Abstracts Of Three Proposed Papers on Institutions and Globalisation

These are being offered to various conferences and seminars. In due course the completed papers will be put up on this website.

Keywords: Globalisation & Trade; Political Economy & History;


Just as nation-states had to evolved a national institutional framework to underpin their economic activities, the world has had to evolve a parallel framework for international economic intercourse. Prominent examples are the IMF and the WTO and their related rules, but there are a host of such organisations. (For instance, the Organisation International de Métrologie Legale (OIML) is a one of a number of institutions which sets common measurements standards for the world.)

This paper explores three issues:
– the growth of such institutions in the development of the nation-state in the nineteenth century and early twentieth century. (A feature of the larger project of which this paper is a part, is the argument that the nation-state is a response to the regionalisation and globalisation of the nineteenth century);
– the evolution of comparable supranational institutions, mainly in the twentieth century as globalisation intensified;
– the extent to which nineteenth century Pax Britannica is different from late twentieth century Pax America.

The topic is too wide to be fully covered in a single conference paper, so it will look at themes, some key or paradigmatic institutions, with some country examples.



Many see late twentieth century globalisation as a threat to the nation-state, ignoring that the nation-state was a creation of nineteenth century globalisation, and has been constantly adapting as globalisation has intensified.

This paper explores options for nation states by comparing the options and limitations that three examples face in the current world economy. They are

1. A state of the United States of America which has little economic autonomy and limited political sovereignty as a consequence of the United States constitution, but which has one of the highest material standards of living in the world (irrespective of which of the fifty is exampled).

2. A country in the European Union which has more economic autonomy and political sovereignty than a state of the US, but which has given up much of these in order to benefit from the European Union.

3. A country, such as New Zealand, which does not belong to any ‘globalised’ integrated regional economy as comprehensive as the United States or the European Union, and therefore has, in principle, more economic autonomy and political sovereignty.

(Choosing the US and EU exemplars has not been completed, but they will in principle have economic structures similar to New Zealand.)

Beyond the comparison is three visions of the future globalised world:
– one like the United States in which what were once were nation-states have very limited autonomy;
– one like the European Union in which nation-states have abandoned much autonomy but retain more than a US state, and have an active involvement in the political process, although there are some democratic (people based) institutions;
– one which would be an extension of today’s world in which nation-states retain greater autonomy, especially over migration, but nevertheless are regulated by supranational arrangements, and where democratic institutions have a very small role in world governance.



It becomes clear, after setting out the economist’s broad understanding of globalisation, that there is a tendency to assume that nation-states are fixed through time. This cant be true, since many of them did not exist in 1820 when the globalisation process began and others were colonies. Indeed it can be argued that the nation-state as we know it is a creation of the underlying processes which drove globalisation. Moreover, boundaries between states change, and the scope of the activities of nation-states have also changed over time and are still changing. Do national boundaries matter?

The paper looks at two examples which help answer this question, each of which is concerned with economic sovereignty and which are intimately interconnected.

First, it seems likely that, even if there is open access to goods and services and capital flows, there will continue to be restrictions to the movement of people across many, but not all, boundaries. (Mobility within the EU is a major exception.) International mobility of labour is much less today than it was in the nineteenth century.

Second, while there will be policy convergence in some areas – most notably the loss of the power to restrict goods and services and capital flows – in many other areas policy seems likely to continue to reflect cultural and political differences and national objectives, albeit tempered by common technical and economic conditions. (For instance the United State and Canada can have different health care regimens, despite their border being the greatest trade border in the world.) Nor need there be a driving down of such policies to a lowest common denominator. The paper explores, not entirely satisfactorily, where the boundary between those policies which are likely to become internationalised and those over which a country may retain a degree of sovereignty, in part illustrated by the (aborted) Multilateral Agreement on Investment.

The paper’s concern is economic sovereignty, although parallels are briefly drawn with human rights sovereignty, and some attention is paid to the different US approaches to the use of the military (Iraq?) and trade (WTO disagreements).