UNIT 3 CHANGING ROLE OF THE STATE: ISSUES

AND CHALLENGES
Structure
3.0 Learning Outcome
3.1 Introduction
3.2 Changing Nature of the State
3.3 The Trajectory of Change
3.4 Interrogating the Neo-liberal State in the Era of Globalisation
3.5 Conclusion
3.6 Key Concepts
3.7 References and Further Reading
3.8 Activity

3.0 LEARNING OUTCOME

After reading this Unit, you will be able to:
• Appreciate the changing nature of the State
• Trace the trajectory of the evolution of the State
• Discuss the role of the Neo-liberal State in the backdrop of globalisation; and
• Understand the shape of the new State in the making.

3.1 INTRODUCTION
The study of the State has traditionally been a problem area because such studies have
seldom been free from pro-establishment or pro-authority bias. From an epistemological
angle, it means the same as saying that State has seldom been treated as what it
quintessentially is: a historically evolving phenomenon taking shape in response to
changing times and conditions of the society. Not that history of State formation has been
totally overlooked. From the ‘historical’ systems analysis of Rostow to the ‘historical’
structural analysis of Andre Gunder Frank, the State has been treated from a historical
perspective only cosmetically. C. Wright Mills had warned that history can neither be
introduced as an ‘introductory padding’ nor as an ‘ad-hoc procedure’, which
unfortunately is common among most scholars of the State. This historical trend of
scholarship on the State has degenerated to a pathetic level lately and this trend is easily
evidenced by endless descriptions of the State. Just to take a sample of the Third World
State only (as distinguished from the State in the developed World of the West), the
1960s and 1970s witnessed an outpouring of literature on a ‘modernising’ or

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‘developmental’ State of the functional-systems’ theorists as contrasted against their
radical counterparts invoking ‘strong’, ‘over-developed’ and ‘relatively autonomous’
‘post-colonial’ States. Whereas the critical decade of the eighties produced rather an
ambiguous set of concepts such as the ‘Rentier State’, the ‘Peripheral State’ or the
‘Bureaucratic-authoritarian State’, the globally sensitive nineties allowed its negative
imagery to take a good float on the State which came to be described as ‘Vassal State’,
‘Predator State’, ‘Vampire State’, ‘Receiver State’, ‘Prostrate State’ and even ‘Fictitious
State’, ‘Show of State’, or ‘Collapsed State’ (Manor, 1991).
What is the way out of these ‘scholastic straw-threshings’ (Gramsci’s famous expression
for the non-revolutionary intellectuals)? As long as the scholarship on State fails to shake
off its ideological hang-ups, it will always be maintained that State’s sovereignty is on
the decline in these days of global capitalism even though the same thought seems to
exclude the mighty American State. Instances of scholars extolling ‘American
exceptionalism’ allowing this ‘mighty power in a unipolar world’ to freely enunciate and
ruthlessly implement its doctrine of national interest on the territory of other less
endowed but equally sovereign States are not rare. Against this backdrop, the present
Unit will explore some of the issues connected with the changing trajectory of the State
including its correct status in the contemporary globalisation context.

3.2 CHANGING NATURE OF THE STATE

An objective and dispassionate viewing of the State as a historical phenomenon would
entail in its analysis their ‘interconnections as an integrated totality’. This is a dialectical
view encompassing both intra and inter-levels of ‘inter-connections’ which actually
provide the moving motor to history. Does this unfolding of history (evolution of State, in
our context) mean that external causes have little role in its formation? “Not at all, it
holds that external causes are the ‘condition’ of change and the internal conditions are the
‘basis’ of change, and that external causes become operative through internal causes. In a
suitable temperature, As Mao Zedong, the Chinese leader, once put it, “An egg changes
into a chicken, but no temperature can change a stone into a chicken, because each has a
different basis”.
Roots of change are to be traced to these twin ground realities viz., basis (internal) and
conditions (external). A continuous process of embedding of such changes is another
name for history which alone, therefore, can convey a holistic view of the phenomenon
(i.e. the State in our case) in question. There is another layer of thick icing over
understanding of the State, further into its changing role. This pertains to its relationship
with society. It should be clearly understood that State is a creation (a political
contrivance) of the society; and it is not an unavoidable anthropological need. State is not
an organ of the society; former’s appearance and growth are inorganic to the human
needs and survival. This way of viewing helps unlock a vast vista, which surrounds the
State in its nature and functions ever since princes and lords struggled during 14th and
19th centuries and effected a model of national unity as scripted in the Westphalian Treaty
of 1648 and the Westphalian Order had the Nation State as its kingpin. It flourished till
the World War II which marked the end of this global era. David Held has insightfully
summarised the “Westphalian Model” in terms of its following features:

