as the new millennium approaches, a new globalization and...

Globalization andPublic Administration

Aii Farazmand, Florida Atlantic University

This article discusses globalization and its implications for public

administration. Using a political economy approach, an analysis

is made of the different meanings and perspectives of globaliza-

tion, of the causes and consequences of globalization, and of the

underpinnings or constitutive elements of globalization, a phe-

nomenon that is all-embracing with transworld and far-reaching

implications for society, governance, and public administration.

Causes of globalization are discussed, such as the economic factors

of surplus accumulation, corporate reorganization, shift of corpo-

rate power structure, global money andfinancialization, global

state and administration, domestic decline, rising human expecta-

tions, innovations, and global supranational organizations such as

the United Nations. Consequences of globalization are discussed,

including the positive impact such as continuity and persistence of

the state and public administration, but also its negative conse-

quences such as threat to democracy and community, increasing

corruption, and elite empowerment. Then a discussion is made of

the converging, hegemonic global order with a question of possible

counter-hegemonic model that might alter the dominant world

order. Einally, the article presents a number of significant impli-

cations-positive and negative-forpublic administration as a theo-

ry and practice, from both American and comparative/interna-

tional perspectives.

Introduction

As the new millennium approaches, a newcivilization is dawning. The qualitative changesof this civilization have been the subject ofmany studies. For example, Huntington(1996) speaks of the "clash of civilizations,"Fukuyama (1992) predicts "the end of historyand man," and Korbin (1996) indicates a"return back to medievalism." The hallmark ofthis change is the process of globalization,through which worldwide integration and tran-scendence take place, evoking at least two dif-ferent intellectual responses. On one handthere are those who argue that the growth oftransnational corporations, in particular becauseof their "state-indifferent" nature, and thespread of global capitalism have made stateirrelevant or even obsolescent (Ball, 1967; Nais-bitt, 1994; Ohame, 1995). Some think of it aseven the end of work (Rifkin, 1975) and ofpublic administration (Stever, 1988). Othersbelieve that global capitalism has led to the gen-eration of suprastate governing agencies that aresupplementing, if not supplanting, the territori-al nation-states (Picciotto, 1989; Cox, 1993;Korten, 1995). Still others have suggested thatthis also has eroded the sense of communityand urban power structure (Mele, 1996; Knox,1997; Korten, 1995), causing the loss of urbanjobs (Wilson, 1996). They also warn that themerging of the supranational governance agen-cies has deepened the dependency of less devel-oped countries, exacerbated their fiscal crises,and created a serious problem of governabilityin those nations (Kregel, 1998).

On the other hand, some public administra-tors and public-policy analysts have predictedthat global corporations will create a worldorder beyond nation-states (Reich, 1991), thatis, a "global village" (Garcia-Zamor and Khator,1994), a "world government" with "global man-agement" (Wilson, 1994).

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Some theorists have even attempted to develop a uni-versal, global theory of public administration (Caiden,1994). Others have vocally refuted the idea of the end ofthe state and have argued for the persistence of thenation-states with all the concomitant implications forpublic administration (Caiden, 1994; Heady, 1996;Scholte 1997).

Hirst and Thompson (1996), Zysman (1996), andBoyer and Drache (1996) have argued that globalizationhas been exaggerated and that states remain strong in thecrucial functions of governance. Some realists in theinternational relations tradition have argued that "defacto [state] sovereignty has been strengthened ratherthan weakened" (Krasner 1993, 318). Similarly, sociolo-gists and political scientists like Michael Mann (1993)and Theda Skcopol (1985), who "brought the state backin" to their disciplines during the 1980s, have maintainedtheir skepticism about the disappearance of the state fromhistory.

However, the latter group of thinkers recognizes thatglobalism has changed the nature of the administrativestate worldwide. The globalized economic structure,with its many superstructural changes, includingsupraterritorial power structures, has led to profoundimplications for public administration (Mander andColdsmith, 1996; Farazmand, 1994). Several social sci-entists have described the "retreating shifts" in the qualityand quantity of state power and authority (Strange, 1996;Graycar, 1983; Lipsky, 1984). They also have explainedthe transitional nature of the state "from the welfare stateto the competitions state," as governments attempt to"respond to, and shape and control, growing internation-al political economic interpenetration" (Cerny, 1989), to"the hallow state" (Milward, 1994) or "the corporatestate" (Farazmand, 1997a,b).

This article treats the concepts of globalism and glob-alization as phenomena produced by historical changeswithin the broader framework of continuity. These phe-nomena are expected historical, dialectical developmentsof late capitalism and are the products of the dynamicnature of rapid accumulation of surplus at the globallevel. The dynamic nature of the capitalist political econ-omy in its latest development has shifted in favor offmancial capital as opposed to the earlier productionnature of capital. It has shifted from national to globalcapitalism. Change and continuity are dialectical charac-teristics of the development of socioeconomic systems.The qualitative and quantitative changes of the last fewdecades, which began after World War II and have accel-erated since the 1970s, have altered the nature of capital-ist economies and their respective structures and organi-zations of governance and administration.

I argue that globalization is the result of several factors,including surplus accumulation capital, the state, domes-tic constraints, information technology, internationalinstitutions, and ideology. In turn, globalization has hadsignificant consequences for the capitalist state and for

Globalization. the result of several factors.

including surplus accumulation capital, the state,

domestic constraints, information technology,

international institutions, and ideology.

public administration. While the core of the state andpublic administration persists in the broader sense ofcontinuity, major changes have occurred as a conse-quence of globalization that have altered the nature andcharacter of the state and public administration from thetraditional welfare administrative state to a corporate wel-fare state. Capitalism needs the state, and the state is notindependent from capital; the elites of both work togeth-er in the globalization process because it serves both.

The discussion that follows is presented in four parts:Part one presents analytical perspectives on the conceptsof globalism and the new world order. Part two examinesthe causes of globalization. Part three discusses the con-sequences of global capitalism for the state and for publicadministration, focusing on the changing character androle of the state in general and the administrative state inparticular. In part four, a number of implications areoutlined for public administration, with suggestions forpublic administrators worldwide.

