Globalisation is the growing connection of economies, societies, cultures and political systems across the world, through trade, finance, technology, migration and communication. For the state, which is built on territory and sovereignty, this raises a basic question: can a political community bounded by borders still control its own affairs when markets, ideas and problems cross those borders freely?
This note examines how scholars define globalisation, the three main schools of debate about its effect on the state, and the changes in sovereignty, the economy, welfare and security. It also traces the Indian experience since the reforms of 1991. It is written for undergraduate and postgraduate students and for candidates preparing for OPSC, UPSC and UGC NET.
1. Meaning, definitions and dimensions of globalisation
The word and its use. The word globalisation came into wide use in the 1980s and 1990s, when the end of the Cold War, new communication technology and the opening of markets quickly linked distant parts of the world. Earlier forms of world connection existed, such as the Silk Route, the colonial trade of European empires and the gold-standard economy of the nineteenth century, and historians therefore debate whether globalisation is new or old. For examinations, it is enough to remember that the present phase is marked by speed, scale and the role of digital technology.
| Scholar | Understanding of globalisation |
|---|---|
| Anthony Giddens | The intensification of worldwide social relations that link distant localities in such a way that local happenings are shaped by events many miles away |
| David Held and Anthony McGrew | The widening, deepening and speeding up of worldwide interconnectedness in all aspects of contemporary social life |
| Roland Robertson | The compression of the world and the intensification of consciousness of the world as a whole |
| Malcolm Waters | A social process in which the constraints of geography on social and cultural arrangements recede |
| Joseph Stiglitz | The closer integration of the countries and peoples of the world, brought about by the reduction of costs of transportation and communication and the breaking down of barriers to flows of goods, services, capital, knowledge and people |
| Jagdish Bhagwati | The integration of national economies into the international economy through trade, investment, short-term capital flows and technology flows |
| Manfred Steger | A set of social processes that appear to transform our present social condition into one of globality |
The table above gives each scholar’s idea in plain words. Students are often asked for the exact definition, so the table below gives the well-known formulations in the authors’ own words, with the source in which each appears.
Definitions in the authors’ own words.
| Scholar and source | Definition |
|---|---|
| Anthony Giddens, The Consequences of Modernity (1990) | “the intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa” |
| David Held, Anthony McGrew, David Goldblatt and Jonathan Perraton, Global Transformations (1999) | “a process (or set of processes) which embodies a transformation in the spatial organization of social relations and transactions … generating transcontinental or interregional flows and networks of activity, interaction and the exercise of power” |
| Roland Robertson, Globalization: Social Theory and Global Culture (1992) | “the compression of the world and the intensification of consciousness of the world as a whole” |
| Malcolm Waters, Globalization (1995) | “a social process in which the constraints of geography on economic, political, social and cultural arrangements recede” |
| Joseph Stiglitz, Globalization and Its Discontents (2002) | “the closer integration of the countries and peoples of the world which has been brought about by the enormous reduction of costs of transportation and communication, and the breaking down of artificial barriers to the flows of goods, services, capital, knowledge, and (to a lesser extent) people across borders” |
| Jagdish Bhagwati, In Defense of Globalization (2004) | “integration of national economies into the international economy through trade, direct foreign investment …, short-term capital flows, international flows of workers and humanity generally, and flows of technology” |
| International Monetary Fund, World Economic Outlook (1997) | “the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions in goods and services and of international capital flows, and also through the more rapid and widespread diffusion of technology” |
These wordings are given from memory of the standard texts, and a few words or the page number may differ between editions. Please check each one against the book before using it as a quotation in a thesis, article or published page. In an examination, the sense of the definition matters more than the exact words.
Comparing the definitions. Giddens and Robertson speak of experience and consciousness, so they stress the social and cultural side. Held and his colleagues speak of flows and networks, and they include power, so their definition is political as well as social. Stiglitz, Bhagwati and the IMF speak of markets, trade and capital, so they stress the economic side. Waters focuses on geography, saying that distance matters less. A good answer should therefore combine them and say that globalisation is a multi-sided process in which distance and borders matter less for economic, social, cultural and political life.
A working definition for answers. Globalisation may be defined for examination purposes as the growing flow of goods, capital, people, technology and ideas across national borders, which links distant societies more closely and makes events in one place affect life in many others. This definition is useful because it names the flows, the result and the political question for the state.
