Abstract
This study aims at assessing the transformation undergone within the framework of globalization in terms of the tasks assumed by the state in the economy. This study, which provides a theoretical framework, discusses the roles the global economy assigns to the state and how the state changes the governing and financial tools. In this study, the transformation process concerning the role of the state in economic life is taken up as of the 1980s and the aftermath, which is named as the neoliberal globalization period. Initially, conceptual information is introduced, with the importance of the nation and welfare state put forth and the approaches recognized in literature are assessed. Then, the roles assigned to the state are explained in the transformation of the state with policies suggested for the solution of problems arising in 1970s and the problems attributed to the state caused by the failures of international entities undergone in the 2000s. Starting with the overall judgment that globalization wears the welfare and nation state out, it is possible to set forth that the state’s political, governmental and economic role and effectiveness vary at a certain level and especially the nation state is one of the most important actors of globalization and also one of the modest contributions of the study.
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Notes
- 1.
Until 1870s, in most European countries there was double metal monetary system, silver standard or banknotes unconvertible to metallic currency. Therefore most currencies were not convertible to one another and this in turn was a great obstacle for the development of foreign trade (Berend 2011: 16).
- 2.
When one looks at the share of current account balance in national income as an indication of the intensity of financial flows, one sees that the globalization wave in the second half of the 20th century has yet not reached the pre-1913 level (Yeldan 2003: 436–437).
- 3.
The internationalization of capital, to a large extent dependent on the internationalization of the state in order to preserve the continuing reorganization of social relations suitable for world scale capital accumulation. The state must ensure the necessary conditions and institutions for the internationalization of capital (Yeung 1998: 296).
- 4.
This approach foresees taking inflation under control, decrease of budget deficits, liberalization of trade and capital movements thereby opening up the country economy to the rest of the world and the establishment of macro-economic stability by policies such as the liberalization of domestic goods and factor markets within the framework of structural accommodation policies. The policy package includes the liberalization of imports, competitive foreign currency rates, tax reforms, opening up to direct investments, deregulation, protection of intellectual property rights and the prioritization of education and healthcare expenditures (Szirmai 2005: 538).
- 5.
- 6.
States will continue their relations with the market as apolitisized institutions. Since the rulers of these apparently depolitisized institutions are appointed by politicians, this situation is debatable. (Eğilmez 2009: 40).
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Kırmızıoğlu, H., Zorlu, K. (2014). An Assessment on the Changing Role of State in Globalizing World Economy. In: Dincer, H., Hacioglu, Ü. (eds) Globalization of Financial Institutions. Springer, Cham. https://doi.org/10.1007/978-3-319-01125-7_1
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