Perspectives on Globalizationand the New World Order

Although the concept of world order is not new, itbecame fashionable after World War II. With the emer-gence of the Soviet reformist leader Mikhail Gorbachev,who called for global restructuring, openness, a new wayof global thinking, peace for all, superpower cooperation,and an end to the Cold War, the concept of a new worldorder reemerged (Sedghi, 1992). Following the HelsinkiSummit in September 1990, U.S. President Ceorge Bushincreasingly used the term. Today, the concepts of thenew world order and globalism have become the subjectof serious study. But what do they actually mean?

Meaning of the New World Order and Globalization

The new world order denotes a "system of collectiveworld security where states and peoples can live in peacewith each other, ideologies aside" (Farazmand, 1994, 65)and "observe each other's borders and maintain collectivesecurity interests" (Sedghi, 1992, 62). The Persian GulfWar was arguably fought in the service of the new worldorder, and President Bush announced that the war waswaged to "stand up for what is right and condemn whatis wrong" (Trudeau, 1992, 21). However, with the fall ofthe USSR, the concept of the new world order garnered adiverse meaning and consequently became vague.

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Globalization means many things to many people.Economists consider globalization as a step toward a fullyintegrated world market. Some political scientists view itas a march away from the conventionally defined conceptof the state, with territorial sovereignty and the emer-gence of nongovernmental power players in the worldorder (Falk, 1997). Business school academics and con-sultants apply globalization to a "borderless world"(Ohmae, 1990), and others view it as a phenomenondriven only by private-sector firms, not by governments(Strange, 1996; Julius, 1997). All discussions of global-ization deal with the question of borders—"the territorialdemarcations of state jurisdictions, and associated issuesof governance, economy, identity, and community"(Scholte, 1997, 430). Five or possibly six meanings ofglobalization, as they relate to public administration, arebriefly reviewed and assessed here.

Globalization as internationalization. This notion treatsglobalization in a narrow sense as an increase in cross-border relations among organizations, that is, identitiesand communities that extend beyond national jurisdic-tional boundaries. This is nothing new: internationaltrade and other aspects of economic and political rela-tions began to grow among nations centuries ago. Thefield of international relations is an outgrowth of such adevelopment. The internationalization of public admin-istration is not new either, though it gained momentumafter World War II, when both the United States and theSoviet Union internationalized their satellite nations and,in turn, the ways in which public administration wasthought about and practiced. The rise of the UnitedNations and its affiliate agencies also promoted interna-tionalization. The birth and growth of the ComparativeAdministration Group (CAG) was the outcome of thisdevelopment (Waldo, 1980; Riggs, 1998).

Globalization as border openness. This means large-scale openness of borders achieved by removing state reg-ulatory barriers and protectionist measures, thus facilitat-ing rapid financial transactions, communications, trade,and cultural relationships (Brown, 1992). Such a border-less world would be characterized by a unified globaleconomy, global government, homogenous global cul-ture, and, by implication, a global system of publicadministration (Scholte, 1997). The Internet and othermeans of information technology have contributed tothis phenomenon beyond comprehension. Globalizationof public administration has meant "thinking globallyand acting locally." The concepts of the "new world"(Cleveland, 1993), the "global village" (Garcia-Zamorand Khator, 1994), and "global management" (Wilson,1994) seem to characterize this notion of globalizationand its implications for public administration.

This notion of globalization, however, is also limitedand deficient in that it is synonymous with liberalization.The anticameralists raised it in favor of capitalist develop-ment, and the classical liberals raised it against statism inthe nineteenth century. The liberal internationalists

raised it against the doctrine of balance of power in theearly twentieth century, and the transnationalists raised itagainst the "realist" view of nationalist and statesovereignty proclamations in international relations(Scholte, 1997), not to mention the internationalist mis-sion and claims of socialists led by the USSR.

The concept is also redundant because the liberaliza-tion of borders for a new world has been around formany decades, especially among the satellite nations ofthe West led by the United States, such as the developingcountries of Latin America, Asia, Africa, and the MiddleEast. Regulatory, labor, and administrative policies havealways been concessionary toward multinational corpora-tions operating profitable businesses in the Third World(Heeger, 1974; Bill and Springborg, 1990; LaFebber,1984; Mandel, 1983; Halliday, 1989; Dos Santos, 1996;Frank, 1996; Farazmand, 1989,1991; and Henderson,1994). Again, CAG and other international publicadministration consulting groups have been active in lessdeveloped nations, and publications on comparative anddevelopment administration have produced voluminousliterature attesting to this phenomenon.

Globalization as a process. Using a political economyview, this notion refers to globalization not as a phe-nomenon, but as a process—a continuing process of capi-tal accumulation in modern capitalism that has beengoing on for centuries. Only recently has it intensified asa result of the availability of modern technology. There-fore, this view is also not new. The beginning of thisglobalization process goes back to the nineteenth andearly twentieth centuries and was marked by the transi-tion from early (competitive) capitalism to late(monopoly) capitalism, which was boosted by the twoworld wars and produced capitalism's "golden age"(1950-1970) at the height of the Cold War. Capitalism,this view contends, is "in its innermost essence anexpanding system both internally and externally. Oncerooted, it both grows and spreads" (Sweezy, 1997, 1).Beginning with the recession of 1974-1975, three trendshave contributed to the accelerated rate of capital accu-mulation at the global level: a decreasing growth rate, the"worldwide proliferation of monopolistic (or oligopolis-tic) multinational corporation[s]," and the "financializa-tion of the capital accumulation process" (Sweezy, 1997,1-2). This view tells us little about the changing role ofthe state and public administration, especially under thenew global order.

Globalization as ideology. The ideological underpin-nings of Western capitalist democracy have acted as adriving force behind the globalization of American andWestern European liberal democracy. The wealth ofinformation—including propaganda—spread throughoutthe world by the media, the press, computers, and satel-lite communication systems offers an image of an idealpolitical system for other countries to emulate. The keywords freedom, individualism, free enterprise, and pluraldemocracy have characterized this ideological force of

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globalization (Lindblom, 1977, 1990). Important andeffective as it may have been, this normative force ofglobalization says little about the political economy of thestate and public administration.

