Comment: Impact of Globalisation on State Sovereignty. (2006)
Jean Bodin defined sovereignty as the absolute and perpetual power of a commonwealth, and the Westphalian order added supremacy within and independence without — states as hard-shelled units on a territorial map. Globalisation, for Jan Aart Scholte, is the spread of supraterritorial connections, in which location matters less and less. The collision is real, but its outcome depends on which sovereignty is meant.
The Mechanism: Deterritorialisation
- Flows outrun borders. Foreign-exchange turnover reached $9.6 trillion a day in April 2025 (BIS Triennial Survey). On Black Wednesday (1992) currency markets forced Britain, a major financial power, out of the Exchange Rate Mechanism.
- State, society and identity decouple. Capital, data and diasporas live across jurisdictions; parties campaign among citizens abroad, and communities form without regard to frontiers.
- The debate. Kenichi Ohmae (The Borderless World, 1990) announced the eclipse of borders; Paul Hirst and Grahame Thompson (Globalization in Question, 1996) replied that pre-1914 openness was comparable and firms remain nationally based; David Held and Anthony McGrew see sovereignty reconstituted — shared, layered and bargained.
Disaggregating Sovereignty
Stephen D. Krasner (Sovereignty: Organized Hypocrisy, 1999) separates four meanings, and globalisation strikes each differently.
| Meaning | What it denotes | Impact of globalisation |
|---|---|---|
| Interdependence | Control of cross-border flows | Most eroded — capital, data and emissions escape territory |
| Domestic | Effective authority within | Varies with state capacity |
| Westphalian | Exclusion of external authority | Qualified, largely by consent through treaties |
| International legal | Mutual recognition | Intact — 193 UN members |
The Dimensions
- Trade. WTO rules bind tariffs, yet the Appellate Body has been unstaffed since December 2019, and at MC14 (Yaoundé, March 2026) the e-commerce moratorium lapsed — 166 members regained the freedom to tax electronic transmissions.
- Tax. OECD Pillar Two pooled fiscal sovereignty behind a 15% floor; the January 2026 side-by-side package let US-parented groups opt out of its enforcement rules — pooling bent to the hegemon.
- Law. The International Criminal Court reached Rodrigo Duterte, surrendered in March 2025 for acts committed while the Philippines was a party.
- Digital. States are taming platforms: Australia’s news bargaining code (2021) and Canada’s Online News Act (2023) made Google pay for news; India’s Digital Personal Data Protection Rules (November 2025) allow transfers abroad to be restricted — data sovereignty reasserted.
- Environment. The EU’s Carbon Border Adjustment Mechanism, definitive from January 2026, projects one polity’s carbon price onto Indian exporters.
Assessment
- Surrendering a competence by treaty is itself an exercise of sovereignty; the European Union pools it to gain collective capacity.
- The impact is asymmetric. Georg Sørensen distinguishes post-modern states that pool voluntarily, modernising states such as India that integrate selectively, and weak post-colonial states left with formal sovereignty but little substantive control.
- The forces that squeeze states also arm them: the strong export their rules through CBAM or Pillar Two’s carve-out, and every platform regulated is a jurisdiction reclaimed.
Conclusion
Globalisation has not abolished sovereignty; it has pooled and reconfigured it. Control over flows has eroded, legal sovereignty is intact, and Westphalian autonomy is traded for influence — on terms set by power, so that rule-makers gain and rule-takers lose.