Sunday, November 24, 2013

The Rise of IGOs and MNCs....and the Decline of the State

     As Samuel Huntington points out about democracy in his 1991 book entitled “The Third Wave: Democratization in the Late Twentieth Century”, the development of Globalization has also occurred through historical waves which have increased the influence of some actors on the international stage, and reduced the influence of other actors.  Those specified historical waves or transitions favoring global economic consolidation, have occurred in conjunction with technological evolutions and with wars such as World War I, World War II, The Cold War, and now the so-called Global War on Terror.  The result of globalization has been the rapid increase in influence for Intergovernmental Organizations (IGOs) and multi-national corporations (MNCs) and the global economic system, with a notable decline in influence for individual states.  Since the main emphasis of most non-government organizations (NGOs) is to provide information in support of IGOs, I view the majority of fluctuations in these spheres of influence in direct correlation with the main international IGOs and MNCs.

     IGOs such as the United Nations have gained considerable influence on the international stage during the decades following the conclusion of World War II because “`international organizations' have developed into `global governance agencies' with a certain autonomy from states” (Scholte, 22).  The treaty organization of the United Nations, establishing international democracy aimed to correct the true equality flaws of the League of Nations, was the second attempt at international democracy and a regulated global economy.  The United Nations made improvements on the prior League of Nations by providing the five permanent member-states of the UN Security Council with a veto power that succeeded in basically establishing a collective international hegemony among the most powerful allied states after World War II.  The structure of the UN Security Council allows it to implement action against non-compliant or accused aggressor states through collective actions ranging from unified economic sanctions to collective military intervention. 

One of the most important factors concerning the increase of international influence among IGOs is the interconnectivity of globalization.  The World Trade Organization, which can economically isolate non-member or non-compliant states through consolidated trade restrictions and sanctions, is predominantly comprised of members of the United Nations.  Whether politically or militarily, international power under globalization rests on the accumulation of capital, and IGOs such as the United Nations and the WTO would not be able to wield such international influence if not for the International Monetary Fund (IMF), which establishes international currency exchange rates binding states to global trade and debt, and the World Bank, which issues conditional capital loans to so-called lesser developed countries (LCDs) in order to bring these LCDs into the global economy and to provide access for foreign private sector investment and exploitation of natural resources to include cheap labor.  In such an international web of binding capitalism, private sector multi-national corporations have also grown in international strength due to the fact that “states cannot tame the tyranny of global corporations” (Scholte, 32).  Due to international and regional trade agreements such as the North America Free Trade Agreement (NAFTA), private sector corporations are able to manufacture in lesser developed states with lower wage requirements and maximize profits by selling to consumer states with higher wage requirements, which in many cases is the origin point of the corporation itself. 

The international entrenchment of capitalist globalization, the Bretton Woods organizations, and the consolidated power of the United Nations have all contributed to the diminished amount of regulating power that the traditional territorial state has over the private sector corporations and the rise of IGOs and MNCs has caused many analysts to link “the growth of global relations to `the diminished nation-state', `the decline of the nation-state' and `the retreat of the state' (Scholte, 21).  It is this phenomenon of economic relations that has diminished the individual power of the state, and the main reason that this individual influence has been diminished is because a great majority of individual states are intertwined into the global economic system; meaning that they are unable to subsist economically if isolated from the global economy or are already enslaved under international debt through the World Bank or IMF.  The counter argument to this view is that “a state could, if it wished, extricate itself from global relations”, but this is not a realistic argument and at this juncture in international globalization, economic independence from the global economy would not be viable for a majority of states, especially post-colonial states, and certainly not a permanent option for any state (Scholte, 21).


Huntington, Samuel. 1991.  The Third Wave: Democratization in the Late Twentieth Century. Norman, OK: University of Oklahoma Press.

Scholte, Jan. 2000. Globalization: a Critical Introduction. London, England: MacMillan, 21-33.

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