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Global Regulation and National Sovereignty Balance

Global governance is a fairly established phenomenon that was present on the world stage in its current shape for at least half a decade. However, the recent progress in scientific, social, and cultural fields dramatically increased both its significance and influence it has on the actors in the field. In most instances, it is used to achieve the maximal level of well-being across the world by narrowing the wealth gap, and funding areas may contribute to sustainability. However, there is a growing concern regarding the negative effects associated with the phenomenon, in particular, the deterioration of state sovereignty and loss of political power by local authorities. The following paper aims at determining the balance between global regulation and national sovereignty by exploring the mechanisms and approaches behind the phenomena, identifying its actual effects and drawbacks, and highlighting its influence on political power.

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Theoretical Background

To determine the balance between sovereignty and global governance, we must first provide a theoretical background for both concepts. National sovereignty is largely consistent with the traditional definition of the Westphalian doctrine, characterising sovereignty as a legal and political authority determined by the territorial borders of the states in question (Long 2012). Therefore, the government is entitled to exercise authority within a designated territory but cannot expand its influence on other nations (or territorial entities). This definition also assumes that any given state is free from external influence (Long 2012). It should be emphasised that the latter serves as one of the major points of criticism of the approach. Specifically, one popular approach holds that in the situation where the government of a sovereign state is unable to assure the well-being of its subjects it is necessary to give external entities the right to intervene (Long 2012).

Consequently, global regulation is broadly defined as an expansion of rules and mechanisms available to governing bodies for interacting and influencing each other on a global scale. These mechanisms can take the form of treaties, informal rules, customary laws, and international organisations with their statutes (Tuca 2015). Unlike the government of a sovereign state, global governance is not restricted to a single entity and not bound by a specific set of uniform rules. Instead, it consists of multiple interconnected organisations and institutions united by the complex system of principles that define their level of authority (Tuca 2015). Naturally, such setting results in the deterioration of state sovereignty in favour of achieving safety, security, and welfare on a global scale.

Current Tendencies and Major Participants

Globalisation has been historically driven primarily by the concerns with the lack of control over large-scale factors and international events, such as World Wars. Therefore, several key players emerged immediately after and as a direct consequence of the economic and social crisis following the Second World War. One notable example is the World Bank – a financial institution intended for regulation of foreign investments directed at reducing poverty and promotion of international trade that is expected to increase the level of well-being in developing countries. Another notable player that is still present in the international arena is the International Monetary Fund (IMF). This organisation utilises redistribution of resources and funding to promote international monetary cooperation and facilitate international trade (NIH n.d.). The activities of both organisations are not limited to funding and include statistical analysis of economic data, monitoring of the financial performance of participating countries, and issuing policies and recommendations that ensure reaching the desired outcomes. The latter visibly overlaps with the political sphere since the said policies may conflict with the existing vision of local governments.

It should be mentioned that the popularity and recognition attained by WB and IMF, as well as the fact that economic aspect remains among the major driving forces of globalisation, its key players are strongly associated with the financial activity. In reality, many of the participants of the process specialise in other areas. For instance, World Health Organisation (WHO), an entity associated with the UN, aims at the attainment of the highest possible level of health by the people across the world (NIH n.d.). Several other organisations, such as the Global Fund to Fight AIDS, Tuberculosis, and Malaria, the United Nations Children’s Fund (UNICEF), the Joint United Nations Programme on HIV/AIDS (UNAIDS), as well as the entities with a more focused scope, such as the Pan-American Health Organization (PAHO), incorporate similar strategies in order to target specific health issues and demographics (NIH n.d.). The process is also aided by the support of scientific research by international scientific organisations such as Coalition for Epidemic Preparedness Innovations (CEPI), CRDF Global, and American Association for the Advancement of Science (AAAS), although it must be understood that their control over political and economic factors is relatively limited in comparison to those mentioned above.

