relationship between states and markets. Instead of directly regulating or “taming” markets to serve social purposes, states support a free market order aimed at securing economic growth within national economies by establishing competitive advantages in the global economy. This means the international competitiveness of domestic industries is a key reference point for economic policy and the capacity of the state to attract capital becomes a primary focus of government. The focus on international competitiveness and the embrace of deregulation, liberalization, and privatization represents a significantly constrained role for the state in economic affairs that enables and entrenches a neo-liberal form of economic globalization. As such, Robert Cox (1996: 302) claims that the state has become “a transmission belt from the global to the national economy, where heretofore it had acted as the bulwark defending domestic welfare from external disturbances.” The main implication is that states are becoming more responsive to global markets and international financial organizations than the interests and voices of large sections of their own population.
From this angle, we can see that although global processes transcend and circumvent the nation-state, globalization is still partially embedded in the territory of the states and dependent upon state policies for its particular trajectory. Saskia Sassen (2003: 242) uses the term “denationalization” to emphasize that globalization is not “something” that merely exists outside of the state, or between states, but is a political project that exists inside the policy framework of many states. The state is actively involved in granting rights to outside flows of people and resources, which leads to a “partial denationalizing of what had been constructed historically as national, including the exclusive territorial authority of the state.” Far from being a bystander to globalization, states have undergone significant transformations as they negotiate new relationships between the national and the global:
In the case of the global economy, this negotiation entails the development inside national states – through legislative acts, court rulings, executive orders, policy – of the mechanisms necessary for the reconstitution of certain components of national capital into “global capital,” and necessary to develop and ensure new types of rights/entitlements for foreign capital in what are still national territories, in principle under the exclusive authority of their states. (Sassen 2003: 242)
Importantly, Sassen (2003: 243) argues that denationalization is not limited to economics because those states that engage with the international human rights regime, for example, can grant political and social rights to outsiders. Broadly speaking, however, less authority is delegated in policy-making areas relating to security or social policy, revealing that the prevailing dynamics of globalization are very much created by the political choices of governments with respect to domestic priorities and efforts to create international forms of cooperation.
Nevertheless, neo-liberal globalization presents the nation-state with some serious challenges, especially in light of the destabilizing impact of the 2008 global financial crisis (Gill 2012; Isakhan and Slaughter 2014). These challenges stem from a tension between the role of the state in safeguarding and representing a national community, and the imperative to create an economically flexible society that is competitive in global markets. That is, the competition state is faced with the difficult task of balancing national goals of distributive fairness, collective welfare and national solidarity, on the one hand, with global economic competitiveness, flexibility, and efficiency, on the other. In this context, the nation-state is in danger of losing its “legitimacy, institutionalized power and social embeddedness” as neo-liberal globalization compromises its capacity to enact policies that maintain social integration (Cerny 1997: 251). Despite the persistence of nationalism as a form of “social glue” across the world, it is argued that neo-liberal practices threaten the historical legitimacy of the nation-state in a number of significant ways.
First, the competition state is more constrained in the social policies it can readily enact. To the extent that states are shaped by neo-liberal financial orthodoxy and the operation of global markets, they have to consider both the reactions of these markets in formulating policy and withstand the consequences of financial bubbles and panics (Cerny 1997). In this context, there has been the “financialization” of global capitalism in the sense that financial markets have a growing structural influence relative to other forms of economic and political decision-making (Lapavitsas 2014). This financial discipline and the associated policies of austerity required to satisfy financial markets place serious limits on the ability of governments to pursue domestic policies that require large capital outlays in areas ranging from social welfare to infrastructure investments. Furthermore, the promotion of economic efficiency and competition usually requires labour market reform, liberalizing trade practices, and breaking up monopolies, including state enterprises. The state is thus “hollowed out” as its traditional functions of social provision are curtailed. Consequently, these reforms often clash with historically derived political or ethical principles based on the collective welfare of national communities. The practices of the competition state thus reflect tensions between competing goals of government that limit the domestic policy areas subject to democratic choice. To the extent that governments are seen to prioritize neo-liberal goals over domestic social welfare, the democratic notion that the state represents the interests and voices of national society is challenged.