Dimensions of globalisation. Globalisation has several dimensions that act together. The table lists them with examples.
| Dimension | Main features | Examples |
|---|---|---|
| Economic | Trade in goods and services, foreign investment, global finance, supply chains | World Trade Organization (1995); multinational corporations |
| Political | Rise of international organisations, global norms, transnational governance | United Nations, G20, climate negotiations |
| Technological | Internet, mobile phones, satellite communication, container shipping | Digital payments, remote work, social media |
| Cultural | Spread of ideas, languages, food, media and consumer goods | Cinema, music, English language, yoga abroad |
| Ecological | Environmental problems that cross borders | Climate change, ozone depletion, pandemics |
| Social | Migration, diaspora networks, global civil society | Indian diaspora, international NGOs |
Agents of globalisation. The main agents are states that negotiate trade and investment rules, international institutions such as the World Bank, the International Monetary Fund and the World Trade Organization, multinational firms, financial markets, and transnational civil society, including human rights and environmental groups. The central question of this note is how the state, which is one of these agents, is itself changed by the process it helps to create.
Phases of globalisation. Historians divide the process into phases, and the table gives a simple scheme useful for answers.
| Phase | Period | Main features |
|---|---|---|
| Early or pre-modern links | Before 1500 | Silk Route, Indian Ocean trade, spread of religions such as Buddhism and Islam |
| Colonial and mercantile phase | 1500 to 1800 | European voyages, Atlantic and Asian trade, trading companies such as the East India Company |
| First modern wave | 1800 to 1914 | Steamships, telegraph, railways, gold standard, large migration, empires |
| Retreat | 1914 to 1945 | World wars, depression, tariffs, capital controls |
| Managed openness | 1945 to 1980 | Bretton Woods system, GATT, United Nations, decolonisation, Cold War blocs |
| Contemporary wave | 1980 onwards | Liberalisation, end of the Soviet bloc, internet, global value chains, WTO |
| Doubts and reorientation | After 2008 | Financial crisis, Brexit, trade wars, pandemic, supply-chain security |
Why the phases matter for the state. The table shows that globalisation has advanced and retreated, which supports the sceptic argument that the process is not irreversible. It also shows that each wave has depended on state decisions, from imperial policy in the nineteenth century to trade liberalisation in the twentieth. The state has been both the maker and, at times, the victim of globalisation.
Theoretical perspectives. The main schools of international relations and political economy explain globalisation and the state in different ways.
| Perspective | View of globalisation | View of the state |
|---|---|---|
| Liberal | Trade and cooperation bring prosperity and peace; institutions reduce conflict | States cooperate through rules and organisations (Keohane, Nye) |
| Realist | Globalisation is shaped by powerful states and can be reversed when interests change | The state remains the main actor (Gilpin, Waltz) |
| Marxist and world-systems | Capitalism expands across the world and creates a core and periphery | The state serves capital, and globalisation deepens inequality (Wallerstein, Harvey) |
| Constructivist | Ideas, norms and identities shape how the process is understood | State interests are socially formed and can change (Wendt) |
| Cosmopolitan | Global problems need global institutions and rights | Sovereignty must be limited by universal norms (Held, Beck) |
| Post-colonial | Globalisation continues older patterns of Western dominance | Developing states have unequal power in making rules (Spivak, Escobar) |
Reading the perspectives. The liberal and cosmopolitan views are favourable to global institutions, the realist and Marxist views are more critical, and the constructivist view adds the role of ideas. In answers, it helps to show that the debate on the state follows from the deeper assumptions of each school.
2. The debate: three schools on globalisation and the state
Why there is a debate. Scholars agree that cross-border flows have grown, but they disagree on whether this has weakened, strengthened or only changed the state. Held and McGrew, in Global Transformations (1999), grouped the views into three schools, and this grouping is widely used in examinations. The diagram places them along a line from a greatly weakened state to a still strong state.
Reading the diagram. The hyperglobalists stand at the left end, the sceptics at the right end, and the transformationalists in the middle. The middle school is shaded because most textbooks regard it as the most balanced position.
| School | Main writers | View of the state | Evidence offered | Criticism |
|---|---|---|---|---|
| Hyperglobalist | Kenichi Ohmae (The End of the Nation State, 1995), Robert Reich | The nation-state is becoming unnatural and ineffective; global markets decide policy | Mobile capital, multinational firms, global brands | Overstates the power of markets and ignores state support for business |
| Sceptic | Paul Hirst and Grahame Thompson (Globalization in Question, 1996), Robert Gilpin | Globalisation is a myth or is exaggerated; the world economy was equally open before 1914; states remain central | Most trade is within regional blocs; states set rules and bail out banks | Underestimates the new scale of finance and technology |
| Transformationalist | Anthony Giddens, David Held, James Rosenau | The state remains important, but its powers, functions and authority are being reshaped | Rise of international law, regional organisations and non-state actors | Too general; hard to test |
Hyperglobalists. Ohmae argued that in a borderless world, the economic units that matter are regions such as Hong Kong or the Silicon Valley, and the nation-state is a nostalgic fiction. This view appeared strong in the 1990s, when many states liberalised their economies, but it lost force after the financial crisis of 2008 when governments rescued banks, and after the pandemic of 2020 when states closed borders.
