The Role of Local Governments in the Global Economy
NOYO OSAGHAE
1/30/2012
I HAVE NEITHER GIVEN NOR RECEIVED, NOR HAVE I TOLERATED OTHERS’ OF UNAUTHORIZED AID
THE ROLE OF LOCAL GOVERNMENTS IN A GLOBALIZED ECONOMY
Recent developments in the global economy would seem to suggest that it is in the interest of states to be integrated into the global economy, although it is also obvious that most would like to do so in the most beneficial and equitable ways. The increase in the number of states seeking membership in the World Trade Organization is perhaps evidence enough that states, whether developed or underdeveloped, democratic or non-democratic, want to play a role in the World Liberal Order. The circumstances under which states are influenced to be integrated into the global economy however vary from one state to another and can be internal or external. Amongst the internal factors are national interests, pressures from regional governments, local governments, pressure groups, and private enterprises etc. The significance of the internal factors lies in the fact that even though in most cases it is private enterprises that dominate the flow of international trade, the interests and welfare of citizens constitute the critical basis of a state’s actions in the global economy.
Further, domestic institutions affect which groups or interests have a voice in national trade policy. Also, just as domestic institutions influence political (and economic) outcomes, the international trade regime can also be a vehicle through which leaders manage domestic political pressures. It is on this basis that I propose to analyze at the micro level, the domestic institution which is closest to the people, namely, local governments, and the ways they affect and are affected by the global economy.
As a result of the recent financial crisis, it is evident that there is an increased role of the state in the global economy in democracies and authoritarian systems alike. As Burrows and Harris (2009) predict, there would be a shift
1/30/2012
I HAVE NEITHER GIVEN NOR RECEIVED, NOR HAVE I TOLERATED OTHERS’ OF UNAUTHORIZED AID
THE ROLE OF LOCAL GOVERNMENTS IN A GLOBALIZED ECONOMY
Recent developments in the global economy would seem to suggest that it is in the interest of states to be integrated into the global economy, although it is also obvious that most would like to do so in the most beneficial and equitable ways. The increase in the number of states seeking membership in the World Trade Organization is perhaps evidence enough that states, whether developed or underdeveloped, democratic or non-democratic, want to play a role in the World Liberal Order. The circumstances under which states are influenced to be integrated into the global economy however vary from one state to another and can be internal or external. Amongst the internal factors are national interests, pressures from regional governments, local governments, pressure groups, and private enterprises etc. The significance of the internal factors lies in the fact that even though in most cases it is private enterprises that dominate the flow of international trade, the interests and welfare of citizens constitute the critical basis of a state’s actions in the global economy.
Further, domestic institutions affect which groups or interests have a voice in national trade policy. Also, just as domestic institutions influence political (and economic) outcomes, the international trade regime can also be a vehicle through which leaders manage domestic political pressures. It is on this basis that I propose to analyze at the micro level, the domestic institution which is closest to the people, namely, local governments, and the ways they affect and are affected by the global economy.
As a result of the recent financial crisis, it is evident that there is an increased role of the state in the global economy in democracies and authoritarian systems alike. As Burrows and Harris (2009) predict, there would be a shift