Challenges to state sovereignty due to globalization
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Globalization has had a dual effect on the sovereignty of the nation-state. Since 1945, the normative framework of human rights has embedded a sense of obligation on the part of the state toward its citizens. The social contract now has a strong welfare element to it. Yet, simultaneously, economic integration has limited the range of policy options available to states. This has diminished their capacity to meet these obligations. Sovereignty is the absolute authority over a certain territory. Many commentators would agree that this absolute authority has been challenged by a number of forces operating beyond the nation state; from the threat of global terrorism to the challenges of climate change, the powers of international organizations to influence of the global market. Given the impact of the global financial crisis on the national economic policy, I want to explore the ways in which capitalism has changed the nature of state sovereignty. This limitation of states‘ capacity must be understood as both an active and a reactive process. Active in terms of formulating policy in favor of market principles which the structure of globalisation encourages. Reactive in terms of responding to shocks, crises and booms in the global economy. In both cases, states are no longer entirely free, or entirely sovereign, to enact policy of their own determination.
‘Sovereignty is a contested phenomenon‘ (Held, 2002). The initial formulation of this concept, during the Enlightenment, entailed an absolute authority over a given community - the state. The borders of the state delimited the area over which the ‘sovereign‘ had political control, the area over which no other state could intervene. This was guaranteed through the monopoly the state had over the use of force. Over the centuries, the social contract took on a more complex meaning. In the works of Jean-Jacques Rousseau, the state has obligations to its citizens: the creation of equality
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