Geography Reference
In-Depth Information
trade barriers in promoting growth (World Bank 2003b, 2007, 2008a), it
is generally assumed that the size, and border geography of a country is
given, at least in the short to medium term. Obviously through history
we see that, over the long term, the number and size of countries is itself
variable. Yet, while the formation and fragmentation of states is central to
the work of many historians and political scientists, outside of economic
history such issues have tended to play almost no role in modern econom-
ics, until very recently.
For the purposes of this topic, the relevance of these issues relates to
the modern-day challenges associated with fostering more appropriate
multinational coordination over governance and regulatory matters.
The power and speed of globalization forces are greater than ever and
as we have seen in this topic, modern MNEs operate according to their
own corporate objectives in a largely stateless fashion independent of
individual national political priorities. This is rather different to the
nature of globalization in previous eras where the interests of the parent
nation-state and that of the multinational organization were closely inter-
twined, irrespective of whether the context was the seventeenth century
VOC Dutch East India Company or the mid-twentieth century American
multinational manufacturing firms. In terms of monetary and investment
flows, the global transmission mechanisms mediated via multinational
banks, multinational mining companies, multinational service providers
and multinational manufacturing conglomerates, are quite simply enor-
mous, and can operate at devastating speeds. While the nature of global
capitalism in some ways remains largely unchanged over four centuries of
globalization (Ferguson 2008; Roubini and Mihm 2010), the technologi-
cal and institutional changes of the 1990s means that in the modern era of
globalization the scale of these stateless transmission mechanisms reflect
entirely different orders of magnitude to earlier eras. One outcome of this
is that under certain circumstances, these changes also require coordinated
responses on the part of nation-states of a different order of magnitude to
previous eras.
The increasing interest devoted to these issues has been spawned by
the processes of modern globalization, because such processes also ask
fundamental questions about the nature and role of the nation state. The
recent global economic shocks in the aftermath of the 2008 global financial
crisis, along with all of the many other but smaller crises (Roubini and
Mihm 2010), mean that countries must cooperate and coordinate their
macroeconomic and regulatory policies in new ways. Even the world's
largest national economy, namely that of the USA, is unable to unilaterally
influence or respond to these global shocks for three reasons. First, modern
multinational transmission mechanisms are so powerful and rapid that
