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Chapter 6

Chapter 6. The State Really Does Matter. Review. Concepts to Review Globalization Geographical embeddedness GPNs and TNCs Impact of 2008 financial crisis Convergence and divergence Key Words

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Chapter 6

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  1. Chapter 6 The State Really Does Matter

  2. Review • Concepts to Review • Globalization • Geographical embeddedness • GPNs and TNCs • Impact of 2008 financial crisis • Convergence and divergence • Key Words • Nation-state in globalization, varieties of capitalism, GATT/WTO, development, national culture, borders and ‘borderlessness

  3. Definition of the State • State, nation, nation-state, and nation without state • Hofstede • Four dimensions: individualism, power distance, uncertainty avoidance, ‘masculinity’ • Schwartz • Seven-dimension scale: conservatism, intellectual autonomy, affective autonomy, hierarchy, egalitarian commitment, mastery, harmony • Both studies have in common the (debatable) idea that there are identifiable traits which vary across cultures • Role of the state • Support markets • Provide physical and human infrastructure • Use globalization as means of increasing their power • Two types of macroeconomic policies: • fiscal and monetary

  4. Varieties of Capitalism • Liberal market economy • Coordinated market economy • Neo-liberal market capitalism • Social market capitalism • Developmental capitalism • Authoritarian capitalism • Neo-authoritarian capitalism • Are institutions and history inherent obstacles to convergence or will there be convergence to best practice in economic governance?

  5. The State in the Global System • Most states are mixed economies: certain sectors nationalized, others private • 1980s−2000s: deregulation/reregulation and privatization • Post-2008 government intervention begins again to stimulate growth • Trade regulation • GATT/WTO • Strategies of newly industrialized states • ISI • EOI • EPZ

  6. Strategies of States • States as competitors • Locational tournaments, competitive bidding • Porter’s argument: • Rivalries between domestic firms create pressures on firms to innovate • Role of chance and of government • States as collaborators • To achieve specific economic and welfare goals • Regional trade agreements: • Have a number of motivations, e.g. defensive, influencing investment • Types include free trade area, customs union, common market, economic union (give examples of each) • Global activity is concentrated in mega-regions: North America, Europe and East Asia

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