The recent developments contributed to the emergence of two factors that can be recognised as major determinants of contemporary trends in globalisation. First, the rapid development of information and communication technologies (ICT) altered the economic landscape dramatically, which resulted in the tendency of global-scale deflation (Grinin & Korotayev 2014). With the improvements in the areas of automation, many services are now able to exclude entire segments of the supply chain and drastically reduce the necessary amount of employees without compromising quality. The onset of innovative technologies such as 3D printing further de-emphasised the importance of manufacturing process and, in some cases, effectively eliminated it entirely. Finally, the popularisation and the ubiquity of the Internet opened up the way for a whole range of services that are both more attractive for customers less costly to facilitate and maintain, with shared economies being the most recognisable example. In response, the cost of many traditional services has dropped significantly, reaching a 50% decline in the price of individual products in some cases (Grinin & Korotayev 2014).

The second factor is the occurrence of the global financial crisis in 2007. At the time, it was credited by the scholars as a turning point for the United States, which was considered one of the leading political and economic authorities of the global scale. However, over time it has become clear that the opposite effect is observed – the stressful conditions that followed the crisis combined with the American energy boom and relatively lesser dependency on exports compared to major European economic powers strengthened the position of the U.S. as a global economic player. Simultaneously, the European theatre, which experienced the most dramatic setback as a result of the crisis, also saw a transition of some of its states into an active global force, with Germany being the most prominent example (Reinhart & Rogoff 2014).

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Global-Regulation as a Solution to Wealth Gap

The financial crisis mentioned above, as well as the great recession that followed, is often attributed to a growing disparity in income of the populations across the globe and, by extension, the broadening wealth gap. The beginning of the twenty-first century was characterised by severe economic inequality in most of the developed countries. While the exact numbers are difficult to pinpoint due to the discrepancies in methods used by different countries and the scarcity of the reliable data on the matter, some reports estimate that approximately fifty per cent of the world’s wealth is accumulated in the hands of one per cent of the population (Keister & Lee 2014). Such setting contributes to the economy that is vulnerable to the emergence of crises and has less capacity for recovery from the recession, which can be observed from the recent following the crisis of 2007.

Global governance such as that practised by the IMF and WB seemingly offers the most feasible solution to the problem by incorporating policies which allocate wealth to the areas associated with the greatest opportunities for development. Such approach was observed in the directions taken by developed countries in the second half of the twentieth century, with many developing states the following suit closer to the end of the millennium (Grinin & Korotayev 2014). The funding was expected to activate the hindered economic performance, with gradually more returns redirected to education, healthcare, science, social services, and other areas associated with the well-being of the population. Unfortunately, globalisation also opened up several opportunities for unfair financial and legal practices, such as the creation of faux offshore companies with the goal of concealing incomes and avoiding taxation. Several highly publicised cases of such variety fostered a negative public perception of the globalised scope of businesses and undermined the credibility of achievements gained by the presence of global governance. The distribution of wealth yielded some positive results which can be observed from the global perspective. For instance, the amount of the population that is considered poor has decreased significantly in the last decade, with a consequent rise in the low-income and middle-income groups, and a less significant increase in the upper-middle and high-income segment (Keister & Lee 2014). However, such pace is considered insufficient by many experts in the field. In addition, the onset of the recession resulted in a considerable slowdown of the progress. Therefore, while it is evident that global governance demonstrates the capacity for narrowing the wealth gap and reducing the effects of economic recession, its current potential is undermined by unfair practices and insufficient coordination.

Political Power in Globalisation

The combined effect of the attempts to the interconnectedness of different national institutions has inevitably led to the increasing footprint on the legal and political aspects of governance. In other words, the social and political issues associated with economic interventions performed at a supranational scale also necessitate the solutions on an international basis (Sand 2007). The effect of such a phenomenon can already be observed, with a steady qualitative increase of the international laws, regulations, and treaties over the last two decades (Sand 2007). In addition, the said regulations are not restricted to their initial scope and cover the areas which were previously reserved for exclusive use by the government of sovereign states. Besides, several major legislation intended to target a specific area of business, (e.g. the regulations of free movement of goods and services) has led to changes in several related fields since their introduction, such as private and public law. Essentially, the increasing role of global affairs leads to the eventual dissolution of the difference between the domains of domestic and international governance.

