Saturday, May 30, 2009

Impact of globalization on state system and its institutions- 2007- 15 marks

Globalization removes boundaries among the states for enonomic and socio-cultural unification of the world.In the wake of golbalization a new concept of global governance is replacing the age old closed and confined single state governance.
The state system has gone through significant changes in the globalized economy.States are opening their economies.To get benefits of barrierless trade cooperative governments, trade groups, economic blocs are being developed. Bilateral and multilateral agreements ,free trade agreements are taking place among several nations.
Today the state system is broadly being dictated by the norms of organizations like WTO and IMF.Even states have to limit their sovereign decisions due to pressure from such international forums.The states are giving up administered price mechanism to make way for market determined prices.
Even the state institutions have to change their structure and organization to get themselves acquinted with the process.Insurance,banks,education,finance,agriculture, PSUs, FDI policy all are being modified to accustomed to the changing world to become more competitive and more qualitative.
Thus in today's world the state system and its institutions are largely being dictated by market forces and shedding off the age old sovereign prejudices to get the most of the new trends.
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