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Interrogate the Neo Liberal State in the Era of Globalization.

Interrogate the Neo Liberal State in the Era of Globalization.


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In 1980s and early 1990s, due to challenges of globalization, international competitiveness and technological advancements, remarkable changes took place in public sector management practices. This occurred mainly in advanced economies like the USA and the UK.

Several programs were initiated to cut down over-sized and inefficient bureaucracy and reduce the financial burden of administrative machinery on the state exchequer. The focus was on reducing the interference of the government in the economy with highlight on a market-based ideology that stressed on importing ideas generated in private sector settings within public sector organizations. This represented a paradigm shift towards neo-liberal perspective of the state.


In reality, Neo-liberalism is a capitalist accumulation strategy. It is a model which aims at growth along with free market regulation. Neo-liberalism also includes diverse facilitation made possible and available by the World Trade Organization (WTO) and the International Monetary Fund (IMF) to the transnational organizations. These global financial institutions demanded the privatization of basic facilities such as electricity, water and others. These organizations also influenced a government’s decisions in directing and guiding their economies.

The democratic process has been narrowed down under Neo-liberalism because governments have to consult IMF and WTO to choose their economies. In another aspect, called ‘venue shifting’ that means more democratic international institutions have deprived of resources and decision-making powers in favor of those where rich countries are decidedly more powerful. This shows a shift of decision-making authority from UN general assembly towards the IMF. Even the Word Bank and WTO have more powers in comparison to earlier GATT. In-spite of this transformation, basic services like education, environment and health care have also shifted from UNESCO and WHO to the WB.

Not only this, WB has also started giving political advice to loanee countries. In Neo-liberalism era, these international governance institutions have become active as per conditions laid by the capital under which government policy makers can act. There are initiatives of globalization just to make rich countries powerful at the cost of poor countries and poor people in both worlds. Thus, the question arises, whether it is the end of nation state and the answer lies in the thesis given by Francis Fukuyama.

The end of Nation State Thesis is usually advanced for three reasons:

  • Globalization of trade and capital has undermined the economic autonomy of the state.
  • The world of societies has gained prominence rather than the world of states.
  • Territorial basis of political modernity is being undermined today by new forms of economic modernity.

The impact of globalization on nation state demands a new beginning for the evolving issues of state.

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June 13, 2019