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• The world consists of, and is divided by, sovereign States which recognise no
superior authority.
• The processes of law making, the settlement of disputes and law enforcement are
largely in the hands of individual States subject to the logic of ‘the competitive
struggle for power’.
• Differences among the States are often settled by force: the principle of effective
power holds sway. Virtually no legal fetters exist to curb the resort to force;
international legal standards afford minimal protection.
• Responsibility for cross border wrongful acts are a private matter concerning only
those affected; no collective interest in compliance with international law is
recognised.
• All States are regarded as equal before the law; legal rules do not take account of
asymmetries of power.
• International law is oriented to the establishment of minimal rules of co-existence;
the creation of enduring relationships among the States and people is an aim only
to the extent that it allows military objectives to be met.
• The minimisation of impediments on the States’ freedom is the ‘collective’
priority (Cf Pierson, 1996).
There are two major operating principles of the Westphalian system, the Liberal State
which grudgingly conceded space to individual’s welfare and the balance of power which
held the States together through fear of punishment for disturbing the status quo. The
operation of the ‘Liberal State’ complemented the ‘balance of power’. The former
promoted justice at home in terms of granting civil and political rights (but not social and
economic rights) and promoting a ‘self-regulating market’ at home and abroad. The latter
saw to it that the competition of the economic systems does not, disturb the prevailing
asymmetries (inter-state) and considerations of justice do not extend to non-European
States. However, powerfully minded, this train got derailed and the Second World War
broke out.
Toynbee’s famous characterisation of “An ideological revolution (nationalism) which
reinforced the Westphalian Order has actually substituted religion and made the State an
object of worship” started showing the results. They were soon realised in, which is
famously known as, post-war social contract, another name for the Welfare State which
takes its birth in these circumstances. This Welfare Capitalism (Lord Keynes was its main
architect) has on its agenda for the “Labour to accept capital’s right to ownership and
overall economic direction in exchange for social benefits, an expanding Welfare State
and a guaranteed level of employment security” (Graf, 1995).
This historic social pact actually marked the onset of the Counter-Westphalian order
though, it should in all fairness be mentioned at the same time, this contract was not
strictly applied to the masses of the Third World for its welfarist benefits. And that was
the breeding ground of a ‘primary contradiction’, as Claus Offe has insightfully
highlighted, for the Capital which found itself implicated because of those concessions it
gave to people and institutions in the previous era. According to Offe, the welfare-

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oriented concessions may have brought greater social peace and increased mass
purchasing power, but in the long-run it turned out to be also a limitation on Capital’s
“Sphere of action, flexibility and profitability and hence a threat to its power”. Capital’s
logical response, according to him, was to unilaterally abrogate this welfare contract and
resuscitate the market forces (which were under the State’s regulation under this historic
contract) mainly by means of “Wresting functions and powers from the State and
privatising or abolishing them”(ibid.).
This is the advent of globalisation in recent times which has submerged most of the Third
World countries, though they had also not been the direct beneficiaries of the Welfare
State dispensations earlier. Trade, rather than domestic mass purchasing power has
become the driving force of the new global economy. This is despite the fact that not
more than one-quarter of global trade comes under the GATT (General Agreement on
Tariff and Trade) i.e. regulated free trade. Internationalised division of labour has
become the unfortunate norm as internationalised production has eclipsed Fordist mass
production. Part-time, low-wage employment (the McDonaldisation of the work force)
becomes the norm for most; while high-quality, high-technology governed production
around Information and Communication Technology (ICT) are reserved for select few.
The implication for State is nothing but to adapt to these new strategies. “Since there are
no longer any national economies or national industries or national companies, observes
Robert Reich (1991), “All that remains behind are people who share a political system....
Each nation’s primary political task is to cope with the centrifugal forces of the global
economy.” (Prof. Adrain Leftwich (1994) makes the point clearer. According to him the
distinguishing characteristic of development states (i.e., states with consistent average
economic growth of 4% or more during the past three decades e.g. India) has been that
their institutional structures, especially their economic bureaucracies have been
developmentally driven, while their developmental purposes have been politically driven.
In short, fundamentally political factors have shaped the thrust and pace of their
development through the changing structures of the State).
Has this drive towards globalisation-ever on increase in scope and intensity-generated
adversarial “conditions” in which State, especially in the Third World, is under pressure
to offer the wrong end of the stick to its people? Two concurrent flows are visible in
these days of Counter-Westphalian Order in the making: while the growth of a global
consciousness leading to occasional spurts of initiative to form a ‘global civil society is
very much in evidence, the twin operating principles of (i) free trade, and (ii)
revolutionary uses of ICT, which geared up globalisation on a World Trade Organisation
(WTO), vehicle are no more offering assurances to Capital Multi-National Corporations
(MNCs) of one hundred per cent return. On ‘free trade’ front, the matter boiled up on the
eve of 2004 US Presidential elections: none, other than, Prof. Samuelson challenging the
claims of ‘free trade’ orthodoxy (led by Profs. Bhagawati and N. Gregory Mankiw) that
the amount of ‘winnings’ from free trade would more than compensate for the job–loss
caused due to outsourcing, and telling the public that the Luddites may after all be
having a point in protesting against an annual outflow of a large number of jobs. It is
important to bear in mind that Prof. Bhagawati whose name is now identical with ‘free
trade’ had only recently praised Prof. Samuelson as ‘the greatest economist of the last
century’.

