State thr political impact of globalisation …

According to the disciplining hypothesis, globalization restrains governments by inducing increased budgetary pressure. As a consequence, governments shift their expenditures in favour of transfers and subsidies and away from capital expenditures. While globalization has radically increased incomes and economic growth in developing countries and lowered consumer prices in developed countries, it also changes the power balance between developing and developed countries and affects the culture of each affected country. Globalization has led to a sharp increase in trade and economic exchanges, but also to a multiplication of financial exchanges. In the 1970s world economies opened up and the development of free trade policies accelerated the globalization phenomenon. Between 1950 and 2010, world exports increased 33-fold.

• Globalisation results in an erosion of state capacity i.e. by reducing the ability of government to do what they want to do.
• It gives way to a more minimalist state that performs certain core functions such as the maintenance of law and order, and the security of its citizens.
• In place of the state the market becomes the prime determinant of economic and social priorities.
• Globalisation does not always reduce state capacity. The primacy of the state continues to be unchallenged basis of political community.
• State capacity has received boost as a consequence of globalisation, with enhanced technologies available at the disnosal of the state to collect information about its citizens.