Global Corporations and Economic Sovereignty
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GLOBALIZATION, INTERNATIONALIZATION AND ECONOMIC SOVEREIGNTY IN THE SMALL EUROPEAN STATES by MICHAEL G. MITCHELL (Under the Direction of Christopher S. Allen) ABSTRACT This study examines how the external pressures of globalization and internationalization have impacted the economic policy-making autonomy (or “economic sovereignty”) of eight small European states. Earlier research by Peter Katzenstein established these countries’ ability to achieve economic objectives despite exposure to internationalization. Since Katzenstein’s study, extensive literature on economic globalization has called into question the continued validity of his findings. My purpose is to test the relative impacts of globalization and internationalization to determine their effects on economic sovereignty, conceptualized here as the functionality of corporatism, social welfare outputs and popular political participation. This study finds evidence that globalization is a phenomenon distinct from internationalization, and that it has a negative impact on economic sovereignty. While these findings require further examination, they form the basis of a potentially new direction in the study of economic globalization. INDEX WORDS: Globalization, Internationalization, Small European States, Corporations, Sovereignty, Corporatism, Social Welfare, Political Economy GLOBALIZATION, INTERNATIONALIZATION AND ECONOMIC SOVEREIGNTY IN THE SMALL EUROPEAN STATES by MICHAEL G. MITCHELL BS, Georgia Institute of Technology, 1997 MA, University of Georgia, 2000 A Dissertation Submitted to the Graduate Faculty of The University of Georgia in Partial Fulfillment of the Requirements for the Degree DOCTOR OF PHILOSOPHY ATHENS, GEORGIA 2010 © 2010 Michael G. Mitchell All Rights Reserved GLOBALIZATION, INTERNATIONALIZATION AND ECONOMIC SOVEREIGNTY IN THE SMALL EUROPEAN STATES by MICHAEL G. MITCHELL Major Professor: Christopher S. Allen Committee: Markus M. L. Crepaz Maurits Van der Veen Howard J. Wiarda Electronic Version Approved: Maureen Grasso7 Dean of the Graduate School The University of Georgia August 2010 DEDICATION For Stacey from whom all good things come. iv ACKNOWLEDGEMENTS I wish to thank the members of my committee, Dr. Christopher Allen, Dr. Markus Crepaz, Dr. Maurits Van der Veen, and Dr. Howard Wiarda, for their contributions to this research. My thanks to Dr. Jeff Berejekian, Mrs. Geneva Foster and Mrs. Kathryn Johnson of the School of Public and International Affairs for their assistance as well. I particularly wish to acknowledge Mrs. Foster for her many years of guidance and infinite patience, not only with myself but with countless graduate students. My thanks to the faculty of Georgia Perimeter College for their help and encouragement over the final two years of this project, especially to Ms. Saquarius Strickland for rescuing this document on multiple occasions. This project could not have been completed without two extraordinary people: Dr. Christopher Allen and Dr. Stacey Mitchell. Chris Allen’s guidance, wisdom, example and gentle good humor have made me a better scholar, a better teacher, and a better man. Stacey Mitchell decided to visit the Baldwin Hall computer lab on July 3, 2002. I thank her for that and for everything since. v TABLE OF CONTENTS Page ACKNOWLEDGEMENTS ............................................................................................................. v LIST OF TABLES........................................................................................................................viii LIST OF FIGURES ...................................................................................................................... ix CHAPTER 1 Introduction ................................................................................................................ 1 1.1 Economic Sovereignty .................................................................................. 5 1.2 The Globalization Literature.......................................................................... 9 1.3 Core Assumptions and Methodological Parameters................................... 15 1.4 Core Hypotheses ........................................................................................ 18 1.5 Plan of the Book.......................................................................................... 22 1.6 A Note on Significance................................................................................ 26 1.7 Conclusion .................................................................................................. 27 2 Literature Review ..................................................................................................... 29 2.1 Katzenstein’s Small States ......................................................................... 31 2.2 Revisiting Katzenstein: Introduction to the Globalization Literature........... 37 2.3 Globalization: Four Questions.................................................................... 40 2.4 The Internationalization Model of Globalization .......................................... 44 2.5 The Supranationalization Model of Globalization........................................ 63 2.6 Conclusions ................................................................................................ 80 3 Theoretical Model .................................................................................................... 82 3.1 Existing Models of Globalization: A Review............................................... 84 3.2 Defining Globalization ................................................................................. 87 vi 3.3 Origin of Globalization................................................................................. 96 3.4 Agency and Globalization .........................................................................105 3.5 Impact of Globalization on the State ......................................................... 117 3.6 Conclusion ................................................................................................ 137 4 Research Design and Methodology....................................................................... 140 4.1 Case Selection.......................................................................................... 142 4.2 The Dependent Variable ...........................................................................147 4.3 Competing Models and Hypotheses ......................................................... 161 4.4 Global Leverage Index: Definition and Measurement.............................. 169 4.5 Remaining Independent and Control Variables ........................................ 183 4.6 Methodology ............................................................................................. 189 4.7 Conclusion ................................................................................................ 197 5 Data Analysis ......................................................................................................... 202 5.1 Preliminary Hypotheses ............................................................................ 203 5.2 Democratic Corporatism ...........................................................................220 5.3 Social Welfare........................................................................................... 226 5.4 Popular Political Participation ................................................................... 231 5.5 Summary of Findings ................................................................................ 233 6 Conclusions ........................................................................................................... 236 6.1 Summary of Previous Chapters ................................................................ 237 6.2 The Research Question: Summary of Findings ....................................... 239 6.3 Limitations and Shortcomings................................................................... 242 6.4 So What: The Significance of This Study................................................. 246 6.5 The Next Step: The Future of This Research Agenda............................. 248 REFERENCES ......................................................................................................................... 253 APPENDIX................................................................................................................................ 279 vii LIST OF TABLES Page Table 2-1: Four Questions About Globalization .......................................................................... 41 Table 2-2: The Internationalization Model of Globalization......................................................... 45 Table 2-3: The Supranationalization Model of Globalization ...................................................... 64 Table 3-1: Theoretical Model ...................................................................................................... 85 Table 3-2: Typology of Capitalist Enterprises ........................................................................... 108 Table 3-3: Comparing Two Corporations in Finland I ............................................................... 130 Table 3-4: Comparing Two Corporations in Finland II .............................................................. 132 Table 3-5: Leverage.................................................................................................................. 134 Table 4-1: Dependent Variables ..............................................................................................