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On the ICT front, the revolutionary potential has done as harm to the Capital as it did
good to the common person on the streets. We have, for instance, on the authority of
Prof. Mahmood Mamdani to know that Mr. Al-Zawahiri (the ideologue of Al-Qaeda and
second to Osama bin-Laden) insisted on “Leadership to be technologically savvy” and it
has to recognise that the old methods must give way to the new. He says “The technology
available now, particularly the Internet”, will build up cadres and you don’t have to seek
them” (Mamdani, 2004).
Whether it is mass politics protest against the Chilean dictator Pinochet or President Bush
against American invasion of Iraq, the Internet has come in handy to the people to rally
together with the help of this communication technology which also undid the Welfare
State to a substantial extent. Social development oriented uses of ICT are far too many in
the fields of public health, farmers’ market, grievances redressal etc. The development
discourse, which centred around the Washington Consensus originally contained a list of
ten reforms aimed at attracting private capital as the Latin American States became
sluggish in their dispensations towards their people following the debt crisis of the 80s.
But very soon this focus shifted to the second generation of reforms centering around
governance, emphasising on the caring aspects of the State’s day-to-day functioning and
demanding more accountability, transparency, and openness.
An important point to note further in this connection is that theWashington Consensus
was not strictly followed by many States, though it has been the philosopher-driver of
globalisation. China did not follow the Consensus to the text. The Chinese relied heavily
on public enterprise and State intervention; India also didn’t fall in line, strictly speaking.
The four BRIC nations (Brazil, Russia, India and China) may have benefited but
definitely not their poor whose numbers are also swelling. Further, most other Third
World countries were pauperised by this global integration of national economy on an
inequitious footing.
Good old ‘End of History’ theoriser (in 1989) Prof. Fukuyama, has of course, come full
circle in his revised narrative published in the Summer of 2004. As Prof. Fukuyama says
now, the September 11 is the date when the Reagan-Thatcher era ended. Because that day
“Underscored a key feature of the post-cold war world. While the great problems of
world order in the 20th century were caused by too-powerful Nation States such as
Germany, Japan and the former Soviet Union, many of the problems of our current age,
from poverty to refugees to human rights to HIV/Aids to terrorism, are caused by States
in the developing world that are too weak”. Many problems have come from “Lack of
sufficient State oversight, laments Fukuyama (having extolled the triumph of Liberalism
and privatisation only a decade ago), The easy gains from privatisation and deregulation
have long since been achieved”. Bring back the State, pleads Prof. Fukuyama now
(Indian Express, July 10, 2004).
Interestingly, both the quoted passages are reactive in nature, one for the States in the
Third World and the other for the American State. Obviously, you cannot have one
standard for the East and another for the West. Truth of the matter actually is that the
State’s efforts need to be supplemented now and ‘roll back’ is not the answer. Again,
State needs to change its old time thinking mindset and learn to evolve and depend on
alternative sources and frames of action and thinking. Otherwise, estimates by Mann
(1990) and others have clearly shown that the State expenditure (whether on war and

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administration as in 18th and 20th centuries or on social development during 19th century)
on societal activities has been static at 30-40 per cent level or on rise, as some others have
maintained. It has been mostly, a matter of ‘attitude of governance’ rather than a
categorial change (from ‘public’ to ‘private’). In his most recent book, PLAN-B, Lester
Brown (2005) has convincingly argued that Planet Earth is indeed in peril as evidenced
by bourgeoning undernourished population, the HIV/AIDS menace, water crisis, falling
land productivity and adverse climate change induced by a fossil-driven industrial
economy basically of the developed west. There has been enough prognosis now; the task
is to change the mindset of the people in power and look for alternative actors and
sources to complement the failing State efforts.
In this direction, one notices diverse NGO-launched initiatives to soften the adverse
impact of globalisation, which has since emphasised the twin principles of devolution of
powers and participative development at the grass roots level. Food self-reliance, to take
only one example, is one such approach which, on the global scale, had many such NGO
takers: Jamaica’s ‘Grow Our Own Food’ Campaign, Bangladesh’s ‘Grameen Bank’
experiment, and similar local experiments in Zimbabwe and a number of African and
Latin American countries. Many such initiatives elsewhere have joined the State in
supplementing its efforts at food security and nutrition. Another glaring example, not to
be missed, is the adversial effects of global warming which had forced a change in the
attitude of the government as well as the elites, shifting now towards alternative sources
of energy. Germany already has 12000 MW of wind-based electricity generating capacity
and Denmark with 2900 MW is meeting 18 per cent of its electricity needs through this
renewable source. India has an impressive fifth position in the world with 1700 MW non-
conventional energy (The Hindu, 2005).
Non-governmental initiatives have made an important presence in the global society
today and they have introduced a new dimension viz., “A drive towards common or
universal standards and consciousness, and a new global constituency for change.
Communication technologies only facilitate this social phenomenon”(Patel, 1995).
Another important distinguishing feature of the emerging global society is that some of
the institutions for the management and governance of this global society are already in
place. The re-invigorated UN agencies have chalked out a pro-active stance for
themselves; witness World Conferences 1990s on environment, human rights, gender
justice, population growth, urban development etc. which got the governments moving to
commit themselves to the various social development goals.
As Amartya Sen told recently to the Commission on the Status of Women (March 2005)
at its special session in New York: “The United Nations is often separated out these days
for particular chastisement for being ineffective (or worse); the UN and the intellectual
and political movements associated with it have contributed greatly to making our world
a bit less nasty and more liveable.” (Cf Jain, 2005). Human Development and Human
Security, two new themes in human aspirations have occupied centre of stage in these
international bodies; these innovative articulations entailing a rearrangement of resource
allocation profiles for new commitments need to be met. However, all these may not
mean much despite the massive support these new commitments command among the
masses of the world. A perceptive management-thinker, I.G Patel (op.cit.) has identified

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five ‘difficult but unavoidable problems’ which will become more urgent in the years to
come as the hostile globalising forces come closing in around humanity:
• The legitimacy of individual and group rights and the role of the global society
vis-à-vis these rights
• Equity in the governance of international institutions
• Equity in international economic relations
• Equity and global environmental protection
• Matching responsibilities with resources at the global level
The Counter-Westphalian Order has to solve the problems outlined above so that a
society which is politically plural, economically egalitarian, ecologically sensitive and
societally diverse and accommodative finally results along with a responsive State whose
powers are best exercised through sharing and accountability. Summarily speaking, the
international community’s dedication for fulfillment of the Millennium Development
Goals pertaining to humanity’s well-being has been inspired by the motto of the Counter-
Westphalian Order: ‘Free development of each is a condition of the free development of
all’.
Having outlined the ‘conditions’ of change (general politico-economic environs) which
have overtaken the State, let us now turn to the ‘basis’ of changes which the State has
undergone till date. We will conclude the mapping of this trajectory of change in the role
of State with a profile sketch of the State in the current globalisation context.