Sceptics. Hirst and Thompson showed with statistics that the world economy before 1914 was in some respects as integrated as it is now, and that most trade and investment is concentrated among the United States, Europe and Japan, so it is regional more than global. They conclude that states can still regulate. The return of tariffs, sanctions, industrial policy and border controls in the twenty-first century is often cited in support of this school.
Transformationalists. Giddens and Held say that globalisation is a historically new process that changes the way states exercise power. States share authority with international institutions, regions and private bodies, a condition described as multi-level governance. This school is preferred in most syllabi because it recognises both change and continuity.
Rodrik’s trilemma. Dani Rodrik, in The Globalization Paradox (2011), argued that a country cannot have all three of deep economic integration, national sovereignty and democratic politics together. It can have at most two. If it keeps national sovereignty and deep integration, democratic choices are limited (the “golden straitjacket”); if it keeps democracy and integration, sovereignty must be pooled, as in the European Union; if it keeps democracy and sovereignty, it must limit integration. The idea is useful in explaining the political tension behind Brexit, protectionism and populism.
| Choice | Gives up | Example |
|---|---|---|
| Hyperglobalisation with national state | Democratic politics (policy dictated by markets) | Countries bound to strict loan conditions |
| Hyperglobalisation with democracy | National sovereignty (powers pooled) | European Union |
| National state with democracy | Deep global integration (controls on trade and capital) | Post-war Bretton Woods period |
The golden straitjacket. Thomas Friedman, in The Lexus and the Olive Tree (1999), used this phrase to describe the narrow policy choices open to a government that wants to attract global capital, such as low inflation, open trade and small deficits. Governments in the 1990s often found that parties of the left and right followed similar economic policy, a point used to explain convergence.
The Washington Consensus. John Williamson used this term in 1989 for a set of ten policy ideas, such as fiscal discipline, trade liberalisation, openness to foreign investment, privatisation and deregulation, which were urged on developing countries by the IMF, the World Bank and the United States Treasury. Critics, including Stiglitz, said that one model was forced on very different countries, and the later view became more careful about the need for strong institutions and social protection.
Multi-level and global governance. Rosenau and others used the word governance for the many ways in which rules are made without a world government. Decisions now come from several levels: local bodies, states, regional groups such as the European Union and ASEAN, and global bodies such as the United Nations and the WTO. The state remains the most important link in this chain, since international rules reach the citizen mainly through national law, but it no longer acts alone.
The cosmopolitan and post-national view. Held argued for cosmopolitan democracy, in which people take part in decisions at several levels, because problems like climate change affect all. Habermas, in The Postnational Constellation (2001), argued that the nation-state cannot by itself solve problems of the global economy, and that democracy must be extended beyond it. Critics, such as David Miller, reply that democratic obligations arise mainly in national communities with shared history and trust, and that world-level democracy is unrealistic.
The state and the 2008 crisis and the pandemic. Two events are often used to test the three schools. In 2008, governments of the United States and Europe gave very large sums to rescue banks, and central banks acted as lenders of last resort, which supports the view that the state is the final protector of markets. In 2020, states closed borders, controlled movement and competed for medical supplies, though they also cooperated in vaccine research. Sceptics see in these events the return of the state, and transformationalists see states acting within a dense network of global links.
3. Effects of globalisation on the state
An overview. Globalisation touches almost every function of the state. The table summarises the main areas, and the paragraphs and the list that follow explain the effects.
| Area | Pressure from globalisation | How the state responds |
|---|---|---|
| Sovereignty and law | Treaties, WTO rules and international courts limit domestic choices | Joins by consent; negotiates exceptions |
| Economy | Capital mobility and competition for investment | Tax incentives, special economic zones, regulation of finance |
| Welfare | Pressure to cut taxes and spending | Targeted welfare, social insurance, labour reforms |
| Security | Terrorism, cyber attacks, organised crime, pandemics | Intelligence sharing, regional security cooperation |
| Culture and identity | Spread of global media and consumer culture | Cultural policy, language protection, nationalism |
| Democracy | Decisions taken far from voters | Parliamentary scrutiny of treaties, referendums |
| Environment | Climate change and pollution cross borders | Climate commitments, such as the Paris Agreement (2015) |
Sovereignty. Globalisation does not abolish sovereignty in law, but it reduces the practical freedom of the state. Joining the World Trade Organization binds a state to rules on tariffs and subsidies, and a dispute settlement body can rule against it. Because the state joins by its own consent, this is often described as sovereignty exercised through agreement. The relationship between sovereignty and international rules is explained in the note on State and Sovereignty.