GlobalizMtion as a phenomenon. As a cause-and-effectphenomenon in late capitalism, this perspective treatsglobalization as a cause of world capitalism's endlesseffort to reach global markets for accelerated accumula-tion of capital during the stagnant era of the 1970s.Globalization has produced significant consequences forthe state and other institutions, whose territorial bor-ders have "not so much crossed or opened as transcend-ed. Here, 'global' phenomena are those that extendacross widely dispersed locations simultaneously. Terri-torial distance and territorial borders hold limited sig-nificance in these circumstances; the globe becomes asingle 'place' in its own right" (Scholte, 1997, 431).This view of globalization is useful for understandingglobal changes in the political economy of nations. Italso considers the world as a global village and offerssignificant explanatory power. Yet, it gives limitedweight to the role of the modern state and publicadministration in causing globalization. It also tells littleabout the future role of the state, institutional elites,and public administration in such a global "place." Ittells nothing about the dialectical counterforces ofchange exerted from below.

Globalization as both a transcending phenomenon and aprocess. Sharing with and building upon the previousmeanings, this perspective considers globalization to be aprocess of accumulation by global capitalism—a constantprocess of expansion into new frontiers and opportunitiesfor increasing capital accumulation at the global level. Italso views globalization as a phenomenon caused by theprocess of global capital accumulation—a phenomenonthat has manifested its negative and positive effectsalmost everywhere. The impact has even been felt by thepowerful nations of the West and Japan, where most, ifnot all, of the transcending organizations of capital accu-mulation have homebases and are backed by their global-ly dominant states. Unlike the Third World countries,which have been plagued by the devastating effects ofglobalization by multinational and transnational corpora-tions for decades, the peoples, institutions, and commu-nities of the advanced industrial countries of the Northdid not experience the impact of globalization untilrecently.

It is this qualitative change, spurred by the new global-ization process, that has caused concerns and led to "newconsequences" for the nation-states in the dominantWest. Therefore, this perspective of globalization is rathernovel and complementary to the views noted above, inthat it adds an innovative dimension to the concept. Itconsiders the state as an active institutional player in theprocess of globalization and in dealing with its conse-quences. Other factors, such as information technology,also have been effective. Here, in the new global commu-

nity, the changing role of the administrative state andpublic administration is explored as both a cause and aneffect.

Causes of Globalization

To avoid oversimplification, the process and phe-nomenon of globalization are not treated here solely interms of advance capitalism, though that has been amajor contributing factor. Indeed, several factors havecontributed to the process of globalization, including sur-plus accumulation of corporate capital, the role of thedominant states and their bureaucracies, domestic con-straints, rising human expectations, international institu-tions, and technological innovations.

Economic factors of surplus accumulation. The mostimportant factor contributing to the globalization of cap-italism has been the driving force of surplus accumula-tion that has crossed territorial borders and transcendednational boundaries for decades. It accelerated afterWorld War II and reached a high point after the 1970s,reaching its zenith in the 1990s. Surplus (or profit) accu-mulation is the lifeblood of capitalism, which needs con-stant expansion at any cost; hence the continuity ofdynamic capitalism. Globalization has been a central fea-ture of transnational corporations (also called multina-tionals), which have for many decades reached globalmarkets and enjoyed cheap labor in less developednations. What is new is the rapidity and high rate of sur-plus accumulation, made possible by a number of mecha-nisms, as well as the transworld mobility of corporationsin a spaceless and timeless global place facilitated by thestate. Borrowing from Scholte's (1997) list of factors,these mechanisms are briefly explained below.

Global marketing. In search of new markets, cheaplabor, and unrestricted production sites, many multina-tionals and transnational corporations have decided to"go global." The movement out of the Snow Belt into theSun Belt of the antiunion South, still in progress, hasboosted surplus accumulation. But more American cor-porations found globalization a much faster and moreprofitable strategy. Global consumerism began to flour-ish, with monied consumers around the planet being able"to purchase the same goods at the same time," and coor-dinated corporate research and development activitiesproduced new economies of scale beyond the reach ofindividual corporations (Modelski, 1979). These activi-ties produced high profit rates and a significant upturnfor globalizing firms and the home states supportingthem. By 1989, the cost of corporate advertising reached$240 billion, in addition to the $380 billion spent onpackaging, design, and promotion (During, 1992, 171-72). In 1992, almost all of the 40 largest advertising firmsin Great Britain and the United States had specializeddepartments with global commercials (Sklair, 1995;Scholte, 1997, 433). By the 1990s, the corporate convic-tion that globalization "is not a luxury any more, it's a


In search of new markets, cheap labor, and

unrestricted production sites, many multinationals

and transnational corporations have decided to "go global"necessity" was expressed in the Wall Street fournal(September 26, RI).

Global production, with its reduced costs, also hasbegun to replace national production. Globalization offinance has facilitated this process and has produced"global sourcing," through which a production companycan draw its components and materials from anywhere inthe world. With the globalization of financial capital, ithas become possible "to produce a product anywhere,using resources from anywhere, by a company locatedanywhere, to be sold anywhere" (Friedman, 1994; alsocited in Naisbitt, 1994, 19; Scholte, 1997, 435). Theresult is a "global factory" in which different countrieshost different production activities, supply cheap laborand materials, and absorb all social and external costsassociated with global production.

Global commodification of new items has transformedsocial as well as economic life worldwide. Traditional tan-gible trades and industries have shifted toward "intangi-bles" (Scholte, 1997, 436) which are considered new,unique, or different, and are appealing to global con-sumers, such as folk songs and cultural and ethnic fea-tures (Mele, 1996).