3.3 THE TRAJECTORY OF CHANGE

We have already read about the evolution of the concept of the State in the views of
Hobbes, Locke, Rousseau, Bentham, Mills and others in our introductory Unit of this
Course. More analyses by Liberal and Marxist thinkers on State would be made in the
next Unit i.e. Unit-4 later. Over here, we would trace the ideological trajectory of the
State-the evolutionary path of the State’s postures.
The story of modern State formation owes a lot to two seminal themes which continue to
exert influence on State formation till date. They are the Greek City-State or ‘polis’ and
the Roman Republic. ‘Polis’ in its turn gave us seeds of two very powerful ideas
associated with the modern State: (i) democracy from ‘demos’ or the rule of the people or
the citizenry, and (ii) the political/politics from ‘polis’. The concept of ‘direct democracy’
owes its lineage to this locality-based concept of citizenship, which was, however,
challenged by Rome which too arose as a powerful City State. The Roman Republic
never allowed itself to be ‘democratised’; it was run by a Senate comprising the
aristocrats and the consuls (who were later on added) elected by the assemblies of the
whole people. Important to note is that the Roman citizenship was defined by law, rather
than by strict territoriality. This notion that the State power is founded in law influenced
subsequent developments associated with ‘Rule of Law’ in democratic governments.
Similarly, a systematised code of Roman Law is another major contribution to modern
State formation. Roman Law actually helped to form the distinction between ‘State’ and

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‘society’ or between the public (Ref: Republic) i.e. the State and the private i.e. with
reference to civil society. Cicero’s formulation that ‘We obey laws in order to be free’
has a distinct modernist ring. When the Romans advanced northwards, they encountered
the Germanic tribes who were essentially ‘clan’ societies. They also employed a different
conception of law. In contrast with the ‘formality’ of Roman Law, the Germanic law was
said to belong to people comprising a summary of their common customs. It was from
these roots that the English later traced the origin of their ‘Parliament’ and the English
system of common law. To recapitulate major issues and challenges of modern State:
democracy, political participation, Rule of Law, customary sources of governance, role of
Parliament etc. have their roots in the pages of ancient history of modern State.
The Evolution of the Feudal States
Roughly in the 800 AD, an attempt was made to recreate the imperial system of Rome
under the patronage of the Catholic Church. This politically unified Christian empire
consisted of a variety of counts, dukes and princes owing allegiance to the Holy Roman
Emperor who, however, was incessantly troubled by the underlying tension-ridden
system of social and economic relations. Add to this, there was the the Germanic Vassal
system where leading warriors pledged their loyalty in return for protection received. The
vast population at the base, G. Poggi (1990) observes in his classical work The State:
Its Nature, Development and Prospects, were “The objects of rule .........but never the
subjects of a political relationship”. The lord-serf relationship was the cell form of a
feudal economy; the lord-vassal relationship was the cell form of political rule. Except in
Northern France and England where monarchy was more unified and stronger, rest of the
Europe witnessed a saga of lords vying with each other operating from their small,
personal pockets.
Power became both more personal and more local in focus. As Anderson observes, in
each area there were conflicting systems of loyalty– ‘A social world of overlapping
claims and powers’. Some lords became too powerful for the feudal monarch to resist;
more often the latter composed them into his consultative bodies, which in fact were
early forms of ‘parliament’ that played an important role from the 13th century onwards.
The Feudal State thus was constantly torn by internal dissensions while, of course, the
monarchy tried to distinguish itself, and the towns and cities remained outside the
classical feudal system because of their independent charters. ‘Medieval towns’ were
islands in the sea of feudalism and the leading citizens won the right to administer
themselves as a corporate body under a Charter which they gave to themselves. The
burghers in great towns and cities of Northern Italy and Flanders turned out to be the
forerunners of the nascent bourgeois urban class of the later years. (G. Poggi, ibid.).
The main source of rival authority to the feudal aristocracy was the Church. Having
forged rival networks between and among States, it claimed spiritual authority which
provoked the monarch, the secular authority to claim and fight for supremacy. In these
circumstances were sown the seeds of modern conceptions of sovereignty. Before States
gave way to the State i.e., a unified and integrated political structure, they had to combat
their internal dissensions as much as the spiritual claims of Papacy to central authority.
Amid all these rivalries, some important political innovations can be seen there in the
field practically working e.g. the autonomous system of rule by leading citizens in
compliance of a Charter in major towns/cities. The foremost contribution of this period

