such as Greenpeace, the International Confederation of Trade Unions, the
World Muslim Congress, the International Red Cross and the Catholic Fund
for International Development (Held et al., 1999, pp. 56–7).
Such conclusions for the nation-state are only convincing if the significance
of globalization is exaggerated and the need for the state underestimated.
The picture of globalization as a completely supranational economy is
false. The economic world is still made up of national economies in which
most companies are embedded, subject to national regulations and benefit-
ing from state power which provides stability and security in financial mar-
kets, free trade, and the protection of commercial rights, albeit within the
context of growing international trade and investment (Hirst and Thompson,
1999, pp. 270–4).
A growth in the scale of international relationships in which states are
engaged does not necessarily diminish the power of states to decide when it
is in their interests to participate in activities which have formed part of the
context of sovereign statehood for centuries (Krasner, 1995). It is wrong to
confuse the diminution of state power with a changing world with which
states have to cope. States have always had to respond to changing eco-
nomic, military, technological, ecological and cultural development. It is
also debatable how far it is anything new for states to be subjected to the
threats which ‘mobile capital’ is able to pose. Has it really required global-
ization to generate ‘powerful pressures on states to develop market-friendly
policies, including low public deficits and expenditure, especially on social
goods ... [threatening] welfare budgets, taxation levels and other govern-
ment policies’ (Held and McGrew, 2000, p. 13)? This has always been the
experience of states that have to accommodate capitalism.
Nor is economic interdependence new, and is arguably less significant for
national governments than it was in the nineteenth century. Western states
are as involved in the exploitation of their advantages and power over Third
World economies as at any time in the past, mainly through ‘global’ corpo-
rations with national roots. ‘Global governance’ is a euphemism for an
international system in which national governments, especially Western, are
the main actors. The international economy may restrict policy choices by
national governments in some policy sectors, but it expands them in others.
The demise of the state from globalization only becomes a convincing idea
if one accepts a false conception of statehood as ‘an absolute, indivisible,
territorially exclusive and zero-sum form of public power’ (Held et al.,
1999, pp. 6–9).
The continuing need for the state arises firstly from the threats to liveli-
hoods from globalization, especially in developing countries. While trade
The State in the Third World 129