Reorganization of corporate structure. The rise andexpansion of transworld corporations has resulted in ver-tical as well as horizontal organizational restructuring;this has led to a concentration of corporate power at theglobal level and the creation of a global ruling class(Korten, 1995; Brown, 1992; Brecher and Gostello,1994). The number of global corporations increasedfrom 3,500 in I960 to 40,000 in 1995, representing 40percent of the world's total commerce (UNGTAD, 1996,ix). Vertically, the number of strategic alliances betweenglobalizing enterprises have risen, and the global waves ofsuccessive mergers and acquisitions have produced a full-scale "fusion," reaching 6,000 in 1995, with an aggregatevalue of $229.4 billion {Financial Times, Jan. 20, 22). Infact, "mergermania" and "mega-merger" trends have pro-duced a globally centralized organization and a concen-trated power structure in which the largest 300 transna-tionals control 70 percent of all foreign direct investmentand almost one third of the total assets of all corporationsaround the world (Dunning, 1993, 15; Harvey, 1995,189).

This concentrated global corporate structure has alsoproduced a globalizing cadre of "managerial elites," aswell as a new level of "organizational elite" that tend toinfiuence public policy and administrative decisions vir-tually anywhere on the planet. These global elites pro-duce a global "organizational culture" (Pascale, 1984):

they play governments against governments and stagecoup d'etats or counterinsurgencies against governmentsunsympathetic to them (Parenti, 1995; Korten, 1995).

Global money and financialization. Global money hasno loyalty or attachment to any space, nation, or com-munity of people. Unlike in the past, when money andits distribution were mainly territorial and promoteddomestic communities—jobs, opportunities, commercialactivities, community values—global money has nowloosened its link to territorial finance, facilitated by thecyberspace of banking computers. In 1995, "over $9 tril-lion of the world's bank assets belonged to depositorsnon-resident in the country where the account was heldand/or were denominated in a currency issued outsidethat country" (Scholte, 1997, 439-440). Global financial-ization has been accelerated (Sweezy, 1997) with the helpof "cyberpolitiks," changing the "nature of power in theinformation age" (Rothkopf, 1998, 325).

Global state and administration. Ironically, capitalismneeds a strong state and a stable environment to prosper.It demands order and social control (Weber, 1947; Offe,1985). The globally dominant governments, particularlythe United States and its European partners, have playedan active role in promoting globalization of capitalthroughout this century. These governments have allo-cated large amounts of public expenditures to militaryand security systems to protect and promote corporatecapital accumulation in less-developed nations, as well asin domestic marketplaces. They have intervened militari-ly in many countries, replaced legitimate governments,and installed and supported some of the most repressiveand corrupt regimes in the world. Examples includeGhile in the 1970s, Iran in the 1950s, and Indonesia inthe 1960s (Parenti, 1995; Greenberg, 1986; LaFeber,1984;Hailiday, 1979).

Especially since World War II, Western governmentshave exported their ideologies, value systems, and systemsof governance and administration as ideal models byusing state-of-the-art communication systems. By con-ducting direct and proxy wars of intervention and inva-sions in Asia, Latin America, Africa, and the Middle East,American corporate interests were sought (Brown, 1992;Gill and Law, 1988; Korten, 1995; Bill and Springborg,1990) and justified as protection of American globalinterests (Ball, 1967; Hamilton, 1989; Murphy, 1988).

The efficient functioning of the market depends onstrong governments (Daly and Gobb, 1989). Capitalismneeds a strong state and bureaucracy to fiourish, andpowerRil business elites dominate the policy process andaffect its outcomes (Jones, 1983; Lindblom, 1990). Toprotect the system from periodic collapse and to providesafety nets for promoting capitalist development, marketfailures demand government intervention in the economy(Burkhead and Miner, 1971; Parenti, 1995; Korten,1995; Singer and Wildavsky, 1993). Thus, the modernstate has, through public expenditures, played a pivotalrole in the accelerated development of both capitalism


and globalization for a new world order. However, in fair- I 'T'1ness to these systems, they also have spent significant por- I 1 llC United Nations itselfhas been a majortions of their budgets to finance the welfare state I(Gilbert, 1983) to produce a balance of social and eco- I factor in Malization.nomic actions, a balance that was not acceptable to cor- *porate elites (Henry, 1995). these supranational organizations have played an effective

Domestic decline. The 1970s were plagued by the role in globalization through "structural adjustment"domestic economic downturn marked by stagfiation, requirements dictated to the poor and less-developedenergy crisis, budget deficits, political and presidential nations desperately seeking international aid (Ghan,crises, a confidence-gap crisis in both corporate and gov- 1996).ernmental elite performance (Lipset, 1987; Rosenbloom, A key feature of the structural adjustment program is1995; Henry, 1995), and general organizational decline the major reforms to the regulatory, financial, andand cutback management (Levine, 1978, 1980; Peters, administrative schemes imposed on those countries.1991). These problems were accompanied by citizen tax These reforms have included massive privatization andrevolts and the rising expectations of employee unions in promotion of the subsidiary private sector, removal ofcorporate and public sectors. These domestic upsets were trade and other barriers, tax incentives for corporatecompounded by international challenges posed to the operations, favorable labor laws allowing for unrestrainedUnited States and other Western powers by revolutions in use of cheap labor, an emphasis on export-oriented pro-Iran and Nicaragua. The net result was that the state duction and economic growth versus development, and afaced a legitimacy crisis of its own. It was unable to con- reduction of government's role in the economy (Han-tribute to accelerated capital accumulation and to per- cock, 1989; Korten, 1995; Gill and Law, 1991; Brown,form the increasingly costly social welfare function that 1992).was contributing to its "fiscal crisis" (O'Gonnor, 1973;Arrow, 1963; Heidenheimer et al., 1983, 330). These ^ . „ , , ,. .events, in turn, drove more corporations toward global- Consequences of Globalizationlzation. Globalization has facilitated connection and coordina-