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lay in the emergence and articulation of a secular authority which till date remains a
universally accepted desirable political good.
The Absolutist State
Against this medieval background of wreckage of institutions and the political order,
arose a new form of State rooted in these independent, nationally unified Renaissance
monarchies in countries like France, Spain and England. Challenges before this
Absolutist State included: absorption of weaker and small territories, application of a
more “Unitary, continuous, calculable and effective rule with its power gathered under a
single, sovereign head” (Poggi, op.cit.). Major issues confronting the Absolutist State
which, in fact, was the forerunner of the bourgeois Constitutional State (in England, at
first) included commutation of feudal dues into money rents, supplanting of feudal
military, obligations by raising standing professional armies, raising of taxes centrally
and regularly by the State etc. Through ‘Mercantilism’, the dominant economic doctrine
under Absolutism, State and crown assumed a directive role in commercial enterprises.
While territorial boundaries assumed strategic significance, ‘A formalised system of
inter-State relations’ sustained through formal diplomacy and dynastic marriage alliances
came into vogue. The State bureaucracies were expanded and the courts were raised as
‘Adjuncts of monarch’s rule’. The absolutist ruler “Ruled from his court, not through it”.
And law became not a “Framework of rule”, so much as an instrument for rule,
assimilated to the sovereign power of throne (ibid.). In the 16th century, Jean Bodin
capped this development with the doctrine of ‘Divine Right of Kings’. The principle of
partnership-in-rule between monarchy and the people, which characterised the Estates
system during the later phase of Feudalism disappeared under Absolutism. In England,
Stuart Kings’ attempts to rule and raise taxes without Parliament participating in it led to
the outbreak of the English Revolution of 1640s.
Out there in the society, sections of gentry along with the emerging commercial classes,
urban artisans and labouring classes rose in revolt against the “Claims of Absolutism,
power of the court and the rigidity of Mercantilism”. Revolts against the ancient regimes
in France precipitated the decline of Absolutist State in England and elsewhere where the
bourgeois development processes centering around the emergence of private property
occurred at an increasingly rapid pace. First, the emerging new classes achieved a
predominant presence in the civil society and later, they claimed a share in the State’s
power and rule. A new conception of State thus takes its origin from these stirring
circumstances where the power is to be shared and “The rights of the upper and middle
ranks of society to participate in power along with the ruler was guaranteed by law and
formalised in a Constitutional System”. These developments emphasising ‘Contractual’,
Liberal and Constitutional forms of rule marked the beginning of the ‘bourgeois’
revolutions and the threshold of the ‘Modern State’ (See: S. Hall, 1990).
Development of the Modern State
It is neither useful nor possible to precisely date the origins of the modern State, though
emergence of one can be indicated with the help of some the specific features
characterising the contemporary State. These features include: (i) Power is shared (as
against earlier concentrated form) (ii) Rights to participate in a government are legally
and/or Constitutionally defined, (iii) Ever-widening, inclusive representation, (iv) Secular

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central authority; and (v) Boundaries of national sovereignty are clearly defined. A State
form of this type emerged very unevenly across Europe. It was there in Britain in 18th
century though nothing like it was to be found in Germany till the end of 19th century.
Having risen in response to the struggling bourgeois classes, this State is characterised as
classical Liberal State with twin clear tasks of (a) Fighting down the rigidities of
‘Mercantilism’ and of the ancient regime; and (b) Guaranteeing the rights and liberties of
the individual. By definition, these tasks made individuals the a priori of the State and
not vice versa. Classical Liberalism made the State subject to law; no interference with
the individual liberties is permitted unless legally sanctioned. These are the circumstances
in which the doctrine of laissez-faire (let alone) originated prohibiting the State out of
economic transaction of the people.
However, the Liberal Capitalist State was not democratic. Majority of the ordinary people
were kept out of this State process though, soon after, these masses launched reform
movements in the 19th century claiming more concessions for the lower and the labouring
classes of people. The Classical Liberal State overcame this popular challenge without
undergoing any fundamental change, though it allowed to “Deepen its popular base and
its democratic contents”, as the people won series of political and civil rights. In the end,
‘democracy’ was grafted on to the Liberal State, and a ‘Liberal-democratic State’ was
thus born with contradictions congenitally built into its structure. Faced with democratic
challenges from inside, Modern States started becoming interventionist States so as to be
‘able to act and plan organically on behalf of the society as a whole’.
This move towards ‘collectivism’ took several directions, as the imperial powers fought
themselves out in their scramble for markets. Ordinarily, dominant classes supported an
interventionist State for greater national efficiency whereas the poor masses depended on
the State to reign in the industrial capitalism so that their living conditions would improve
along with assured economic equality and social justice. The inter-war years witnessed
this tumult of collectivism taking at least three directions: emergence of Communist
States, of Fascist States and later, of the Welfare State (after 1945).
The evolutionary reformist collectivism culminated in Welfare State, whereas the
revolutionary collectivism culminated in the formation of Communist States following
the Bolshevik Revolution of 1917 in Russia. These two strands of State formation spread
themselves over the globe, so much so that at one point of time, one-third of global
population were under Communist rule. Welfare State’s association with democracy went
pari passu, though the range of welfare giving varied widely from one State to another.
Broadly, however, it can be said that if the political reforms of the 19th century were the
first step of reformism in modifying the classical Liberal State, welfare was the second
installment entailing (i) widening of ‘citizenship’ to include some social and economic
rights, (ii) the end of strict laissez-faire; and (iii) massive expansion of State bureaucracy.
If the State was kept out of the individual affairs during the Classical Liberalism phase,
the reverse swing went to an extreme with the emergence of Fascist States in Italy,
Germany, Spain and Portugal. The Liberal mind remained perplexed all these years at the
dictatorships as the individual’s space of freedom shrunk and the politics of the State
became substantially directive.

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This reverse swing favouring State took yet another extreme plunge though with less
directiveness. This State process was epitomised by corporatist bargaining between State,
Capital and the organised labour, which was broadly manifest in the Labour/Social
Democratic Party rule in Europe during 1960s and 1970s (The Conservatives seldom
radically differed from this line). As Stuart Hall (op.cit.) observes: “The expansion of the
State into the whole fabric of the civil society and private life belongs par excellence to
this period.” Advocates of ‘Rational Capitalism’ wanted a big State which can only carry
advanced capitalism effectively whereas the social democrats believed that a powerful
State can always help ameliorate the adverse effects of Capitalism without, however,
destroying the system. The State actually had fewer challenges to cope with; but the
issues beleaguering this State suddenly became overwhelming as the political slogans of
‘Roll back the State’ sent the air paving the way for the advent of ‘Neo-liberal State’.
Neo-liberal State is the State of the globalisation period we are passing through and the
moot question about this State is: has it really withered away?

