Post on 01-Jan-2016
SMALL S
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GLOBALIZ
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NAL
POLIT
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CONOMY
DR
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GLOBALISATION
• Generally speaking a buzzword that refers to the compression of space in global politics
• Political – Sovereignty• Economic – associated with the
‘internationalisation of the state’• Cultural homogeneity
• End of Cold War and of bipolarity
• Effective ‘globalisation’ of market system
• Move towards regional forms of governance
HISTORICAL DEVELOPMENT
AND SMALL STATES…
• The era of bipolarity often provided states with East/West axis of influence
• Globalisation has seen small states maintain cultural/political autonomy through partnerships and links with others
• Regionalism, groupings within international organisations taken on greater significance
REGIONALISM
• States merge into groups so to maximise collective agreements
• Utilised in trade and security agreements
• Often seen as a criss-cross rather than coherent blocs
THE GLOBAL POLITICAL ECONOMY
• Emerged into a single entity after the cold war
• Deregulation and greater capital flows have incensified the significance of the global market
• Looked to cement alliances within groups and look to certain comparative advantages
• Ideology on free market principles that dates back to the Mont Perelin society and Hayek
• Encourages privatisation, free trade and reduced state spending
• Emphasis on the conviction that economic growth is best generate through the private sector via the market
NEOLIBERALISM
REALITIES OF NEOLIBERALISM: THE COMPETITION STATE
• Termed by Phil Cerny• States transformed in bodies that
look to utilise the global market in a manner that works for them
• Look to find a comparative advantage in order to attract investment
• Maintain social cohesion
• Open Economy• Tax breaks for
Foreign investment
• Maintain welfare structures and services
• High income/service tax
EXAMPLES: NORDIC MODELS
• Took traits of the Nordic model
• Neoliberalism such privatisation of banking system
• Financial hub through high interest rates
• Crash
ICELAND
• First that responded to the Nordic model
• Lowered Corporation & Domestic tax and increased ‘knowledge’ economy
• Looked to the global economy for FDI and inward investment
• Growth• Crash
IRELAND
• Small states that rely on providing tax havens for outside investors
• Certain Islands forged a niche market through globalisation
• Nothing new - Switzerland
OFF SHORE FINANCIAL CENTRES
CRISIS
• Nordic model hit (Oil-rich Norway the exception)
• Iceland and Ireland hit and responded in contrasting ways. Partly due to the latter’s membership of the Euro
• Pressure placed on restricting offshore investment locations
SMALL STATES: PROBLEMS
• Convenient label in terms of defining states
• Often used as an excuse for failure of strategy or of specific policy
• Term contested (defined by some as under 1.5 million)
• Developed versus Developing?
• Advanced Small States can play-off in larger ‘rule-making bodies’
• EU/NATO for example
• ‘Failed’ (big or small) states experience greater load
DEVELOPING/DEVELOPED WORLD
• Even the most powerful ‘South’ countries seek specific strategies in the global economy
• China provide cheap labour for multinational investors
• Strategic realities of the completion state in the global political economy
CORE OF THE PERIPHERY VS PERIPHERY OF THE CORE
BRINGING CLASS BACK IN ?
• Brings us back to look at who has the power in the international political economy
• Theories of ‘Transnational Class’ formations give us an alternative understanding of Global capitalism
• Small States assume specific role within it• Perhaps reflected even more in light of
the financial crisis?