Economic role. In the decades after 1945, many states directed their economies through planning, state ownership and tariffs. After the 1980s, many shifted to the role of regulator and facilitator. Yet the state remains the provider of property rights, courts, infrastructure and education, which markets need, and during crises such as 2008 and 2020 it acted as lender and spender of last resort. This shows that markets depend on the state, and the state therefore remains important.
Welfare and the “race to the bottom”. Critics fear that competition for investment pushes states to cut taxes and labour protection. Evidence is mixed: some Nordic states with open economies maintain large welfare systems, which supports the view that policy choice remains. Welfare can also be a way of making open economies politically acceptable, as Rodrik argued.
Security. New threats such as terrorism, cyber attacks and pandemics are transnational, and no state can meet them alone. The attacks of 11 September 2001 and the Covid-19 pandemic led to wider cooperation, but they also led to greater border control and surveillance within states.
Culture and identity. The spread of global media and consumer culture has produced both hybrid cultures and a reaction in the form of cultural nationalism. Writers use the word glocalisation (Robertson) for the mixture of global and local elements, as when international food chains offer local dishes.
Democracy and accountability. When decisions on trade, finance and the environment are taken in international forums, voters may feel that they cannot influence them. Rodrik’s trilemma describes this tension. States try to meet it by requiring parliamentary approval of treaties, by public consultation and by referendums, as in the Brexit vote of 2016. In India, treaties are made by the executive under Article 73, and Parliament is not required to approve them unless it makes a law, which is why some writers ask for greater parliamentary scrutiny of trade agreements.
Environment and the commons. Pollution, climate change and loss of species do not stop at borders, and states have to cooperate through agreements such as the Montreal Protocol (1987), the Kyoto Protocol (1997) and the Paris Agreement (2015). The principle of common but differentiated responsibilities, accepted at the Rio Earth Summit of 1992, recognises that developed countries, which caused most past emissions, have a larger duty. India has used this principle in its negotiating position.
Migration and citizenship. Movement of people has grown, and states struggle to balance border control with the need for labour and the rights of migrants. The idea of citizenship itself is changed by dual citizenship, diaspora policies, such as the Overseas Citizenship of India scheme, and refugee law. Even so, the right to decide who may enter and stay remains a central mark of state sovereignty.
Technology and the state. The internet and digital platforms give the state new tools of administration, such as digital identity and online payments, and also new problems, such as cyber attacks, data held by foreign firms and misinformation. Writers like Castells argued that power now flows through networks, and that the state must work as a node in these networks. Questions of data governance are among the new arenas of sovereignty.
Characteristics of the changing state under globalisation.
- Shared authority. Authority is now shared with international organisations, regional blocs and private bodies, so the state is one actor among many. The European Union is the strongest example, and the WTO and IMF are others.
- Rise of the regulatory state. The state moves from owning industry to regulating it through independent regulators. In India, the Securities and Exchange Board of India (1992) and the Telecom Regulatory Authority of India (1997) are examples.
- Competition for capital. States compete to attract investment through tax incentives, infrastructure and ease of doing business. This changes policy priorities and sometimes encourages a race to relax standards.
- Network governance. Policy is made through networks of governments, firms and civil society. Global bodies such as the G20 and the Financial Stability Board set standards that states adopt.
- Transnational civil society. Non-governmental bodies such as Amnesty International, Greenpeace and Oxfam influence state policy by campaigns, and states must answer to them.
- Greater importance of international law. Treaties and rules on trade, human rights and the environment increasingly shape domestic laws. Indian courts have referred to international conventions where national law is silent, as in Vishaka v. State of Rajasthan (1997).
- Pressure on welfare and taxation. Mobile capital and competition limit taxation, which affects welfare funding. The debate on corporate tax cuts in India in 2019 illustrates this pressure.
- Technological power. Digital platforms and data flows challenge the state’s control over information and taxation. Governments respond with data protection laws, such as India’s Digital Personal Data Protection Act (2023), and regulation of platforms.