Reduction in Political Power

One of the outcomes of the increasing influence of international organisations is the loss of political power by the sovereign governments. Two causes of this phenomenon can be identified. First, a growing number of competencies that were previously exclusive to the authority of local governments are being transferred to the supranational organisations. In some cases, instead of an actual transfer, the shift in power occurs due to the introduction of the international negotiations and the necessity to comply with the requirements of the involved international organisations, which can be viewed as the loss of influence. Furthermore, the compliance, which may or may not be mandatory, is usually closely monitored by the controlling entities, and a failure by the local government may result in a significant public outcry, diminishing its authority and trust. In other words, global governance uses social and ethical aspects of life to leverage additional influence (and, by extension, dissolving the concentration of power locally). Finally, the diversity and multitude of the institutions involved in the process of international governance further enhance the effect, since a growing share of these entities is comprised of non-governmental organisations (NGOs), which explicitly state their lack of affiliation and the lack of political agenda.

Challenges and Advantages

It should be understood that such loss of power cannot be clearly categorised as either positive or negative. Some parties feel concerned about the disempowerment of the sovereign states and their inability to pursue the well-being of their citizens independently. The introduction of external economic influences to a previously closed system may lead to the deterioration of economic privileges resulting from the local availability of resources and unique economic activities. Next, in the setting where some of the players (e.g. the United States, Japan, and some European countries) have a clear economic advantage over the developing countries, there is a possibility of abusing power by creating challenging and unfavourable conditions, effectively creating the structure that resembles colonialism. Finally, concerns exist regarding the irresponsible policies demonstrated by multinational corporations and leading to severe adverse effects in the target countries.

However, while the latter is certainly true to some extent, it confirms, rather than discourages, the enactment of global governance. Creating and maintaining internationally recognised laws and regulations is to be viewed as a countermeasure to the unfair practices currently used by some of the international players. Since we can be certain that the expansion of business scope will only increase over time, global governance is necessary to mitigate its adverse effects. In fact, the possibility for the individual states to influence the outcomes of operations on the international scale increases the amount of control over domestic affairs by giving them the power of decision-making on an unprecedented scale. In this regard, the opportunity to participate in negotiations and coordinate the nature and amount of external influence should be considered as an additional lever for facilitating the well-being of the population and, to some degree, a manifestation of sovereignty.


Global has become an essential element of the political structure of the world. As can be seen from the information above, it poses certain threats to integrity and consistency of supranational interactions, which led to a belief of its adverse effects on political power. However, it must be acknowledged that while its current state allows for unfair practices and contains inherent flaws that may result in a perceived loss of control, it demonstrates the potential for further improvement in economic, political, and social segments of life of the stakeholders. It is, therefore, necessary to seek ways of improving it and addressing the identified shortcomings rather than focus on severing international ties in an attempt of gaining political power.

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Reference List

Grinin, L E & Korotayev, A V 2014, ‘The inflationary and deflationary trends in the global economy, or ‘the Japanese disease is spreading’, Journal of Globalization Studies, vol. 5, no. 2, pp. 152-173.

Keister, L A & Lee, H Y 2014, ‘The one percent: Top incomes and wealth in sociological research’, Social Currents, vol. 1, no. 1, pp. 13-24.

Long, Q 2012, Is globalization undermining state sovereignty?, Web.

NIH n.d., Nongovernmental organizations (NGOs) working in global health research, Web.

Reinhart, C M & Rogoff, K S 2014, ‘Recovery from financial crises: Evidence from 100 episodes’, The American Economic Review, vol. 104, no. 5, pp. 50-55.

Sand, I J 2007, ‘From national sovereignty to international and global cooperation’, Scandinavian Studies in Law, vol. 52, pp. 274-298.

Tuca, S 2015, ‘Global governance vs. national sovereignty in a globalized world’, CES Working Papers, vol. 1, pp. 193-201.

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