3.4 INTERROGATING NEO-LIBERAL STATE IN THE ERA OF

GLOBALISATION
From the mid-1980s onwards, the New Right on the global scene in general and the
political regimes of USA and UK in particular, have devised for themselves a programme
of action centrally aiming to ‘Roll back the State’. These programmes consisted of
proposals to curb State intervention, cut State bureaucracy and public expenditure, reduce
welfare, privatise State-run enterprises, arrest the trend towards collectivism, restrict the
power of the trade unions, restore competitive individualism and the doctrines of free
market Liberalism. Essentially, it represented a move to restore the ideal of classical
Liberal State, but under the conditions laid down by the advanced capitalism which is
passing off as globalisation. Hence the word Neo-liberal State.
Neo-liberalism is actually a capitalist accumulation strategy, a specific growth model
which, at the same time, comes complete with its extra-economic pre-conditions. It is a
return to the Liberalism of free market in a strategic sense: the class collaboration which
Capital sought in the wake of its downfall during the Great Depression and subsequently
realised in the form of a Welfare State is no longer acceptable. The other unique feature
of this ideology of the New Right is to undermine Nation State based capital mobilisation
with the resulting damage to the politics of the affected States. Permeable borders have
been encouraged by the transnational capital and international finance has set about re-
organising the world economy. Mobile capital is now in a position to twist the arms of
the taxing States to minimise its tax burdens though it would mean a fiscal crisis for
individual States.
The other aspects of Neo-liberalism include diverse facilitation made possible and
available by WTO and IMF to the transnationals. Concretely, it means the demands
made by these powerful global governance institutions to privatise electricity, water and
many other basic services. Part of Neo-liberalism is the marginalising of the democratic
process. Governments can no longer choose their economy freely without consulting or
upping their antennas towards IMF and WTO. Yet, another feature lies in what is called
‘Venue Shifting’ in which the relatively more democratic international institutions are

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deprived of resources and decision-making powers in favour of those where the rich
countries are decidedly more powerful. Thus, there is a shift of decision-making authority
away from the UN General Assembly towards the IMF; the World Bank and WTO have
likewise expanded their powers in comparison to the earlier GATT. Responsibility for
education, environment and health care are being shifted from the UNESCO and WHO to
the World Bank, which also has arrogated to itself the role of a political adviser to the
loanee countries.
All these global governance institutions come into the process of acting in this Neo-
liberal era only as per the terms set by the Capital under which government policy makers
can act. As W.K. Tabb (2003)has elaborated: “The way this works is that policies are
first discussed by corporate leaders in groups such as Business Roundtable in the United
States and its counterparts in Europe and Japan. Then there are meetings of the working
groups of such organisations as the Trans-Atlantic Business Dialogue, making detailed
proposals that they pass on to their national negotiators and monitoring them to be sure
they get what they ask for”.
These are the dynamics of globalisation whose forces seek to strengthen the rich
countries usually at the expense of the poor countries and the poor people in both the
worlds. What has happened to Nation State? Is it in a position to confront the gale of
globalisation? Does it mean the end of Nation State? We already know the answer from
the early propounder of this thesis Francis Fukuyama. But let us examine this thesis to
identify and articulate the new agendas for the States to fulfill in this era of globalisation.
The End of Nation State Thesis (ENT) is usually advanced for three reasons:
• Globalisation of trade and capital has undermined the economic autonomy of the
State.
• The world of States is being replaced by a world of societies. “The relics of the
world of States have been eliminated in Europe with the end of the East-West
Conflict”, observed Ernst-Otto Czempiel. In international politics, we deal now
less with States as compared to international organisations, NGOs and other non-
state actors.
• The territorial basis of political modernity is being undermined today by new
forms of economic modernity. In place of the self-contained Nation State is a
network, modeled after transnational firms, detached from territorial forms of
order and representing an open system without borders (Dittgen, 1998).
In most of the reflections on globalisation and its impact on Nation State, there is a need
to separate rhetoric from the reality and a new look to be given to the evolving agenda of
the State. For example, how does one view the perennial problem of ‘Cross-Border
Terrorism’ across Indo-Pak border, if it is a ‘Borderless World’ we are living in? As
George Simmel has pointed out, “The border is not a spatial fact with a sociological
impact, but a sociological fact that shapes spatially”. Viewed from this sociological
perspective, we can see the challenges of the State are now demanding a fresh look-
different from the conventional pre-globalisation days. For example, today’s social reality
along the borders may be less determined by the advanced nature of technology a rich
neighbour may be having as compared to the fear of mass migrations from a weak

12
neighbouring State. The northern countries are increasingly closing their borders against
refugees to curb illegal immigration. This problem is a running sore along the borders of
USA and Mexico, Germany and Poland among and several African countries. Easy
availability of deadly weapons can create a 9/11 catastrophe which has disfigured the
international power equation altogether. The recent serial bomb blasts by terrorists in
London would also have long-term repercussions on the same lines.
Similarly, despite the universal nature of human rights and the visible importance it has
acquired of late, the fact still stands that the international protection of human rights has
yet to cross the threshold of sovereignty. The individual has no direct function as a legal
entity at the level of international law. The State of which he is a citizen acts as mediary.
It is true that international organisations are recognised by International Labour
Organisation (ILO) but the Nation State still remains the most important institution for
enforcing these laws and for giving legal protection. “There is practically no democratic
method of control and no general democratic public beyond the territorial-State” (ibid.).
The economic argument for the ENT sounds the strongest though loss of functions
suffered by the borders of a Nation State gets compensated by a new set of tasks, which
have filled its agenda. In any case, a definitive form of global control is not possible in
this multitude of intricate networks which characterises the global order today. The State
as the governmental agency is often called upon to perform the role of a coordinator
between a multitude of actors participating in the negotiations. Internationally, the Nation
State is becoming a “Competition State” within the framework of a world market. It has
taken on itself the function of coordinating within the transnational negotiation system.
(Cerny, 1997). This is, however, not to minimise the importance of the stark reality of the
State losing its welfare functions and probably, through that route, a considerable
measure of its legitimacy. State intervention now is shifting increasingly from the macro-
economic to the micro-economic level and its presence is felt more at the grassroots level
either through mediation of its lower bureaucracy or the collaborating NGOs.
Another set of powerful observations focus on the institution of citizenship which, it has
been argued, is losing its meaning. Authors such as Yasemin Soysal and Saskia Sassen
have advanced the view that a variety of forms of membership not defined by national
borders are taking the place of citizenship. But as these authors have taken care to
mention, actual realisation of citizenship benefits is bound to the boundaries of the Nation
States. This also includes enjoyment of social rights independently of citizenship.
Whether it is in Europe or in the USA, “Social rights are reserved for citizens and
restricted for legal immigrants”. The Statelessness experiment of the European Union of
25 states is blatant in its breach than whatever little achievement has been registered in
the direction of unification. Virtually, there is no international law which can force entry
into a country. And on the issue of migration, Nation States defend their sovereignty with
utmost determination.
3.5 CONCLUSION
Thus, a reading of the tortuous evolutionary path the State has been through historically
should convince you that a new type of State is emerging: a State, which is growing in
the presence of competition, markets, non-state actors and a number of international
control agencies. It has become a part of the system which thrives on transnational

