State

The idea of the state has been associated with the notion of managing an area by legal order. The concept of the state has tended to be qualified by prefixes such as “welfare,” “warfare,” and “developmental,” denoting the particular organization and functions of the state's institutions.

The state combines two key elements. The first element is a historical institutional reality that is linked to the specific society, political culture, and economy within which it operates and with which it interacts. The three institutional elements of the democratic state are the executive branch, the legislative branch, and the judicial branch. The second element is a philosophical idea, wherein the various theories of the state have assumed a particular relationship between the state, society, and the individual.

The significance of the state for the process of human development has remained essentially contested by the principal ideologies of liberalism, conservatism, socialism, and Marxism. The liberal democratic notion of the state, whose central underlying assumption is that the state represents the general or the public interest, has been countered by Marxist conceptions of the state that have defined state power as an instrument of political action and societal control exercised on behalf of the private interests of the dominant capitalist class.

During the 1970s, the postwar social democratic and Keynesian consensus about an expanded role for the state into the fields of macroeconomic policy, full employment welfare provision, nationalized industries, and public services was challenged ideologically by the agenda of the New Right. Contending that the state had become overloaded, sclerotic, and a source of welfare dependency, the Reagan Administration in the United States and the Thatcher Government in the United Kingdom sought to roll back the frontiers of the state through policies of privatization, deregulation, and liberalization, and to roll forward the frontiers of the market, competition, and entrepreneurship. These neoliberal policies have subsequently become the orthodoxy shaping the institutional governance of global markets. The ubiquity of the so-called Washington Consensus has been reflected by the World Bank's narrow definition of the role of the state as the construction of institutions for the market.

In the modern era of globalization and governance, the sovereignty of the state, as the highest power in its particular territory, has been challenged by the role of new public and private actors. In the public domain, the state has seen its policy choices constrained by the pattern of multilevel governance that has arisen from the constantly changing network of regional, international, and supranational institutions that constitute contemporary global governance. In the private domain of nonstate actors, both the power of the transnational corporation operating in liberalized markets for finance, trade, and investment, and also the capacity of terrorist networks (such as Al-Qaeda) to penetrate the architecture of national security to a devastating effect have presented dramatic new threats.

As a consequence, during the 1990s, the central debate in political studies focused upon the nature and impact of globalization upon the sovereignty of the state. On the one hand, proponents of the power of globalization have claimed that nation-states have now been replaced by region-states, which provide ports of entry for entrepreneurs and corporations to global markets. On the other hand, skeptics of this thesis of the powerless state have asserted that the nation-state continues to retain a significant role in both national and international governance, not least because the nature and impact of globalization have been greatly exaggerated.

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