Second, nation-states have become increasingly beholden to constituencies beyond their borders as a result of neo-liberal globalization. This can undermine the idea that the state is ultimately responsible to the society it represents. By choice or necessity, states sometimes prioritize the interests of global market actors over constituencies within the nation-state. For example, in the ongoing European economic crisis, governments have been forced to enact austerity measures as conditions for EU and IMF loans with little or no public consultation. In Heavily Indebted Poor Countries, the state is also often forced to cater to the interests of international creditors rather than the needs of domestic groups. In 2002, the UN Human Development Report documented that 29 African countries spent more on servicing the debt owed to foreign lenders than on health care (UNDP 2002: 209–10). Furthermore, almost all states seek to attract capital from foreign corporations to promote domestic investment and employment. These investments often provide great benefits to national economies, but they can also create relationships between states and corporations that benefit state officials and foreign shareholders but threaten the livelihoods of local people. Over recent decades, this has been evident in a number of mining and dam projects that have dispossessed or otherwise adversely affected local people, particularly indigenous communities. Because globalization has made the exit options for capital and corporations easier and more numerous, states are forced to placate foreign investors, sometimes to the detriment of the domestic constituencies that elected them.
Third, under the guidance of the competition state, the creation and implementation of government policy becomes enmeshed in the logic of the market. This is because government policy is not only locked into considering market reactions to economic and social policy, the state is also actively marketized in seeking to promote itself within global markets in a similar way to corporations (Cerny 1997: 251). This short-term, market-orientated approach to policy jeopardizes the ability of governments to pursue long-term democratic or social objectives. Specifically, the enactment of long-term social programs and public goods, such as those pursued by welfare states in many Western states during the twentieth century, become increasingly difficult and dependent on private capital within the constraints set by neo-liberal globalization. In order to reduce the costs of the state and avoid budget deficits, areas of public policy are “commodified” in the sense that they are at least partially cut loose from state intervention and become commodities subject to market forces. The privatization of health and education provision and the rise of public–private partnerships in infrastructure development throughout the world are key examples. In this way, the state actively extends market discipline into social and economic spheres previously quarantined from markets on the basis of the public interest or general welfare.
These changes threaten to undermine the historical legitimacy of the nation-state and its democratic justifications. The major implication of neo-liberalism and the financial orthodoxy of global capitalism is that governments find it difficult to uphold the protective and welfare functions crucial to this legitimacy. In one sense, the state is becoming an instrument, or a “transmission belt,” built around the task of pursuing economic growth by liberalizing and deregulating social life and attracting global capital for domestic economic gain. This discipline can potentially clash with democratic responsibilities to the electorate and to long-term social objectives, risking the loss of the associative and public character that gives the state its legitimacy (Cerny 1997). To the extent that governments are sensitive to the discipline of global markets and locked into pursuing economic growth in a neo-liberal system, they are increasingly beholden to global finance and international financial institutions and consequently less responsive to the wishes of the electorate. In this context, governments invoke the “national interest” to support deregulation and other efforts to open national society to the global economy, and economic results – particularly the improvement of living standards and easing cost of living pressures – are increasingly crucial to state legitimacy (Carnoy and Castells 2001: 16). But this source of legitimacy is clearly a double-edged sword: while economic growth may bestow some transient form of legitimacy upon governments that pursue neo-liberal policies, it ties public support for state practices to variable economic conditions that cannot be guaranteed. This is especially problematic in the context of the financialization of global capitalism where various forms of financial instability and crisis reoccur and undermine social welfare and solidarity, as seen most graphically in the 2008 global financial crisis.
