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Discuss the role of the Neo-liberal state in the backdrop of globalization.

Discuss the role of the Neo-liberal state in the backdrop of globalization.


1 Answer

The advent of the neo-liberal state in the era of globalization has brought enormous changes in the functioning of the state. Although the neo-liberal view advocates a reduced role of the state’s administrative machinery within a state, it has witnessed an increasing role of a state’s functions when it comes to the global arena as increased globalization has led to increasing collaboration between different states in the world.

Globalization has brought nations and states closer to each other through increasing cooperation in trade, commerce, finance, entertainment and other streams. As more and more states are becoming interlinked, the role of each state has actually increased. Although this may seem opposite to the neo-liberal view of the state, it is important to understand how the states role has increased in the globalized world. One important Way is by representing the interests of the state in various global trade and finance bodies like the World Bank, GATT, IMF and WTO amongst others. To safeguard the interests of the private sector and its markets whether domestic or international, a state assumes an active rote in this regard in the global arena.


Thus, globalization has actually led to the state playing an active role when it comes to promoting and safeguarding its interests globally whereas its role in its own domestic front is reduced while following a neo-liberal approach. This is more evident in the case of developed economies whereas in case of developing economies, even the neo-liberal state realizes that it cannot leave the overall welfare and development of its people in the hands of the private sector. Thus, it continues to play an important role in developing economies.

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June 13, 2019