Rising human expectations. The expectations of the tion among peoples, governments, and nongovernmentalgeneral populace have been rising, particularly those of organizations. Global accessibility is a giant positive stepthe employee unions; this has become evident by the toward human advancements. Yet, globalization is build-unions' demands for "property rights" in jobs, greater ing the foundation of a new civilization characterized byparticipation in management of enterprises, the emerging many paradoxes. Not all states have been affected by orrole of women in the workforce, and so on. The corpo- responded to globalization equally. This process hasrate power structure has called many of these expectations moved much faster in North America, East Asia, Westernof public- and private-sector employees unsuitable for Europe, and Australia than in the rest of Asia andtheir purpose of profitmaking. Moreover, the many law- Europe, Africa, and Latin America. Nevertheless, thesuits stemming from Equal Employment Opportunity globalization of capital, politics, administration, and cul-Act have encouraged more corporations to operate in ture has affected virtually every nation; no country hasoutside global factories with cheap labor and litde or no been left untouched. For our purposes, the following dis-legal constraints. All of this has contributed to globaliza- cussion focuses only on the consequences of globalization" ° " - for the state and for public administration. T'hese conse-

Innovations. Innovations in information technology, quences are discussed in the context of both developedcommunications and transportation systems, and the and less-developed nations and their public administra-Internet have contributed significantly to the globalization.

tion phenomenon (Welch and Wong, 1998; Savith, Gontinuity and persistence of the state. Globalization has1998). As Bill Gates (1995) of Microsoft promises, a not brought about the end of the state and its bureaucra-future "shoppers' heaven" in cyberspace seems to provide cy; nor will it result in a decline of the state in the future,a place where "all the goods for sale in the world will be The territorial state as a sociopolitical identity will con-available from home via Internet" (158). tinue to exist, as it has for several millennia. The relation-

United Nations agencies. The United Nations itself has ship between market and politics, capitalism and thebeen a major factor in globalization. Since the 1970s, its state, the private- and public-sector management haskey affiliated organizations, such as the World Bank, the been an intimate one. The relationship continues to existInternational Monetary Fund (IMF), and the World because public administration and civilization, includingTrade Organization (WTO), have been powerfiil instru- capitalist civilization, have coexisted and promoted onements in this process, which has been dominated and another (Waldo, 1980/1992) with a bureaucracy that hascontrolled primarily by the Trilaterals (the United States, also survived millennia of political and economic changessome West European governments, and the Japanese), the (Heady, 1996; Farazmand, 1998a, 1996b).key donors of international aid. In the last two decades. However, globalization has also caused major changes

•' Public Administration Review • November/December 1999, Vol. 59, No. 6

The orientation and the role of the globalizing

state have changed as a result of globalizing

corporate capitalism.in the character of the modern state (Heady, 1998;Gaiden, 1994; Esman, 1999; Scholte, 1997). At least fivesuch major changes may be discerned. First is the rein-forcement of supraterritorial governance organizationssuch as the IMF, the World Bank, and the WTO, whosedecisions and codes of conduct are binding over thenation-states affecting their administrative systems. Thesecond is the increasing degree of interdependenceamong modern states to handle territorial and supraterri-torial issues and to seek cooperation for a host of mattersof general interest, such as the alarming concern for theglobal environment and the viability of ecological sus-tainability. Here, the concepts of the global village, globalenvironment, and global citizenship are among theemerging concerns that are pressed on all states and theirpublic administration practices (Khator, 1994; Brown,1992).

The third change is that all states have gained theinformation-age advantages to process information foralmost all functions of governance and administration,both domestic and international, though less-developednations will continue to trail behind for a while. Morenoteworthy is the increased military and technologicalcapability of the dominant states, especially the UnitedStates, to globally dominate the world from both theearth and space—hence a global hegemony. The fourthchange is the growing role of governments as partnerswith and promoters of the private sectors, often at theexpense of public goods and services. Under forces ofglobalization, "the role of government is progressivelyshifting toward providing an appropriate enabling envi-ronment for private [corporate] enterprise" ( U N G T A D ,

1996, IGla22).The fifi:h, and perhaps the most important change for

public administrators, is the shifi: of the administrative statefrom a welfare state to a corporate state (Parenti, 1995;Korten, 1995) or "shadow state" (Wolch, 1990), "indiffer-ent state," "contracting state" (Bowls and Wagman, 1997;Rathgerb and Lipsky, 1993), or "entrepreneurial state"(Eisinger, 1988). Gorresponding changes in the nature ofpublic administration and management have been charac-terized by such terms as "managerialism," "political man-agement," "new public management," and the "hallow-state" (Milward, 1994) or "the corporate administrativestate" (Farazmand, 1997a, b).

Similarly, public administration will continue to per-sist as both a self-conscious enterprise and a professionalfield. Research and development in public administrationmay be negatively affected by globalization to someextent, but the continuity of the field of enquiry is intact;

all states are needed for globalizing capitalism, and allstates have public administration functions that cannotand will not be dismantled. The changing character ofpublic administration as a field of enquiry, however, ismanifest in its recent and current debate over the role ofthe state and the explorations into philosophical, institu-tional, organizational, and practical underpinnings insearch of identity (Peters, 1997; Rockman, 1997). Gorre-spondingly, the twin fields of comparative and develop-mental public administration have been filled with theshifting debate over the nature and size of the state andpublic administration in developing knowledge andbuilding theoretical generalizations (Heady, 1998; Riggs,1998). Similar changes have been observed in practicaldimensions of the state and public administration.

The orientation and the role of the globalizing statehave changed as a result of globalizing corporate capital-ism. Unlike the welfare administrative state, which tend-ed to balance corporate/market interests with social andpolitical interests for several decades during the GoldWar, the role of the new corporate welfare administrativestate features several characteristics. These include theshrinking of the stabilizing welfare state as we know it;the expansion of the security and military or warfarestate; and the expansion of the coercive bureaucracy—police, prisons, court systems, and their auxiliary func-tions such as social works, psychological networks, andcounseling. Thus, the state and bureaucracy are actuallyalive and well (Korten, 1995; Lowi, 1995; Parenti, 1995;Farazmand, 1997a,b,c). However, equity and fairnessmay have been the casualties of corporate greed and glob-alization of capital (Farazmand, 1997a,b).

Negative consequences of globalization. The negativeconsequences of globalization are many: they include thediminished or lost sovereignty of states, constraints ondemocracy, loss of community, concentration of the glob-al power structure, increased centralization of corporateand government organizational elites, and increaseddependency among less-developed nations on globalizingpowers.