- Return of the state in crises. Financial crises and pandemics show that people look to the state for protection. States have increased their role in health, supply chains and strategic industries since 2020.
- Rise of economic nationalism. Tariffs, trade wars and calls for self-reliance, such as the Atmanirbhar Bharat campaign launched in 2020, show that states also respond to globalisation by reasserting national control.
- Unequal impact on states. Strong states shape the rules while weak states mostly follow them. Developing countries have therefore argued for fairer trade rules and a bigger voice in international institutions.
4. The Indian state and globalisation
From planning to liberalisation. After 1947, India followed a model of planned development, import substitution and a large public sector, set out in the Industrial Policy Resolution of 1956. A balance of payments crisis in 1991 led the government of P. V. Narasimha Rao, with Finance Minister Manmohan Singh, to begin economic reforms, often described by the words liberalisation, privatisation and globalisation. The table shows the main stages.
| Period | Policy | Main features |
|---|---|---|
| 1951–1990 | Planned, inward-looking economy | Five-Year Plans, licence system, high tariffs, public sector |
| 1991–2003 | Liberalisation | End of industrial licensing, lower tariffs, foreign investment opened, rupee made more flexible, SEBI strengthened |
| 1995 | Entry into WTO | India a founding member of the WTO from 1 January 1995 |
| 2004–2014 | Growth with rights-based welfare | MGNREGA (2005), Right to Information (2005), Right to Education (2009), National Food Security Act (2013) |
| 2014 onwards | Digital and self-reliance push | Make in India (2014), GST (2017), Atmanirbhar Bharat (2020), production-linked incentives |
Sovereignty and international economic institutions. India joined the WTO and accepted rules on tariffs, intellectual property (the TRIPS agreement) and subsidies. In 2005, India amended its patent law to meet TRIPS obligations, while keeping safeguards for public health in Section 3(d), which the Supreme Court explained in Novartis v. Union of India (2013). India also resists some demands: at the WTO it has defended public stockholding of food grains for farmers and the poor, which shows the state using its bargaining power.
Welfare and the state. Reforms after 1991 raised growth, but also raised questions about inequality and the position of farmers and workers. Governments responded with rights-based schemes and direct benefit transfers. The National Food Security Act (2013) and MGNREGA (2005) show that an open economy and an active welfare role can coexist, which supports Rodrik’s argument.
Federalism and globalisation. Globalisation has changed Union-state relations. States now compete for investment, and chief ministers travel abroad to seek firms, as in the investor summits held by many states. The Goods and Services Tax (2017) created a single national market and a common council in which the Union and states share decisions. The 73rd and 74th Amendments (1992) strengthened local governments at the same time that the economy was opening.
Security and foreign policy. India’s foreign policy moved from non-alignment to what is called strategic autonomy and multi-alignment, using forums such as BRICS, the Quad, G20 and the Shanghai Cooperation Organisation. India held the G20 presidency in 2023 and hosted the New Delhi summit, which reflects its larger role in global governance.
Culture and identity. The Indian diaspora, Indian cinema and the information technology industry have spread India’s influence abroad, while debates continue at home about language, tradition and foreign media. Cultural policy and the protection of heritage, for example through the Archaeological Survey of India, continue to be state functions.
Digital sovereignty. India has built digital public infrastructure such as Aadhaar and the Unified Payments Interface, and has restricted some foreign applications on grounds of security and sovereignty, as in the 2020 ban on several Chinese mobile applications under the Information Technology Act. The Digital Personal Data Protection Act (2023) regulates the use of personal data. These steps show a state seeking to use technology while keeping control over data and infrastructure.
Assessment. The Indian experience supports the transformationalist view. The state has withdrawn from some economic activity and accepted international rules, but it has also built regulators, welfare programmes and digital systems, and has used its sovereign power to bargain and to restrict. Globalisation has therefore changed the way the Indian state works without removing its central place.
Trade agreements and economic diplomacy. India has moved from a cautious position to a more active one in making trade agreements. It has signed agreements with countries and groups, such as the India-UAE Comprehensive Economic Partnership Agreement and the India-Australia Economic Cooperation and Trade Agreement, both in 2022, and it stayed out of the Regional Comprehensive Economic Partnership in 2019, on the ground that it could harm farmers and small producers. This shows the state weighing the gains from trade against domestic interests. The present status of other agreements should be checked from the Ministry of Commerce and Industry.