As such, there is a profound disjuncture between the historical entitlements of national citizenship and what governments can deliver in the contemporary world. There are signs that severe restrictions are in place on the “things people can expect from even the best-run government” (Cerny 1997: 258). This undermines the “symbolic social function” of the nation-state leading to
a growing disjunction between democratic, constitutional and social aspirations of people – which are still shaped by and understood through the frame of the territorial state – on one hand, and the dissipating possibilities of genuine and effective collective action through constitutional political processes on the other. (Cerny 1996: 130–1)
This not only leads to “an erosion of the idea of a public interest,” but also proves problematic for the stable reproduction of forms of political governance suitable for any form of complex social organization, not to mention a moral license for the interventionism of neo-liberal governance (Cerny 1999: 2). The ability of the nation-state to harness communal solidarity to pursue political objectives is a source of considerable power. The shift to a world of competition states casts a long shadow over this power and creates a “post-democratic” context where the democratic integrity of liberal democratic states is hollowed out (Crouch 2004; see also Gill 2012), opening up public and scholarly interest in alternatives to liberal democratic thought (Isakhan and Slaughter 2014). Competition states are increasingly constrained in their domestic public functions, but economic globalization requires the support of the rule of law, the institutional support that is rendered by states and the international institutions set up by them (Strange 1996: xii). Nation-states require the idea of national belonging and sharing a common fate to secure their legitimacy, but these sentiments are more difficult to sustain within an economic system and a pattern of governance where social life is being reduced in significant respects to efficiency and competitiveness.
These challenges are evident in the so-called “return of the state” in the early twenty-first century. The September 11 terrorist attacks and the launch of the “war on terror” by the United States have demonstrated the state’s unique capacity to maintain domestic order and wage war. But the conflicts in Iraq and Afghanistan have also highlighted the importance of appeals to patriotism and national solidarity to justify the enormous costs of war and the increased surveillance and control of citizens in Western states. Furthermore, the state’s vital role in economic affairs has also been recently reasserted in the economic success of states like China and the emphasis on state-building in development and peace-building initiatives in sub-Saharan Africa. These states may not strictly conform to neo-liberal ideology, but as competition states the rule of law and property rights, as well as education and training, is directed at boosting productivity and providing support for key export industries. In a similar vein, the crucial economic role of the state has been highlighted by responses to the 2008 global financial crisis and ensuing economic malaise in the West. The massive stimulus and bailout packages were funded, coordinated and implemented by states as a response to market failure on a global scale. However, state intervention has largely centred on bank bailouts to safeguard financial stability rather than social insurance for citizens adversely affected by economic turmoil not of their own making. The role of IGOs like the EU and IMF in imposing fiscal austerity on heavily indebted states like Greece in exchange for financial support also highlighted the state’s inability to deliver on its promises of democratic choice, domestic economic stability and social welfare (Castells et al. 2012; Isakhan and Slaughter 2014; Gill 2012). The “return of the state” has thus revealed the serious difficulties in reconciling the social functions of the modern nation-state with contemporary neo-liberal globalization.
These developments have significant implications for the practice of democracy. It is clear that the state will remain a central and constitutive feature of the rapidly changing global political system. But we have also witnessed the increasing political power of non-territorial forms of organization, including IGOs, TNCs, transnational social movements, and international regulatory agencies. These developments have considerable political ramifications for the capacity of states to promote social justice and to recognize and advance the interest of their national populations against the interests of agencies and constituencies beyond the state. As such, concerns that power has been given to distant IGOs or private bodies that are not democratically governed have provoked various forms of public concern and resistance which question the future of democracy within the nation-state (Held and McGrew 2007: 163–73). Susan Strange (1996) deftly describes this situation in Retreat of the State where she argues that people face “Pinocchio’s problem” in a world of overlapping forms of authority and governance. This problem refers to the children’s story where the puppet Pinocchio is turned into a real boy and suddenly has no strings to guide his actions. Without strings, he has to make up his own mind about how to live his life. Likewise, the diffusion of state power and authority has left contemporary citizens with “a ramshackle assembly of conflicting sources of authority” (Strange 1996: 199). Today’s citizens all share Pinocchio’s problem: the strings that bound them largely unambiguously to the nation-state have frayed and the lines of democratic representation and accountability have blurred. But once people are at least partially “freed” from the strings of the nation-state, how do they choose where their loyalty rests and develop effective and accountable forms of authority? There has been no definitive response to this question. States around the world vary in their capacity to generate democratic authority and attract widespread loyalty. Consequently, there are a variety of identifiable responses to Pinocchio’s problem of political action within a context of dispersed authority and loyalty.
