Globalisation completely reconfigures the legal and political institutions of the nation state". Discuss with particular reference to the effects of globalization on sovereignty and the rule of law. Globalisation has changed differences and borders around the world where security and legality in legal and political institutions must be measured in a new context. The problem can be seen politically, economically, demographically and environmentally which cannot be regulated on a national policy. International instruments have been implemented which is a demonstration that sovereignty is of key importance.
Globalisation brings a renewed emphasis on regulatory standards and norms reflected in international standards, however not relevant in the 'hard law' of international treaties, often administered by independent national regulatory agencies with the help of international organisations. 2 It captures the internationalization of capital and financial markets with the increase in foreign trade, growing importance of multi-national corporations and the universal movement towards regional economic and political blocs.
The results is increased competition among nation states for capital, placing pressure on increased government-supported research and education outlaws for "national champions" and foreign firms considered economically useful for tax benefits and other cost effective substitutes. 3 Effect on sovereignty With the emergence of globalisation, issues of national economic and social policy, their political ability to represent and regulate, their provision of a rule of law system and guarantees of property rights and basic civil rights, many accepted states have only the trappings but not most of the effective functions of states.
The activities of some state institutions appear to make human flourishing and economic activity more rather than less difficult. In some cases, they have neither monopolized the use of force nor achieved the maintenance of basic order; in other cases, there is order, but it is not provided by the institutions of the state. This leads to the traditional sovereignty-based system of international law proved to be a travesty, in which priorities of good governance and human welfare were subordinated to a very formal commitment to ineffective structures.
Changes in sovereignty are directly impacted by globalisation. Sovereignty is being transformed as laws and the powers of governance are influenced by market and civil society changing the traditional national laws. Globalisation has brought the fragmentation and dispersion of governmental powers in both the civil society and the market – moving, in a sense, from a governmental to a governance model of sovereignty: sovereignty becomes fragmented and distributed across a range of institutions.
The practice of allowing foreign businesses to exit national legal systems in order to resolve certain conflicts has now been accepted by most countries as a legitimate way to facilitate international trade and exchange. Unsurprisingly, many countries initially resisted attempts by foreign investors to free themselves from the laws of host countries. But faced with fierce global competition for foreign capital, even those legal systems resistant to arbitration have now pretty much abandoned their traditional reservations.
6 There has been an increase of rules asserted by intergovernmental organisations which are becoming important sovereign states in rule-making and in implementation. This state dominance in rule-making organisations is compromising the roles of non-state groups. With globalisation, transnational industries and markets require more forms of transnational regulation which are different from the traditional inter-state law-making.
National laws are converging around standards established in dominant states where forms of "world law" are emerging through a world culture and regulatory competition. These features of rule-making are then reflected in implementation and enforcement in national courts, administrative agencies and even legislature to function as part of cooperative regulatory and enforcement systems to interact with intergovernmental networks "with one another and with supernational tribunals in ways that would accommodates differences but acknowledge and reinforce common values. "
Evidence of conforming with substantive legal rules across groups of states and increasing recognition of other state's national laws and institutional acts can be seen in UNCITRAL rules, normative practices of lawyers and other professionals in structuring capital market transactions, and the international arrangements of credit card agencies and global franchises7. While these might be regarded as informal social norms, they are effective in shaping behaviour, and often constrain the regulatory possibilities effectively open to states and inter-state institutions.
In contemporary practice such transnational normative phenomena are important and must not be ignored simply because the sources-based conceptual apparatus of international law struggles to deal with them. It is not realistic or adequate in all cases simply to reformulate such private norms on the basis of some consent or delegation by sovereign will. Legitimation gaps also open up as competencies and jurisdictions are shifted from the national to the supernational level.
Alongside a number of international governmental organisations and standing conferences, non-governmental organisations have also gained a good deal of influence, and are engaged in an informal regulatory network in a variety of ways. But these new forms of international cooperation lack the degree of legitimation even remotely approaching the requirements for procedures institutionalized via nation-states. 8 The net effect of such changes in the making and implementation of norms has been to shift decision-making to powerful states and non-state groups, widening the gulf between law-makers and law-takers.