Threat to state sovereignty. Sovereign statehood dependson territoriality, fixed locations, and supreme authorityover land, space, and sea (Helleiner, 1994; Scholte,1997). But the pivotal role of the state in globalizingcapitalism has, at the same time, threatened state identityby putting its "sovereignty at bay" (Vernon, 1971). Ghal-lenges to sovereignty mean a loss of unilateral ability bynation-states to exercise comprehensive macroeconomicpolicy. Many states have surrendered their national poli-cy-making ability to regional or international organiza-tions for collaborating with globalization efforts. Somegovernments have even revised their constitutions in theinterest of regional collaboration (for example, Italy, Por-tugal, and Spain in the European Gommunity, and LatinAmerican countries are considering similar actionstoward the Transamerican community). Since the 1970s,the IMF, the World Bank, and the WTO have enforced

SICA jubilee: Globalization and Public Administration 315

more authoritative measures on the monetary and fiscalpolicies of less-developed member countries. The struc-tural adjustment programs mentioned above have forcedthese countries into reforms and changes that have deep-ened their dependency on globalizing corporations andtheir dominant governments.

By 1994, the World Bank had sought to "provide$200 billion to the Third World in the next decade topromote the private sector" (Milman and Lundstedt,1994, 1667). Such international loans carry both cross-conditions and crossover conditions that deepen thefinancial, military, political, and economic dependencyon Western powers and globalizing power elites, who caneasily dictate policy choices to poor and less-developednations. Such money usually enriches the host country'spower elites at the expense of millions of people. It isalso true that most foreign aid and international loans arereturned to donor countries (Hudson, 1971). As Korten(1995) states, the "Bank-approved consultants oftenrewrite a country's trade policy, fiscal policy, civil servicerequirements, labor laws, health care arrangements, envi-ronmental regulations, energy policy, resettlementrequirements, procurement rules, and budgetary policy"(165). Hancock (1989) calls the Bank leaders the "lordsof poverty" leading global policy directions through"organizational elites" (Farazmand, 1997a,b) who executethe policy preferences of the "inner circle," global corpo-rate elites (Useem, 1984; Domhaff, 1970).

Threat to democracy and community. The rise andexpansion of globalizing capital pose a serious threat todemocratic ideas around the globe. The very fact thatglobal organizations such as the IMF, the World Bank,and the WTO, as well as a few transnational elites, pre-scribe and dictate fiscal, monetary, and other structural-adjustment policies to poor and less-developed countriesis, in a way, a negation of local democracy. People inthese nations do not and cannot exercise their humanand civil rights to determine their own policy preferences;their national and human interests are sacrificed to theinterests of the dominant powers (Hancok, 1989). Glob-alization has resulted in deepening poverty, social disinte-gration, and environmental destruction. Globalization ofcorporations in these nations has resulted in the destruc-tion of domestic production economies in favor ofexport-oriented, cash-crop activities and global interests.People in most of these nations have been struggling withrepressive regimes and politico-administrative elites whoare supported by global corporations and the Westerndemocracies, including the United States (Cottam, 1979;LaFeber, 1984; Mander and Goldsmith, 1996).

Conversely, the threat to domestic Western democracyis also real when global corporations close factoriesovernight and take their business overseas without con-sulting local communities (Wilson, 1997), or when for-eign investments in domestic enterprises are made with-out input from local communities. Local people have lostcontrol of their communities (Mele, 1997; Korten, 1995,

managerial elites are making

colonizing decisions that affect governments,

communities, and peoples around the globe, and

human beings are reduced to consumers of global markets.22). Community displacement is a bitter pill that mil-lions of farmers in many less-developed nations havebeen tasting for several decades. Self-sufficient farmerswho contributed to their community and to the nationaleconomy have been forced out and dispossessed by glob-alizing agribusiness and agroindustry, which have had thefull support of subservient governments and administra-tive elites. These farmers' migration to cities to seekundignified wage-earning jobs has only exacerbated exist-ing urban problems (Chan, 1996; Helmut, 1975; Hoog-land, 1970; McCoy, 1971; LaFeber, 1984; Farazmand,1989, 1991b). However, such problems of displacementare justified by modernization theorists such as Hunting-ton (1968). Similar charges of globalization focus atten-tion on the "global pillage" (Brecher, 1993; Mander andGoldsmith, 1996) and "modern slavery" in "sweatshopsbehind the labels" (Udesky, 1994, 6G6-6S), creating a"race to the bottom in which wages and social conditionstend to fall to the level of the most desperate" (Brescher,1993, 685-688).

Globalizing managerial elites are making colonizingdecisions that affect governments, communities, and peo-ples around the globe, and human beings are reduced toconsumers of global markets. Contrary to some rational-choice theorists (Buchanan and Toiluck, 1962; Mueller,1989), market and democracy are not synonymous; infact, they are in serious confiict with each other (Lind-blom, 1977; Macpherson, 1987). "Exporting democracy"has been a favorite slogan under the new world order andglobalization (Lowenthal, 1991; Huntington, 1991). Butthe record shows that the great capitalist democracies ofthe West, including the United States, have supported"some of the most repressive and exploitative dictator-ships" around the globe (Kitscheil, 1992), forcing mil-lions of people in less-developed nations to stage bloodyrevolutions (Magdoff, 1969; Schultz and Slater, 1990;Farazmand, 1989).

Equating democracy with market is both misleadingand dangerous. It is misleading because their values clashin many ways. As Heilbroner (1990) notes, "it is ofcourse foolish to suggest that capitalism is the sine quanon of democracy, or to claim that democracy, with itscommitment to political equality, does not confiict inmany ways with the inequalities built into capitalism"(105). Markets are inherently biased in favor of wealthypeople, who may not necessarily realize the needs of ahealthy society. With economic and political power con-centrated in a few global corporations and government


elites, policy choices are "impaired" (Lindblom, 1990),and it is increasingly difficult to exercise freedom ofchoice and to enjoy protected individual rights (Dugger,1989). Global corporations are extremely difficult, if notimpossible, to hold accountable. As Korten (1995) notes,"it is impossible to have healthy, equitable, and demo-cratic societies when political and economic power isconcentrated in a few gigantic corporations" (181).