Broadly speaking, public responses to globalization in Western states include efforts to either transcend the state in a cosmopolitan sense or to re-entrench national identity. Mark Rupert (1997: 142) suggests that in the US during the 1990s there were at least two distinct positions: the cosmopolitan, democratically oriented left; and the nationalistic/individualistic far right. The cosmopolitan response is notable because it has been at the forefront of global forms of activism and social movements that bypass the state. For instance, many of the protests against global capitalism during the 1990s ignored the policy-making capacities of the state and instead focused upon the IFIs or advanced broader notions of “Empire” or “imperialism” that pointed to the power of unaccountable TNCs over the lives of ordinary people. These protests were significant signs of a progressive reaction against “globalization-from-above” through the operation of social movements with global connections that might be called “globalization-from-below” (Falk 1997: 19–22). In 2011, the Occupy movement refocused attention on the state, largely due to the regulatory failings that led up to the global financial crisis and the perception that representative democracy in the US (and beyond) is overwhelming influenced by the moneyed interests of Wall Street (Bray 2014). More generally, campaigns inspired by human rights and environmental movements include groups that attempt to explicitly promote social justice and democracy. While these movements do engage with the policies of states, the primary aim of campaigns on climate change or global poverty, for example, is to represent public concerns that transcend state interests and to generate action on global problems facing vulnerable people around the world. However, cosmopolitanism does not adequately capture the responses of some groups such as the Zapatistas in Mexico, who explicitly resist neo-liberalism but are very much embedded in local communities, despite their effective use of transnational communications (Castells 1997: 72–83; Pleyers 2010). Many of these groups feel that the nation-state has lost its traditional legitimacy and increasingly identify with sub-national forms of community.
The nationalistic far-right response involves an array of conservative groups that are suspicious of both governments and globalization. In particular, far-right reactions to economic globalization and the prospect of a world government rest on profound suspicions concerning the power of external political and economic forces and the belief that the state is complicit in allowing them to weaken or destroy the nation (Rupert 1997: 150). These groups are interesting because they exhibit the fears of a segment of a population in wealthy states that generally benefit from the operation of economic globalization. While these anti-government claims have a distinctly American cast to them, the signs of far-right politics have been evident in many places around the world. In Europe, we have also seen increased forms of xenophobia and the mobilization of right-wing groups in response to fears about Muslim immigration and refugee intakes. These extreme forms of nationalist “backlash politics” are evidence of the insecurity felt by some people buffeted by globalizing forces, which are exacerbated in times of economic crisis. Across the world there are sections of societies that seek some solace in forms of autarchic nationalism or despotism. In this context, Benjamin Barber (1998: 34–5) warns “if we cannot secure democratic communities to express our need for belonging, undemocratic communities will quickly offer themselves to us.”
Democratic theorists have responded to the dispersed authority of the state in a variety of ways. In most respects the divide between the left and right of politics has remained trenchant as ever, but the divide between nationalist and cosmopolitan arguments have become more pronounced with significant rise in cosmopolitan scholarship since the mid-1990s. While the specific approaches of global democratic theory will be outlined and examined later in this book, there are few key themes that need to be mentioned here to give a brief overview of how democratic theory has responded to the rise of globalization and the changing role of the nation-state. First, one strand of democratic theory fundamentally assumes the existing nation-state as the framework of analysis. Scholars such as John Rawls and Philip Pettit assume that the state remains unquestionably at the centre of political and therefore democratic life. Rawls’ defence of liberalism in The Law of the Peoples accepts the state as central to both liberal democratic and non-liberal societies (which includes what he refers to as “burdened societies”: societies living under historical, social and economic circumstances that make achieving a “well-ordered regime” difficult, if not impossible) (Rawls 1999: 90). But in assuming the state there are strong indications that Rawls is trapped in a “vanished Westphalian world” in the sense that his just state system simply replicates traditional assumptions that do not seem to cope well with the current proliferation of transnational flows and global networks (Buchanan 2000). This is indicative of scholarship with a distinctly communitarian and nationalist cast that assumes the moral and political importance of democracy within existing boundaries.
