The Diminished Nation State: A Study in the Loss of Economic Power
The pace of technological change, especially the speeding up of communications, and the extent of international eco nomic integration have, together, brought into question the effectiveness of many traditional, national economic policy instru ments. The erosion of economic sovereignty has led many to ques tion the future of the nation state as the main building block of governance. This questioning has, in turn, affected the terms of debate of national politics. There has been, in many countries, a rise of populist movements rejecting closer international integration and som? of its most visible symbols, such as trade and migrants. What is variously described as a "new nationalism," the "politics of cultural identity," the "politics of the soil," "positive nationalism," or the "new mercantilism" reflects, each in a different way, a reaction to the loss of authority of nation states and an attempt to reassert it or to assert other forms of identity. This essay deconstructs what is loosely called "globalization," or economic integration, and the ways it affects the economics and politics of nation states. It argues that simple determinism is not in order. There are complex iterative processes at work. Domestic policy making and politics have been internationalized and foreign policies have been subjected to growing domestic pressures. The nation state has "lost" sovereignty to regional and global institu tions and to markets but has also acquired new areas of control in