Kumayl Karimjee

05.11.10

The State

What is rescaling of governance & what implications does

it have for the state?
We live in an ever-globalising world, whereby advancements in
technology and communication have fostered in an era where the
rapid transnational movement of people, capital and goods has
become commonplace (Held et al. 1999). This apparent process of
globalisation has, in part, brought about with it important changes
with regards to capitalism, through its respatialisation, which has
occurred in the second half of the 20 th century (Scholte 2005). This,
in part, has led to the change in governance from statism to
polycentrism, resulting in a movement of governance from simply
by the nation state, to governance being rescaled and occurring
increasingly at the substate and suprastate levels (Scholte 2005).
The substate level involves power being devolved to local
authorities, whereas the suprastate level involves, power and
regulation being undertaken by large-scale authorities such as
regional blocs or transplanetary groups. Furthermore, there has also
been a growth in the number of private institutional forms that
complement the state in the governance of society (Taylor 1999).
Subsequently, rather than saying there has been a loss of
sovereignty for the state, one can say, the power of the state has
undergone a degree of transformation. This rescaling of governance
has extensive impacts on the state as a whole, by influencing
aspects of it, such as power structures, peoples livelihoods and the
physical landscape (Batterbury 2006).
According to Scholte, prior to the dominance of globalisation, the
worlds governance was dominated predominantly by the nation
state, with micro and macro regional regulation occurring on only a
very small level. This factor can be attributed to the Treaty of
Westphalia, which was signed in 1648, that deemed each state full
sovereignty over its own territory and thus foreign states with no
say in its dealings. However, due to the process of globalisation, the
ability of the state to remain the sole form of governance and
exercise complete control over its territory became increasingly
difficult. This was due to the associated aspects of globalisation,
such as improved communications, emergence of global currencies
and electronic commerce along with many more, which subverted
the statist mode of governance (Scholte 2005). As a result, this
eventually led to the Westphalian notion of sovereignty becoming
obsolescent (Rosenau 1992). This has subsequently led to a postWestphalian statehood, whereby the government in the more global
world has become multi-layered and trans-scalar (Scholte 2005).
This change in the dominant discourse of governance can be
understood by regarding the new incumbent conditions of being that
of polycentrism. Therefore, despite the statist mode of governance
coming to an end, states have not met the same fate but have
merely undergone a transformation, whereby the growth of
transplanetary connectivity has led to the diffusion of power to other

Kumayl Karimjee
05.11.10

The State

actors, both private and public, at a variety of spatial scales, and

these new forms of sovereignty filling the gaps (Harris et al. 2004).
It thus incorporates suprastate regimes, which have some autonomy
from the nation state, but also in substate regimes, where the local
authority or private enterprise also have a certain degree of
sovereignty and engage with spheres outside their own country
(Scholte 2005).
The rise of substate authorities came about due to the impracticality
and the subsequent demise of the statist mode of governance,
which was fostered by the presence of globalisation. This was the
case as the growing transplanetary relations associated with
globalisation, helped loosen the exclusive control that a state had
over its territory. Therefore, regulation diffused to other sites below
the government, resulting institutions and authorities at local levels
filled gaps in governance brought about by the end of static
governance. These new forms of governance were provided with
both decision-making and revenue-raising capabilities and thus were
no longer wholly subordinated to state. Despite local authorities
having a certain degree of authority prior to globalisation, they were
never able to extend their sphere of influence to foreign states. This
process of the devolution of power brought about by
decentralisation occurred in many countries due to the need for
them to increase the efficiency and extensiveness of public services,
whilst also making the government in power increasingly
accountable to the public (Larson & Ribot 2004). The development
of substate institutions was also financially backed in certain cases
by suprastate institutions such as the EU. A prime example of this
was in Belgium, whereby in the 1980s, the Belgium centralised
government, devolved from a national to subnational spheres,
resulting in the formation of two separate substate authorities,
namely the Flemish and the Walloon government.
The rise of these substate authorities has a number of
consequences upon the state itself. Firstly, the devolution of power
and the consequent gain of sovereignty by local authorities allow
them to follow an economic path that is tailored more specifically to
their needs. It allows these local authorities to breed what are
known as supralocal connections, which involve global links being
intensified between municipalities. This initially started at an early
stage as town twinning in the 1950s but has now moved onto some
substate authorities developing more sustaining links, such as with
regards to Quebec, which has foreign affairs departments in 17
countries worldwide. This allows for the region to improve its own
specific economic performance rather than benefiting from the
trickle-down effect of benefits from other parts of Canada. Also, in
the UK, the rescaling of governance has directly affected both the
government and the people through the devolution of collective
bargaining, from a national level to a much more localised process.