13
negotiations, borderless trade, information technology and network governance. We will
read more about it in the subsequent Units of this Course.
So, how do we conclude? Whichever way we may conclude, the fact remains that (i) The
Nation State does not emerge unscathed from the torrents of globalisation, and (ii) If we
choose to train our sights responsively, it is not difficult to observe the same State
saddled with a host of responsibilities, including some new ones. What the State has lost
is what Ferdinand Tonnies called Gemeinschaft i.e., a holistic character, a sense of
organic solidarity, which is beyond pragmatism and a set of given ‘tasks’.
As Philip G. Cerny (op.cit.) has observed, “If there is an increasingly paradigmatic crisis
of the State today, it concerns the erosion of this posited underlying bond, and the
demotion of the State to a mere pragmatic association for common ends – what Tonnies
called Gesellschaft and Michael Oakeshott called ‘Enterprise Association’. The ‘End-of-
Nation State’ thesis therefore is based on a narrow viewing of the role of State. This is the
outcome of a mechanical interpretation of State. As Bob Jessop (continuing further the
unfinished researches of Nicos Poulantzas on the Relative Autonomy of State Thesis) has
observed: “The State is not simply something towards which one must adopt a political
strategy, but is something (or better, a social relation) which can be fruitfully analysed as
the site, the generator and the product of strategies. Further, it is not a unitary force but
rather a specific institutional ensemble with multiple boundaries, no institutional fixity
and no pre-given formal or substantive unity........ Any substantive unity which a State
system might possess derives from specific political projects and struggles to impose
unity or coherence on that system” (Cf Pierson, op.cit.).
Taking Bob Jessop’s parameters, one can argue that a new Nation State with new
boundaries and a new set of agendas is in the making, which is what should not be
confused for “End of State”. Empirically speaking, what we are experiencing in these
days of globalisation is an accelerated intensification of transnational relations (Jessop’s
political project). A loss of autonomy has been caused to this State with the dire
implications for the society. State’s loss of autonomy however does not suggest, either
logically or empirically, loss of sovereignty. This new avatar of the Nation State (i.e. the
Neo-liberal State) is saddled with an over-increasing load of responsibilities to coordinate
among diverse domestic and foreign policy networks. We will read more on Neo-liberal
perspective in Unit 5 of this Course. On the sovereignty front, however, no viable
alternative has appeared on the global horizons; and this would delay the advent of a
Cosmopolitan Democracy or One World since cosmopolitan law is a necessary
consequence of a routine, normally functioning Constitutional State. Till then, we have to
make do with this new State, which is always open for progressive changes in response to
forces of globalisation-from-below.

3.6 KEY CONCEPTS

Bolshevik Revolution
Coup organised by Vladimir Lenin and carried out by the Bolshevik radical group of the
Russian Social Democratic Labour to overthrow the provisional government of Russia in
November 1917. It is also known as October Revolution. The Revolution was led by

14
Leon Trotsky and marked the first official communist revolution of the 20th century,
based upon the ideas of Karl Marx
www.photius.com/countries/uzbekistan/glossary
Fordist
The social institutions of mass production, collectively called Fordism.
GATT
General Agreement on Tariffs and Trade that was originally negotiated in Geneva,
Switzerland in 1947 to increase international trade by reducing tariffs and other trade
barriers. GATT provides a code of conduct for international commerce and provides a
framework for periodic multilateral trade negotiations on trade liberalisation and
expansion. A round of negotiations pertaining to free international trade and limiting
quotas and tariffs was held in Punta del Este, Urugway in 1987
www.ecifm.rdg.ac.uk/glossary.htm
Global Civil Society
It is an emerging reality, still under construction, not completely defined in its
composition and functions. It is a social expression of the awakening of an authentic
planetary culture grounded in the spiritual values and social experience of hundreds of
millions of people. Global civil society emerged as a major social force to resist an
assault on life and democracy by the institutions of corporate globalisation. Initially, the
resistance centred on World Bank, IMF and WTO, subsequently it shifted to global
corporations and financial markets. The global civil society has presented its public face
in massive demonstrations in countries around the globe. The organized expression of
these sources of socio-political energy has been also identified as ‘globalisation-from-
below’
(www.coe.int and Centre for Alternative Development Initiatives – Draft Paper).
Great Depression
It was a global economic slump that hit North America and other Industrialised areas of
the world between 1929-34. It was precipitated by the collapse of the US Stock Market
in October 1929. The term ‘depression’ denotes (in economic sense), a cyclical phase of
the economy with high unemployment of labour and capital, business consumer
pessimism, falling prices, etc.
www.lcweb2.loc.gov/frd/cs/chile/cl-glos.htm
International Monetary Fund (IMF)
Established along with the World Bank in 1946, the IMF is a specialised agency affiliated
with the United Nations and is responsible for stabilising international exchange rates and
payments. IMF tries to provide loans to its members (including industrialised and
developing countries) when they experience balance of payments difficulties. These
loans often carry conditions that require substantial internal economic adjustments by the
receipients, most of which are developing countries)
www.wcit.org/traders/glossary.htm.

