Globalization, Governance, and Democratic Participation

Globalization

There are several major developments and effects of globalization. These include (1) change in the models of production; (2) new capital markets with investment flows beyond national frontiers and control; (3) increase in multinational companies with transnational exchange; (4) regional free trade associations and other economical blocks; (5) increase in privatization and decline in the role of the state; (6) ascendancy of neoliberal concepts in economic relations; (7) worldwide promotion of democracy and human rights; and (8) emergence of transnational actors.

Whether one accepts that globalization is a radically new economic process or not, it is central to recognize its repercussions not only in the area of the economy and finance, but also in other fields of social and political life, including law. As for law, the main effect produced by globalization is an increase in legal norms at the supranational and international levels. Since the political and legal philosophy of the sixteenth to nineteenth centuries, state law has been the principal mode of social regulation. Until the second half of the twentieth century, the supremacy of the writing of Hugo Grotius (1583–1645) and Samuel Pufendorf (1632–1694) on international relations was accepted. This is no longer the case. Many new governmental and nongovernmental actors today create legal norms above the state, within the state, alongside the state, and even outside the state.

At a global level, economical liberalism in the early 1990s supported itself with strong political principles. [Page 652]The so-called Washington Consensus expresses this as a kind of Decalogue of international monetary institutions based upon a monetarist doctrine born twenty years earlier from a reaction against Keynesian economic theories. The Washington Consensus became a model of development, almost orthodoxy, until some questioned its prescriptions, notably following the crises in Asia (1997), Russia (1998), and Argentina (2000). Its principles included liberalization of commerce, deregulation, and privatization—all considered remedies to world crises. The new rules of the game for a market economy would facilitate foreign investment, privatization, and deregulation, guarantee property rights, strengthen budgetary discipline, decrease government subsidies, and implement fiscal reform in favor of capital and competitive exchange rates.

The application of such principles led many nations to begin to reform national laws to adapt them to the global market's necessities. State intervention in the economy must be limited. States sporadically wanted to introduce programs of social justice through legal regulation, but the principles dictated that they should not use law as a means to establish social justice. Friedrich von Hayek (1899–1996) had argued that globalization supposes interdependence within the whole of humankind toward the realization of an open society in which the people must accept risks. The state should not involve itself in transferring wealth from one group of citizens to another group. Authoritarian intervention, often through taxation, only stimulates disorder. In such a context, the state should play a minimal role. For example, Robert Nozick's “entitlement theory,” based upon a discussion of H.L.A. Hart's “principle of fairness,” challenges the claim for state enforcement to implement equality among people.

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