Odisha and globalisation. For students of Odisha, the state’s ports, such as Paradip, and its mineral and metal industries, such as steel and aluminium, link it closely to world markets. The state government has held investor conclaves, such as Make in Odisha and later Utkarsh Odisha, to attract capital, which shows how state governments compete in the global economy. The same process raises questions on displacement, forest rights and the benefits to local communities, as in the debates on the Niyamgiri hills, where the Supreme Court in 2013 asked the gram sabhas to decide on religious and community rights. These details should be checked from official state sources before publication.
Concluding evaluation of the Indian case. India’s experience shows that the state in a developing country must manage three tasks at the same time: open the economy enough to gain from trade and technology, protect the weaker sections of society, and keep room for independent decisions in foreign policy and security. Whether it succeeds is a main subject of debate among economists and political scientists, and a balanced answer should mention both the growth and the inequality that followed 1991.
5. Importance and limitations of globalisation for the state
Benefits and importance.
- Economic growth. Trade and investment widen markets and bring technology, which raises output. India’s annual growth after 1991 was higher than in the earlier decades, and its information technology exports grew strongly.
- Access to capital and technology. States can borrow, attract foreign investment and adopt new methods. Foreign direct investment in telecom, automobiles and electronics in India is an example.
- Cheaper goods and wider choice. Consumers get a larger range of goods at lower prices, which can raise living standards. Mobile phones became widely available in India within two decades of reform.
- Employment in new sectors. Services, business process outsourcing and digital work created jobs, especially for the educated young. Cities such as Bengaluru and Hyderabad grew as global service centres.
- Spread of ideas and rights. Human rights norms and information travel quickly across borders, which supports democratic movements and accountability. The Right to Information campaign and environmental activism drew on global networks.
- Cooperation on shared problems. Global problems such as climate change, disease and terrorism require joint action. Agreements like the Paris Agreement (2015) and the work of the World Health Organization depend on global cooperation.
- Greater voice for emerging states. Groups such as the G20 and BRICS allow developing countries to share in decisions. India’s hosting of the G20 in 2023 and the admission of the African Union to the G20 at the New Delhi summit show this.
- Peace through interdependence. Liberal writers hold that economic ties raise the cost of war, so that trading states are less likely to fight. The European Union is the standard example.
- Diaspora and soft power. Migrants send remittances and build links with the home country. India has been among the largest recipients of remittances in the world, and its cultural influence abroad adds to its soft power.
- Pressure for better governance. Competition for investment encourages transparent rules, efficient administration and rule of law. Ease-of-doing-business reforms in India were partly driven by this pressure.
Limitations and criticisms.
- Loss of policy freedom. Trade and investment rules and the fear of capital flight limit what governments can do. Critics call this a loss of economic sovereignty.
- Rising inequality. Gains go mainly to skilled workers and owners of capital, while others may lose. Studies of India after 1991, including those by Piketty and Chancel, found a sharp rise in the share of the top income groups.
- Job insecurity. Competition from imports and the movement of firms can destroy jobs, and informal workers have little protection. In India, nearly all workers are in the informal sector, so they have less protection against such shocks.
- Harm to farmers and small producers. Opening agriculture to world markets exposes farmers to price falls and subsidised foreign competition. This has been a main theme in India’s positions at the WTO.
- Financial instability. Free flow of capital can cause sudden crises, as in East Asia in 1997–98 and the world in 2008. Developing countries suffer when funds are suddenly withdrawn.
- Environmental damage. Faster production and transport increase emissions and use of resources. Developing and developed countries disagree on who should bear the cost, which led to the principle of common but differentiated responsibilities.
- Cultural homogenisation. Critics fear that global brands and media weaken local languages and traditions. Ritzer called this the McDonaldisation of society.
- Democratic deficit. International bodies take decisions that affect citizens who cannot vote for or against them. Protests at the WTO meeting in Seattle in 1999 expressed this concern.
- Unequal bargaining power. Strong states and large firms write the rules to suit themselves, and weaker states must accept them. Developing countries argued this during the Doha Round of WTO talks, which has not been completed.
- Backlash and nationalism. Losers from globalisation may turn to populist or nationalist movements, as in Brexit and rising protectionism. These reactions threaten the open order itself.
6. Examination guide
How this topic is asked.
| Exam level | Usual form of question | What to include |
|---|---|---|
| UG (university) | Define globalisation; explain its effect on the state | Definition, dimensions, effects on sovereignty and economy |
| PG (university) | Discuss the hyperglobalist, sceptic and transformationalist views | Three schools, writers, criticisms, evaluation |
| OPSC (Odisha) | Impact of globalisation on the Indian state; liberalisation after 1991 | Reforms, WTO, welfare, federalism, Odisha investment example |
| UPSC (Civil Services) | Has globalisation made the nation-state redundant? Rodrik’s trilemma; digital sovereignty | Balanced argument, recent developments, critical evaluation |
| UGC NET | Match writers with ideas; identify the author of a concept | Authors table below |
Practice questions.