A second strand of democratic theory argues for transcending the state. For instance, scholars such as David Held and Richard Falk develop theories that attempt to transform the state and embed it within cosmopolitan forms of global democracy. Since the 1990s, these cosmopolitans have developed the idea that existing nation-states cannot be the basis for a just future and that the state system must be changed in order to create a more inclusive and democratic global order. These forms of cosmopolitan theory emphasize the moral and political shortcomings of the state in its capacity to address global problems given the rising significance of contemporary globalization. The intensification of globalizing trends, including the positive contributions of transnational civil society and forms of global consciousness, has been central to the cosmopolitan critique of the state system. These impulses are utilized by cosmopolitans as the political grounds for developing cosmopolitan democracy in which global institutions are directed by the political and electoral activity of all human beings. This project is ultimately focused on the creation of new global forms of democratic political community.
A third strand of democratic theory largely ignores or bypasses the state. All forms of cosmopolitan scholarship attempt to move beyond existing states to some degree, but this strand of democratic theory consciously seeks to shift democracy away from state institutions and therefore gives little or no account of the role of the state in emerging or proposed forms of transnational democratic practice. The work of John Dryzek (2006), for example, provides little detailed examination of the state and instead focuses upon the development of forms of global deliberation and discourse in transnational forms of civil society. These forms of democratic practice bypass the state and create new modes of political participation outside of state authority and beyond electoral conceptions of democratic practice.
Finally, a fourth strand of democratic theory argues that it is possible and desirable to reinvigorate the state as a locus of democratic action. While there are political discourses such as the Third Way which argue for a revival or reconstruction of the nation-state, serious questions are raised about whether such arguments are directed at reforming the state as an authentic democratic polity or merely see the state as an institutional vehicle for neo-liberal practices (see Chapter 6). There are also various attempts to conceive of “cosmopolitan states” that transcend nationalism as the foundation of law and politics in an era of globalization (e.g. Brown 2011; Glenn 2013). The key issue for democratic theorists is whether the state can be revived as a framework that develops and utilizes political power for democratic purposes, rather than for private gain of some individuals and groups. One example of such a position is Robyn Eckersley’s argument for a “green state” (Eckersley 2004). Contrary to most Green political theory, Eckersley contends that the liberal state could be transformed by Green principles and environmental activism to create a state and international system able to address and moderate environmental problems. This argument rests on developing the regulatory capacities of the state, in conjunction with developing forms of “environmental patriotism” (Eckersley 2004: 231). Likewise, there has been a revival in republican arguments that seek to reconstruct the capacity of the state to promote liberty within and beyond its territory (S. Slaughter 2005, Laborde 2010). These arguments tend to support cosmopolitan arguments for stronger and more wide-ranging forms of global governance, but contend that this requires states that are animated by publics shaped by republican virtues and institutions.
There are a great number of questions about the feasibility and desirability of these different perspectives regarding the democratic potential of the state in light of globalization. These will be explored in later chapters, but the underlying point here is that democratic theory does not necessarily assume that the state will be the sole location of democracy. This chapter has demonstrated that democratic practices and public choice within the state are constrained by global forms of governance and the neo-liberal transformation of state capacities. It is also the case that political contestation is no longer solely focused on the policies of states. Despite these transformations, however, the agency of the state is still significant. It is important to recognize the ways in which neo-liberal globalization and the financialization of global capitalism have involved political leadership that has both required and transformed the state (Gill 2012). In this light, democratic theories need to consider how their respective visions can be implemented given the enduring significance of the state in contemporary global politics. However, they also need to address the development of global forms of governance and transnational networks of civil society. These developments have opened up important possibilities for the development of democracy beyond the state that will be examined in the next chapter.
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