Economic Aspect of Sovereignty

IntroductionWhy use the term "sovereignty" when talking about economic issues? Can any state orsociety retain economic sovereignty, and if so, what would the consequences be? How is thisissue seen by differentauthors in differentcountries?Whathavewelearntfromthepast?Political and Economic SovereigntyMany authors see state influenceontheeconomyasakindof"sovereignty"; an extensionof the political. Sovereignty, however, remains primarily a political term, and the legitimacyof analogically extending it to the economic sphere is debatable, due to the difficulties ofcontrollinga modern economy. Raphael provides a fairly standard, contemporary view:"… the idea of the state in the modern world includes that of sovereignty, which concerns therelation of the state to other states as well as its relation to groups and individuals who are partof it. [Raphael, 1990:31] "In addition, as Quiggin points out:"Krasner (1999) usefully distinguishes four different concepts of sovereignty. Internationallegal sovereignty is the acceptance of a given state as a member of the internationalcommunity, and is, in most cases, relatively uncontroversial.

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Westphalian sovereignty isbased on the principle that one sovereign state should not interfere in the domesticarrangements of another. Interdependence sovereignty is the capacity and willingness tocontrol flows of people,goods and capital into and out of a country.Domestic sovereignty isthe capacity of a state to choose and implement policies within its territory."1Claiming economic sovereignty is questionable. Modern governments are aware of thefact that they cannot control a modern economy - they can only help to improve or reduce itsefficiency.Inextreme cases, however, a government can destroy a country's economy; andmost cases of this involve state control of the economy (i.e. examples of the 'commandeconomy' model).

1 J. Quiggin: "Globalization and Economic Sovereignty", June 2000.

Thereis, however, one similarity between political sovereignty and (attempted)economic sovereignty - both are clearly limited by international law and conventions,membership of international organizations (UN, EU, WTO, etc.), the activities ofmultinational corporations and market forces.

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