15
Keynes’ Welfare Capitalism
It is an economic theory based on the ideas of John Maynard Keynes. In Keynes’s theory
general (macro-level) trends can overwhelm the micro-level behaviour of individuals.
Keynes asserted the importance of the aggregate demand for goods as the drawing factor,
especially in downturns. He argued that government policies could be used to promote
demand at macro level to fight high unemployment and deflation of the sort seen in the
1930s. Keynes’ thoughts conflict with the tenets of classical economics, supply side of
economics and Austrian school of economics.
www.en.wikipedia.org/wiki/Keynesian_economics .
Luddites
As per the Wikipedia, the Luddites or Ludds were a social movement of English workers
in the early 1800s who protested often by destroying textile machines, against the
changes produced by the Industrial revolution that they feltthreatened for their jobs. The
movement began in 1811 and was named after a probably mythical leader, Ned Ludd.
Since then, the term Luddite has been used to describe anyone opposed to technological
progress and technological change.
McDonaldisation
It is the process by which a society takes on the characteristics of a fast-food restaurant.
The term was coined by Sociologist George Ritzer. It is a reconceptualisation of
rationalisation or moving from traditional to rational modes of thought and scientific
management. Four primary components of McDonaldisation are: efficiency,
predictability, calculability and control
http://en.wikipedia.org/wiki/mcdonaldisation
Merchantilism
An economic philosophy of the 16th and 17th centuries that laid that international
commerce should primarily serve to increase a country’s financial wealth, especially of
gold and foreign currency. It stresses on the development and control of tradable goods
as a means to foster the general good or wealth of a country
www.personal.umich.edu/~alandear/glossary/m.html.
Pari passu
With equal speed or simultaneously and equally .
UNESCO
United Nations Educational, Scientific and Cultural Organisation or UNESCO is a
specialised agency of the United Nations system established in 1946. The main objective
of the organisation is to contribute to peace and security by promoting collaboration
among the nations through education, science and culture in order to further universal
respect for justice for the Rule of Law and for human rights and fundamental freedoms.
Washington Consensus
Prof. John Williamson’s expression which conveys the ideological consensus shared by
Washington headquartered government and international organisations (consisting of the

16
Government of USA, World Bank, IMF etc) as distinguished from the organisations like
UNESCO, WHO etc. headquartered elsewhere (also discussed in the Key Concepts of
Unit 1).
Word Trade Organisation (WTO)
It is a global international organisation dealing with the rules of trade between nations.
At its heart are the WTO agreements, negotiated and signed by the World’s trading
nations. The goal is to help producers of goods and services, exporters, and importers
conduct their business. The headquarters of WTO are located at Geneva, Switzerland
www.wto.org/english/docs-e/docs-e.htm

3.7 REFERENCES AND FURTHER READING

Brown, Lester, 2005, Rescuing a Planet under Stress and a Civilisation in Trouble,
Orient Longman, New Delhi.
Cerny, Phillip. G, 1997, “Paradoxes of Competition State: The Dynamics of Political
Globalisation” Government and Opposition, Spring.
Dittegen, Herbert, 1998, “World Without Borders, Reflections on the Future of the
Nation State”, Government and Opposition, London School of Economics.
Jain, Devaki, The Hindu,April 3, 2005
Reich, Robert, B, 1991, The Work of Nations: Preparing Ourselves for 21st Century
Capitalism, Knopf, New York
Fukuyama, Francis, 2004, Comments in Indian Express, July 10, 2004
Gramsci, A, 1971, Selections from the Prison Notebooks, Lawrence and Wishart,
London.
Graf, William, 1995, “The State in the Third World, Socialist Register.
Hall, Stuart, 1990, “The State in Question” in J.A. Hall, G.J. Ikenberry and G. Poggi, The
State: Its Nature, Development and Prospects, Polity Press, Cambridge.
Jessop, Bob, 1983, The Capitalist State, Martin Robertson, Oxford.
Mamdani, Mahmood, 2005, “Good Muslim, Bad Muslim: The USA, The Global War
Against Terror” (Permanent Black)-Excerpts of an interview given to The Hindu Literary
Review, January 2
Manor, James (Ed.), 1991, Rethinking Third World Politics, Longman, London.
Mann, Michael (Ed.), 1990, The Rise and Decline of the Nation State, Basils, Blackwell,
U.K.
Pierson, Christoper, 1996, The Modern State, Routetdge, London.
Patel, IG, 1995, “Equity in a Global Society”, LSE, Centenary Lecture, October 26.
Poggi, G , 1978, The Development of the Modern State, Hutchinson, London
Tabb, W.K, 2003, “Du Boi Vs Neo-Liberalism”, Analytical Monthly Review, No. 2003.

17
The Hindu, April 3, 2005
Leftwich, Adrain, 1994, “Governance, the State and the Politics of Development” in
Development and Change, Volume 25, Number 2.

3.8 ACTIVITY
1. Try to read a few recent articles or write ups in newspapers, magazines, journals
and books and pen down your viewpoints on the characteristic features of the
present Nation State.

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