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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?

CONCLUSION

• The expansion of the global economy has transformed the economic role of the state since the Cold War

• Small States have adopted certain strategies to enhance productivity

• Successes and failures have varied• Gives us indications of power

relations within global politics as a whole