Equating democracy with market is dangerous for tworeasons. First, the equation is applied inconsistentlyaround the world—friendly dictators are praised for pro-moting globalizing corporate enterprises and are consid-ered democratic, whereas legitimate socialist and indige-nously oriented capitalist governments that are not sofriendly to global corporations are considered undemo-cratic (Gibbs, 1991; Hamilton, 1989). Second, it raisesfalse expectations of democratic rights among people inless-developed nations who live under repressive regimessupported by Western democracies.

Gorruption and elite empowerment. Globalizationpushes privatization as a part of structural-adjustmentprograms, empowers the growing subsidiary elites (sub-servient comprador bourgeoisie) as agents of transworldcorporations, and promotes corruption in less- as well asmore-developed nations. Such corruption at the highestlevels has already reached the point of national crisis. Forexample, Chile has been touted as a model of privatizedeconomy, when in fact one-third of the population livesin miserable poverty, while the military-bureaucratic-business elites enjoy world-class lifestyles (Rehren, 1999;Gould, 1991). Similar problems are reported in theUnited States (see Henry, 1993; Thayer, 1984). Otherstudies refer to globalization- and privatization-inducedcorruption among elites at high levels around the worldQreisat, 1997; Eisner, 1995; Farazmand, 1996a).

Elite empowerment leads to a new global organiza-tional structure with the characteristics of a global "cor-porate empire" that requires fiexibility in its giant trans-formation of the world power structure. It calls forconcentration without centralization, similar to colonial-ism, with four elements: (1) downsizing to organizationalcore competencies; (2) computerization and automation;(3) mergers, acquisitions, and strategic alliances; and (4)headquarters teamwork and morale among core person-nel (Harrison, 1993). This transformation draws a cleardemarcation between the elites and the nonelites, the lat-ter seen as expendable commodities (Dugger, 1989).Globalization empowers elite dominance under the newworld order in which hegemonic theory prevails alongwith the globalization of capital (Korten, 1995). What,then, are the implications of globalization and the newworld order for public administration?

Implications for Public Administration

The following paragraphs highlight the challenges fac-ing public administration and offer suggestions for public

administrators across the world.1. There has been a major change in the configuration

of public-private spheres in favor of the globalizing cor-porate sector. The leading economic role of the govern-ment and the public sector in the allocation of resources,the equitable distribution of wealth, the stabilization ofeconomy, and economic growth has been overruled bythe globalizing corporate elites. With the fall of the Sovi-et Union and increasing globalization, as well as the fiscalcrisis of the state, the traditional administrative state hascome under attack from all fronts, but especially from thecorporate elites who no longer see a need for the welfarestate. Therefore, the dismantling of the administrativewelfare state has had negative consequences for publicadministration and citizens. The "public sphere" and thespace for citizen involvement have been shrinking as aresult of globalization and government restructuring(Rockman, 1997; Habermas, 1974; Offe, 1985). Publicadministrators should resist shrinking this realm of publicservice by engaging citizens in the administration of pub-lic affairs and by playing a proactive role in managingsocietal resources away from the dominant control ofglobalizing corporate elites. Their future legitimacy willbe based on this action.

2. A bigger challenge lies in the change in the charac-ter and activities of the state and of public administrationfrom "civil administration to non-civil administration"(Farazmand, 1997a,b). For several decades, the tradition-al administrative state balanced corporate elite interestswith broad public interests, thus providing the social andpolitical stability necessary for capital accumulation andsystem legitimacy. And it played a key role in systemmaintenance and regime enhancement. Now, the bal-anced administrative state has been replaced by the cor-porate-coercive state, which is characterized by a massive-ly growing coercive bureaucracy in charge ofincarcerating millions of citizens considered potentialthreats to social order. These citizen threats are created bymarket chaos under economic and social pressures causedby globalization and marketization (Schneider, 1993;Farazmand, 1997a,b,c). The criminalization of society isfinding many victims among the most respected, hard-working citizens, who are trapped in unbearable socioe-conomic conditions (Davey, 1995; Lowi, 1996). As aresult, public administration is being transformed fromtraditional civil administration to noncivil administrationof the "public"—not their affairs—for social control andfacilitation of capital accumulation. This is a majorchange in the character of the state and should be resistedby all public administrators with a social conscience.

3. The globalizing state has forced public administra-tion to do more with less. Indeed, public administratorsmust perform the impossible task of high output undersevere psychological conditions of fear and downsizedpersonnel, setting them up for failure only to prove thecorporate claims of government inefficiency. Publicadministrators can and should document their records of


high performance as well as the failures of the corporatemarketplace.

4. By extension, the professionalization of publicadministration is a response to the challenge of globaliza-tion. Professionalization brings both institutional andmoral and ethical standards to public service at the globallevel, exposing the fallacies of globalizing transnationalelites while learning from their organizational and techni-cal skills. The excesses of globalization and market failurewill invite more government intervention. A professional-ly sound public administration should be ready for fiiture

action.5. Globalization pushes for increased privatization,

which promotes greater opportunities for corruption(Gould, 1991). Gorruption has turned societal resourcesinto illegal, immoral, and unproductive activities. It alsochallenges the very foundations of societal health anddestroys citizens' trust in leadership and system legitima-cy. Privatization is based on the market-based, rational-choice theory of self-interested individualism in search ofmaximizing self-interests at almost any cost to communi-ty and society. This behavioral and normative philosophyputs individual interests above the interests of the com-munity and society (Bellah et al., 1991; Triandis, 1995);this is exactly what the globalizing transnational compa-nies are trying to promote in order to build a global cul-ture of consumerism that converges national cultures intoa global culture (Schein, 1985). This global corporateculture is, in part, managed through human resourcesmanagement practices, many of which are in sharp con-trast with national and community cultures (Laurent,1986). Public administrators must resist the market-based concepts of treating citizens as consumers anddegrading them to market commodities.