- Define globalisation and explain its main dimensions. (UG)
- How has globalisation affected the sovereignty of the state? (UG/PG)
- Distinguish between the hyperglobalist, sceptic and transformationalist views. (PG/NET)
- Explain Rodrik’s trilemma with examples. (PG/UPSC)
- Discuss the impact of globalisation on the welfare role of the Indian state. (OPSC)
- “Globalisation has made the nation-state redundant.” Critically examine. (UPSC)
- Evaluate India’s experience of globalisation since 1991. (OPSC/UPSC)
Answer outline for question 6.
- Introduction: Define globalisation and state the claim that the nation-state is becoming redundant.
- Body point 1: Arguments for the claim: capital mobility, WTO rules, multinational firms, global governance, the golden straitjacket.
- Body point 2: Arguments against: states make and enforce rules, rescue banks, control borders, and respond with economic nationalism; sceptics’ evidence on regional trade.
- Body point 3: The middle view: transformation of the state into a regulator, partner and network node, with the Indian example of regulators, welfare and digital sovereignty.
- Conclusion: The nation-state is changed but not redundant, and it remains the main unit of democracy and law.
Sample answer (UPSC style, 150 words).
Introduction. Globalisation is the widening and deepening of connections across borders. Hyperglobalists such as Ohmae claim that it has made the nation-state redundant.
Body. Evidence for the claim includes mobile capital, WTO rules and multinational firms, which limit policy choices. Yet the same period shows the state at work: governments rescued banks in 2008, closed borders in 2020, and now use tariffs, sanctions and industrial policy. Sceptics like Hirst and Thompson note that trade is mostly regional and that states still make the rules. India shows both sides. It accepted WTO rules after 1995, but it has defended food stockholding, built regulators and welfare schemes, and regulates data and digital platforms.
Conclusion. The nation-state has been transformed, not made redundant. It shares authority with others, but it remains the main source of law, democratic choice and public protection.
Common mistakes. Candidates often (a) treat globalisation as only economic, (b) write that sovereignty has ended without discussing consent and capacity, (c) forget the sceptic and transformationalist views, (d) give no Indian examples, and (e) mix up Rodrik’s trilemma with the Mundell-Fleming trilemma of monetary policy.
Critical analysis for OPSC and UPSC. Three points deserve attention. First, the debate depends on definition: if sovereignty means legal supremacy, little has changed; if it means practical capacity, much has changed. Second, globalisation is itself a product of state decisions, such as trade agreements and deregulation, so it is wrong to see states as only its victims. Third, the events of the past decade, from Brexit to trade wars, supply-chain disruptions and the pandemic, suggest a phase sometimes called de-globalisation or “slowbalisation”, in which states reassert control over trade, technology and migration. For India, the central issue is to gain from open markets while protecting farmers, workers and strategic sectors.
Authors and books for UGC NET.
| Author | Work or idea |
|---|---|
| Anthony Giddens | The Consequences of Modernity (1990); time-space distanciation; Runaway World (2000) |
| David Held and Anthony McGrew | Global Transformations (1999); transformationalist thesis |
| Roland Robertson | Globalization: Social Theory and Global Culture (1992); glocalisation |
| Kenichi Ohmae | The Borderless World (1990); The End of the Nation State (1995) |
| Paul Hirst and Grahame Thompson | Globalization in Question (1996); sceptic view |
| Thomas Friedman | The Lexus and the Olive Tree (1999); golden straitjacket; The World Is Flat (2005) |
| Joseph Stiglitz | Globalization and Its Discontents (2002) |
| Jagdish Bhagwati | In Defense of Globalization (2004) |
| Dani Rodrik | The Globalization Paradox (2011); political trilemma |
| Immanuel Wallerstein | World-systems theory; The Modern World-System (1974) |
| Manuel Castells | The Rise of the Network Society (1996); network state |
| Saskia Sassen | Losing Control? Sovereignty in an Age of Globalization (1996) |
| Susan Strange | The Retreat of the State (1996) |
| James Rosenau | Governance without Government (1992, with Czempiel); turbulence in world politics |
| Joseph Nye | Soft power; Soft Power (2004); complex interdependence (with Keohane) |
| Robert Keohane | After Hegemony (1984); institutions and cooperation |
| Benjamin Barber | Jihad vs. McWorld (1995) |
| George Ritzer | The McDonaldization of Society (1993) |
| Arjun Appadurai | Modernity at Large (1996); “scapes” of global flows |
