Understanding Power, Authority, and the Modern State

Posted on Mar 26, 2025 in Business Administration and Management (BAM)

Power, Authority, and the State

Power: The ability to influence others to do something they would not otherwise do.

Coercion: Influencing others’ actions through the use of violence or by imposing losses.

Authority: Conditioning the behavior of others through the use of means that are perceived as legitimate (including violence).

Authority may derive from the actor’s position (e.g., the US). Authority may derive from expertise (e.g., WHO). Different sorts of authority include religious, traditional, charismatic, legal, relational, and those related to International Political Economy.

State: A political organization with continuous operations that successfully upholds a claim to the monopoly of the legitimate use of physical force in the enforcement of its order.

State Capacities and Characteristics

Capacities:

  • Capacity to ensure the fulfillment of pre-determined objectives
  • Monopoly of violence
  • Bureaucracy
  • Rule of Law
  • Resources
  • Engagement with other actors
  • Ability to collect taxes

Characteristics:

  • Bureaucracy
  • Impersonality
  • Sovereignty

Functions:

  • Defense
  • Order
  • Taxation
  • Government/Administration

Origins of the State

  • Political Conflict (Hobbes): In Leviathan, Hobbes argued states emerged to prevent anarchy.

  • War (Tilly): States developed military capacity to defend territories, and this process built modern governance structures.

  • Economic Factors (Marxism): Capitalist states formed to protect elite interests and manage class conflicts.

  • Cultural Aspects: Shared identity and collective memory unify populations under state rule.

  • Diffusion/Isomorphism: New states model themselves after successful examples (e.g., post-colonial states adopting Western political systems).

Example: The Treaty of Westphalia (1648) is often seen as the birth of the modern state system, solidifying the concept of state sovereignty.

The Retreat of the State (Susan Strange)

Ongoing debate: Is the State losing authority?

  • Territory and authority might not match.
  • ‘Discharge’ – other actors take over core functions of the State.
  • Technological advances and financialization processes reduce the authority of the State.

Paradoxes (Susan Strange):

  1. The State remains a key actor, but other sources of authority must be taken into account.
  2. States are losing authority, but their role remains crucial (e.g., security, policies: generosity vs control).
  3. In emerging economies, the State plays a central role (neo-developmental State, e.g., China and Brazil under the Workers’ Party).

Other Actors (Susan Strange):

  1. Telecommunications
  2. Organized crime
  3. Insurance companies
  4. Large consulting firms
  5. Cartels
  6. International organizations / international financial institutions

Organized Crime

  • Not a new phenomenon, but displays new characteristics.
  • Hierarchical Structures
  • Goals are similar to those of companies: generate profit.
  • Taxes

Organized Crime (cont.):

  • Internationalization
  • New activities
  • Financial market + Political ties
  • Defy State Authority: Taxes, Security, Services and alternative forms of support
  • Market alterations, Taxes, Production, Consumption

International Organizations

  • IO and authority
  • Transfer?
  • States remain important?
  • Neofunctionalism
  • Ernst B. Haas – European Coal and Steel Community
  • Regionalism over globalization
  • Integration of specific sectors lead to further integration – spillover effects
  • Post-WW2
  • Post-Cold War
  • Since the pandemic

Hard Power vs. Soft Power

Hard Power: Coercion

  • Military
  • Economic
  • Conditions
  • Coercion
  • Negotiated
  • Conditions: types
  • Punishment
  • Rewards
  • Funding
  • Specific programs
  • Specific activities – i.e., policy evaluation; pilot programs

Soft Power:

  • Knowledge production and dissemination
  • Technical support
  • Networking
  • Event organization

International Financial Organizations

  • Soft power: knowledge production and dissemination, technical support….
  • Coercion: loans and conditionalities
  • i.e., structural adjustment programs
  • WB, IMF, IADB….

World Trade Organization (WTO)

Created in 1995. The Uruguay Round and Marrakesh replaced GATT. International Trade Regulation facilitates trade between nations by reducing barriers to services, goods, and intellectual property. Expanded new areas of trade (i.e., telecommunications), new members, and new challenges: new technologies, IA… Other challenges: political reconfigurations.

WTO Principles

  • Non-Discrimination Principles
    • Most Favored Nation: All countries should be treated equally, without discrimination.
    • National treatment: Foreign and local goods must be treated equally.
  • Promote Free trade: Negotiations to reduce barriers to trade between nations.
  • Predictability: Trade rules should be stable and predictable.
  • Promoting fair competition
  • Encourage development and economic reforms

WTO Structure

Member countries + observers

  • Ministerial Conference – every 2 years, participation of all members
  • General Council
  • Dispute Settlement Body
  • Trade Policy Review Body

Decisions: consensus or 2/3 of the votes. Decision-making is slow, leading some of the States to act outside the realm of the WTO (i.e., bilateral and regional agreements). Dispute settlement is a difficult process (i.e., China and recent complaints against US discriminatory tariffs (Trump)).

The Bretton Woods System

The Bretton Woods system was an international monetary system established in 1944, during a conference in Bretton Woods, New Hampshire. It laid the groundwork for modern global economic governance by creating rules for monetary relations between countries.

Key Features:

  1. Fixed Exchange Rates: Currencies were pegged to the US dollar, which was convertible to gold at $35 per ounce.
  2. US Dollar as the Anchor Currency: The dollar became the world’s primary reserve currency.
  3. Creation of International Institutions: The International Monetary Fund (IMF) and the World Bank were established to stabilize the global economy and fund post-war reconstruction.

Purpose:

  • Prevent competitive devaluations (where countries devalue their currency to gain trade advantages).
  • Foster global economic stability and growth.
  • Rebuild war-torn economies.

Impact:

The system helped restore post-war global trade, but it started collapsing in the 1970s when the US ended the dollar-gold convertibility (the “Nixon Shock”), leading to floating exchange rates.