6. Globalization tends to promote elitism and enricheselites—business, political, military, and managerial—most of whom operate as "subsidiaries" (Schenider, 1993)or agents of transnational corporations. The personal andcareer interests of these "global soldiers" generally over-ride national and community interests; they actuallybecome "corporate mercenaries" (Edstrom and Galbraith,1977) and promote "cultural imperialism" (Said, 1993).People in less-developed nations are familiar with thesesubservient elites, who seem to rise to power and wealthovernight at the expense of millions. Because the globaliz-ing governments are actively involved in corporate global-ization through the implementation of public-privatepartnership programs with globalizing firms, publicadministrators and administrative consultants are chal-lenged by the implications of this aspect of globalization.Many elites in less-developed nations run repressiveregimes which violate the human rights of their own peo-ple. American advisors and consultants often enhance thedomination of these bureaucratic elites—both militaryand civilian—over their own society in less-developedcountries (Riggs, 1994, 36; Said, 1993; Parenti, 1995).Paradoxically, globalization has produced a massive con-

more about public administration fom

a comparative perspective broadens our world outlook.

centration of corporate power and has centralized itsorganizational structure while at the same time govern-mental decentralization has been promoted across theworld.

7. Globalization threatens communities (Korten,1995) and "public spiritedness"—to borrow Frederick-son's 1997 term—by removing local control and makingirrelevant the participatory role of citizens and local pub-lic administrators to make significant decisions that affectpeople's lives. Local governments' ability to forecast rev-enue bases will be undermined as global firms close oper-ations overnight for more profitable locations (Eisner,1995; Mander and Goldsmith, 1996). Public adminis-trators should try to minimize such uncertainties byattaching long-term strings to dealings with global corpo-rations. They should also build a sense of community,encourage citizen involvement in administration, and fos-ter values of citizenship and community/public interestin balance against rugged self-interest. And they shouldtreat citizens with respect and effiiciency.

8. There is a growing knowledge explosion in publicadministration and related fields, including in its sub-fields of comparative and international administration(Savitch, 1998). I agree with Ferrel Heady's (1998) state-ment that these two subfields have been separately anddisjointediy promoted in the past decades. There is anew subfield of globalization in town now, and there is aneed to integrate the studies of public administrationfrom the comparative, international, and global perspec-tives. ASPA members are challenged to undertake thisnew endeavor to produce materials that will help to gen-erate generalizations across global spaces. Practitionerswill be enlightened by the exposure to these needed stud-ies and will likely be better administrators in the futureglobal village.

9. Learning more about public administration from acomparative perspective broadens our world outlook.American students and scholars can broaden their per-sonal and professional worldviews by appreciating thecultural, institutional, and religious underpinnings of theadministrative cultures of less-developed nations, some ofwhich have rich cultural and governance heritages. Glob-alization challenges the American parochial and ethno-centric tradition of public administration and shatters thepolitics-administration dichotomy while providingimmense opportunities for consultancy and corporate-related public management practices in less-developedcountries. Learning about other peoples, cultures, andpublic administration contributes to fiarther "knowledgeexplosion." Already, rich administrative traditions existaround the world to which Americans have not beenexposed. Examples include Scandinavian and Soviet sys-


tems of public administration (Gaiden, 1994), as well asthe systems of cooperatives in which democratic adminis-tration can be fostered. Similarly, Americans and otherglobal citizens can learn about public administrationunder other indigenous systems. Comparative study ofgovernance and public administration is not new and hasa long tradition dating back to ancient times (Heady,1996; Farazmand, 1996b); its focus for global studies ofadministration should be the agendas of the Section onInternational and Gomparative Administration (SICA) ofthe American Society for Public Administration in thetwenty-first century.

10. Globalization challenges the human conscience ofthe public administration community. Professional citi-zens of the global community have the opportunity—andthe responsibility—to observe and examine what is hap-pening around the corners of their global community.There are many issues that challenge their conscience,including the conditions and deprivations of the poor,wage slavery and sweatshops in global factories, environ-mental destruction, global warming, and inequity andinjustice. Raising consciousness about global issues, bothpositive and negative, is both important and necessary, aspublic administrators can make a difference when mak-ing decisions that affect their fellow citizens. They canquestion the sincerity of the elites, oppose exploitation,and resist being used for undemocratic, unjust, andinequitable purposes around the globe. In the 1980s,public administrators played an effective role in the glob-ally successful campaign against South Africa's regime ofapartheid. Raising such a global consciousness can chal-lenge destructive forces of globalization and global eliteson various grounds. The Internet and other communica-tion systems can help administrators communicate glob-ally with fellow professionals in outlying areas.

11. As guardians of "global community interests,"public administrators in more- and less-developed

nations have a global responsibility to act ethically andmorally in a coordinated manner. They must expose andfight corruption at any level and at any time. Politicalappointees and politicians are temporal officials, many ofwhom have intimate fmancial and personal ties withglobal corporate elites; they are prone to corruption andabuse of authority, and their definition of public interestis narrow and aimed at the powerful constituencies.

12. Globalization does not end the state and publicadministration. There is a new global challenge thatbroadens public administration's scope of research, prac-tice, and teaching. Public administration has just entereda new stage of human civilization, with a future that isboth brightened and darkened by globalization and thehegemonic world order. We hope that prosperity for allwill be the outcome.

• • •

Aii Farazmand is a professor in the School of PublicAdministration, Florida Atlantic University, where heteaches organization/administrative theory, behavior, con-ceptual foundations of public administration, and per-sonnel administration. His current research interests areorganizational elite theory, administrative state, globaliza-tion, governance and administration, privatization,administrative reform, bureaucratic politics, and strategicpublic personnel administration. He is the author andeditor of more than 14 books and handbooks, including:Handbook of Gomparative and Development Public Admin-istration (1991/1993, 2nd ed. 1999); Handbook of Grisisand Emergency Management (1999); Modern Organiza-tions (1994); Public Enterprise Management (1996); SoundGovernance (1999/2000); Building Human Gapitalfor the21st Gentury (1999/2000); Strategic Public PersonnelAdministration (2000); Privatization and Public EnterpriseReform (1999); The New American Administrative State: ANew Institutional Analysis (2000); and Globalization andthe New Gorporate Administrative State.

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