| Amartya Sen | Writings on globalisation and justice; Development as Freedom (1999) |
| Ulrich Beck | What Is Globalization? (2000); cosmopolitan view |
7. Key takeaways
| Point | Summary |
|---|---|
| Meaning | Widening, deepening and speeding up of worldwide interconnection (Held and McGrew; Giddens) |
| Dimensions | Economic, political, technological, cultural, ecological, social |
| Three schools | Hyperglobalist (state fading), sceptic (state strong), transformationalist (state reshaped) |
| Rodrik’s trilemma | Deep integration, national sovereignty and democracy cannot all be had together |
| Effects | Shared authority, regulatory state, pressure on welfare, new security threats, economic nationalism |
| India | Reforms of 1991, WTO membership, regulators, welfare rights, digital public infrastructure and strategic autonomy |
8. Official sources, books and editorial note
Official and academic sources for further reading. The Economic Survey and Union Budget documents (indiabudget.gov.in); the WTO website and the Agreement establishing the WTO (wto.org); the Ministry of Commerce and Industry (commerce.gov.in) and the Ministry of External Affairs (mea.gov.in); the Reserve Bank of India publications (rbi.org.in); United Nations Development Programme Human Development Reports (hdr.undp.org); eGyanKosh study material of IGNOU on globalisation and international relations; and the NCERT political science textbooks.
Twenty books for further study.
- David Held, Anthony McGrew, David Goldblatt and Jonathan Perraton, Global Transformations, Polity Press.
- Anthony Giddens, Runaway World: How Globalisation Is Reshaping Our Lives, Profile Books.
- Anthony Giddens, The Consequences of Modernity, Polity Press.
- Paul Hirst and Grahame Thompson, Globalization in Question, Polity Press.
- Kenichi Ohmae, The End of the Nation State, Free Press.
- Thomas L. Friedman, The Lexus and the Olive Tree, Farrar, Straus and Giroux.
- Joseph E. Stiglitz, Globalization and Its Discontents, W. W. Norton.
- Jagdish Bhagwati, In Defense of Globalization, Oxford University Press.
- Dani Rodrik, The Globalization Paradox, W. W. Norton.
- Saskia Sassen, Losing Control? Sovereignty in an Age of Globalization, Columbia University Press.
- Susan Strange, The Retreat of the State, Cambridge University Press.
- Manuel Castells, The Rise of the Network Society, Wiley-Blackwell.
- Arjun Appadurai, Modernity at Large, University of Minnesota Press.
- John Baylis, Steve Smith and Patricia Owens (eds.), The Globalization of World Politics, Oxford University Press.
- Jan Aart Scholte, Globalization: A Critical Introduction, Palgrave Macmillan.
- Manfred B. Steger, Globalization: A Very Short Introduction, Oxford University Press.
- Amartya Sen, Development as Freedom, Oxford University Press.
- Jagdish Bhagwati and Arvind Panagariya, Why Growth Matters, PublicAffairs.
- Bimal Jalan (ed.), The Indian Economy: Problems and Prospects, Penguin.
- Andrew Heywood, Global Politics, Palgrave Macmillan.
Editorial note. This note was prepared by the PoliPrepHub editorial team for study purposes at undergraduate, postgraduate and competitive-examination levels. Readers should check statistics, policies and dates against the official sources above before quoting them in an examination or a publication. For corrections and suggestions, please use the Contact page, and for the terms of use, please read the Disclaimer.
9. Frequently asked questions and related topics
1. What is globalisation in simple words? Globalisation is the growing connection of countries through trade, investment, technology, migration and ideas, so that events in one place affect people in many others.
2. Has globalisation ended the sovereignty of the state? No. States remain the main makers of law, but they share authority and accept limits through treaties and organisations. Most scholars say sovereignty has been transformed rather than ended.
3. What are the three schools of globalisation? The hyperglobalists say the nation-state is fading, the sceptics say globalisation is exaggerated and states remain strong, and the transformationalists say the state is being reshaped.
4. What is Rodrik’s trilemma? It says that a country cannot have deep economic integration, national sovereignty and democratic politics all at once; it can have only two of the three.
5. When did India begin globalisation? India began wide-ranging economic reforms in 1991 and became a founding member of the World Trade Organization in 1995.
6. How has globalisation affected the welfare role of the Indian state? The state reduced its role in industry but expanded rights-based welfare, such as MGNREGA and the National Food Security Act, which shows that welfare can continue in an open economy.