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05.11.10

The State

This has been to allow for different wages to be set in different

areas, which can be set to take into account specific factors, such as
high living costs in one region. Furthermore, by reducing the
strength of the collective bargaining, it weakens the position of the
trade unions and adds added pressure to workers to accept the local
pay deals (Swyngedouw 2004).
Fergusons concept of capital and resources hopping into specific
areas can be applied to a specific consequence of the rescaling of
governance (Sidaway 2007). This is the case in Dubai, whereby the
state has formed a variety of different zones, which each have
varying characteristics that are tailored to attract specific types of
foreign investment. For example, the Media City has, in contrast to
the rest of the state, near complete freedom of press, and Internet
City has no restrictions on its internet (Sidaway 2007). This can also
occur with regards to TNCs, who are very fickle about their location
and thus, states provide whatever benefits they can to attract these
firms. This would be very difficult to do on a national scale under
static governance, however, under polycentrism; local authorities
can do this with greater specific knowledge on a smaller scale. From
a political viewpoint, this decentralisation can improve the extent to
which the feelings of the local people are heard and taken into
account (Batterbury 2006). This was clear in Indonesia in the late
1990s, where political reforms provided those residing in rural areas
with a greater sense of power and an ability to be heard by those in
charge, as decision making has been devolved to local authorities,
who can thus impact on their lives rather than all power effectively
being held by a centralised government (McCarthy 2004).
However as Batterbury (2006) noted, the rescaling of governance
can also impinge upon the level of good governance, by placing
local authorities in excess power and providing them with too great
a degree of sovereignty. As a result, it can often proliferate the
instances of corruption, whereby local government officials are
prone to receiving bribes. Furthermore, devolution of power with
regards to specific commodities can also impinge upon good
governance. In the case of Senegal and Nepal, control of the forests
were decentralised too rapidly, and can place elites in charge of all
the resources removing the apparent democracy which should
otherwise be present (Batterbury 2006).
Globalisation has not only affected the way in which states act
internally, but also the way in which they act collectively. Whilst
devolution of power can occur downwards on a spatial scale, it can
also happen upwards. This is fostered by transplanetary connections
that bring countries together to collaborate on specific issues. This
can happen over a variety of spatial scales above the state, such
as on an interstate, macro-regional or near global scale.
Transstate connections occur where governments from different
states collaborate and share information. Although these

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The State

collaborations are not written down as treaties, they are based on a

memorandum of understanding among the officials involved.
Primary examples of such collaborations are through the police,
where police work together to solve cross-border crimes, and
environmental regulation, where regulators can cooperate on
problems that transgress the borders (Scholte 2005). These
connections can be extremely beneficial for the state as it can allow
it to solve problems such as crime more efficiently and this
cooperation with other states can reduce costs for the state itself.
However, these transgovernmental networks can also be seen as
being separating up states and can even lead to the fragmentation
of them. This is explained through the change in the nature of
governance from a Westphalian model of the nation state, in which
foreign affairs would have been handled through one department.
But in the more global world, foreign affairs would be handled
through a plethora of ministries and departments that are all
generally autonomous from each other. This can lead to
transministerial cooperation being greater than cooperation in the
state. However, whilst relationships may be weak within a country,
they may also be frayed. This is especially the case within different
ministerial departments of a government, such as between an
environment and economic minister who each have conflicting goals
and are likely to clash with their views. As a result, the cohesiveness
of the state can be seen as being weakened by the global nature of
relationships between states (Scholte 2005).
The rescaling of governance and more specifically the formation of
suprastate governance, has led to the development of
regionalisation of countries, whereby these states form alliances
based on trade as exemplified by 109 regional trade agreements
signed from 1948-94 (The Economist 1995). The EU is the most
prominent example of macro-regionalism, with it composing 25
countries. As a result of this, states have had to fulfil certain criteria
to join the bloc and from then on their continued membership is
dependent on whether they continue to fulfil these. As a result,
being part of a regional bloc can be seen as leading to a loss in
autonomy for some countries. The development of suprastate
governance has also lead to the formation of transregional
initiatives such as the OSCE, which spans central Asia, Europe and
North America and includes 55 states.
Suprastate governance can exist on an even bigger scale with
regards to transworld governance, whereby issues require a global
dimension to be tended to properly, with the battle against AIDS and
the development of air travel are prime examples of this. Another
key example of this is development, which is handled predominantly
by the IMF, which since its inception has amassed 184 members.
The aim of this institution has been to intervene in the performance
of its member economies, and thus can impinge upon a states own
sovereignty by locking states into SAPs which alter their economic

Kumayl Karimjee
05.11.10

The State

strategy to whatever the IMF proposes in exchange for a loan from

the IMF (Scholte 2005).
Globalisation has led to the blurring of the boundaries between the
state, civil society and the market (Grit 2004). Thus, despite
governance normally being associated entirely with the public
sector, there has been a rise in prominence of privatisation. Firstly,
this has occurred with regards to the regulation of firms, which has
increasingly taken place by private firms or even by the firms
themselves. Secondly, there has been a significant movement away
from state-funded welfare to it being provided by the private sector.
With regards to the regulation of firms, there have been regulatory
gaps in suprastate governance, with suprastate measures designed
to regulate TNCs often being regarded as weak, such as the UN
Global Compact. As a result there has been a movement towards
the self-regulation of firms, due to a growth in the presence of
corporate social responsibility (Zadek 2001). Nike is again a key
example with regards to this, with it trying to re-establish its
reputation capital that was heavily diminished through claims it
utilised child labour. In the late 1990s, it made reforms such as
nearly eliminating petrochemicals form its footwear and attempting
to quash instances of labour exploitation and child labour by the
suppliers, which it subcontracts in its supply chain. However, despite
the formation of codes of conduct, the framework that is imposed
still remains voluntaristic and firms which have not been exposed to
in the public arena can choose which codes they follow and which
ones they ignore (Thompson 2005). Therefore, the implications for
the state of this rescaling of governance are that consumers and the
environment may be more susceptible to being exploited due to the
lack of institutionalised regulation.
In the early 20th century, most of the social welfare was provided by
the state in the UK. But by the end of the century, there was a
significant loss in social welfare guarantees, resulting in the
opening up of economies to private market activity to fill all the
welfare gaps. This was most notable in the UK in the 1980s during
the premiership of Margaret Thatcher who effectively exacted a
reversal on state guarantees. This was common throughout Europe,
occurring in Scandinavia in the 90s after significant pressure to
retrench, so much so that no government in the 21 st century was
following a progressive wealth system (Scholte 2005). This
movement of welfare from the public to the private sphere occurred
due to governments attempting to cut costs and improve efficiency
in these sectors. This rescaling of governance has led to the
hollowing out of the welfare state and placed a greater degree of
responsibility on citizens to purchase their own welfare. Although
this can benefit the state on fiscal grounds by heavily cutting
expenditure, it is highly regressive and creates a vicious cycle of
poverty, continuously increasing inequality (Batterbury 2006). The

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05.11.10

The State

provision of water in Mexico exemplifies this point. In this scenario, a

private firm has commoditised water and costs have in fact risen
placing increased pressures on lower-wage workers, especially in
rural areas such as Sonora (Batterbury 2006).
One can see that increased transplanetary relations and greater
global connectivity have resulted in static governance being
unviable in the more global world that we now live in. therefore,
polycentrism has clearly resulted in the rescaling of governance with
a greater degree of regulation occurring at both a substate and
suprastate level. Therefore, local authorities have obtained a greater
degree of importance in the global economy, whilst suprastate
institutions also remain pivotal. Along with these, private institutions
have also flourished in the place of the less efficient and costlier
public alternatives. This change in governance has had extensive
implications, not only for the economies of states, but also for their
people and the environment. However, despite the end of the static
state and the diffusion of power away from the nation state, it still
remains of the utmost importance and the major locus of
regulation (Batterbury 2006).
Bibliography

Held, D. et al. (1999) Global Transformations

J. A. Scholte (2005) Globalization
E. Swyngedouw (2004) Globalisation or Glocalisation? Networks,
territories and rescaling
S. P. Batterbury (2006) Rescaling Governance and Impacts of
Political and Environmental Decentralisation
Ong (2006) Neoliberalism as exception: mutations in citizenship and
sovereignty
James Sidaway (2007) Enclave space: a new metageography of
development?
M. Huxley (2008) Space and government: governmentality and
geography