NOYO OSAGHAE
1/30/2012
I HAVE NEITHER GIVEN NOR RECEIVED, NOR HAVE I TOLERATED OTHERS’ OF UNAUTHORIZED AID

THE ROLE OF LOCAL GOVERNMENTS IN A GLOBALIZED ECONOMY
Recent developments in the global economy would seem to suggest that it is in the interest of states to be integrated into the global economy, although it is also obvious that most would like to do so in the most beneficial and equitable ways. The increase in the number of states seeking membership in the World Trade Organization is perhaps evidence enough that states, whether developed or underdeveloped, democratic or non-democratic, want to play a role in the World Liberal Order. The circumstances under which states are influenced to be integrated into the global economy however vary from one state to another and can be internal or external. Amongst the internal factors are national interests, pressures from regional governments, local governments, pressure groups, and private enterprises etc. The significance of the internal factors lies in the fact that even though in most cases it is private enterprises that dominate the flow of international trade, the interests and welfare of citizens constitute the critical basis of a state’s actions in the global economy. Further, domestic institutions affect which groups or interests have a voice in national trade policy. Also, just as domestic institutions influence political (and economic) outcomes, the international trade regime can also be a vehicle through which leaders manage domestic political pressures. It is on this basis that I propose to analyze at the micro level, the domestic institution which is closest to the people, namely, local governments, and the ways they affect and are affected by the global economy. As a result of the recent financial crisis, it is evident that there is an increased role of the state in the global economy in democracies and authoritarian systems alike. As Burrows and Harris (2009) predict, there would be a shift towards a greater state role in the economy through State Owned Enterprises and Sovereign Wealth Funds. This possibility of increased state involvement in the nearest future heightens the significance of understanding the role domestic or internal institutions play and how they are in turn affected by the outcomes of the global economic process. There is a need to identify if the national economic policies formulated by world liberal order are acceptable to not just the national governments who pass them into law but also the government at the grassroots. Most notably in Africa there are numerous scenarios where although the presence of global economic programs and principles may not be in the interest of the local communities, leaders acting on personal intuition and for selfish reasons, welcome the opportunity to promote globalization. However, policy makers in the region agree that globalization cannot be stopped but understood and adjusted to (Suruma, 2002). This also sparks another question; how do local governments seek to adapt to the fast changing times dictated by a global economy? We shall analyze the sluggish growth of enterprises owned and run by local government and the chances they stand in competing with their counterparts in the private sector in having a global impact. We shall consider the push and pull effects of a globalizing economy that lead to emigration from localities, the dispersal of tenets of democracy, good and democratic governance, including encouragement of demands for transparency, responsiveness, accountability, participation and collective governance through globalization. Local governments have also fought to have more autonomous spaces, and have been encouraged by neoliberal reforms that emphasize decentralization and lean central governments. LITERATURE REVIEW

This section of this paper reviews scholars relevant to our subject matter stated above. Globalization and Glocalization: Experiences in the Local Philippine Context Ma. Divina Gracia Z. Roldan Acknowledging Globalization as a phenomenon that poses challenges (persistent poverty and increasing inequalities), as well as, opportunities (decentralization of power, improved economies etc.), Roldan seeks to discover how localities can capacitate themselves by merging global opportunities with local interest. According to her “While globalization gives rise to global cooperation, global local tensions surface as localities adapt to economic, technological and societal changes brought about by this process”. The method of adaption stated, is through the process of “Glocalization” which she defines as “a merging of global opportunities and local interests, aiming to create a more socio-economically balanced world, which calls for the accommodation of global perspectives to local conditions, as well as for a more pronounced role of local actors addressing global challenges”. She further explains the function of Glocalization as “making cities key players in decentralized foreign policy, diplomacy, trade and inter-city projects forwarding social and economic development. This activity happens through the creation of coalitions where local governments serve as a balancing force to international private and public sector organizations in the framework of joint projects”. This viewpoint emphasizes the importance of the reform of globalization to be spearheaded by local leaders as they are more sensitive to social and cultural needs and closer in proximity to citizens than their national counterparts. The author analyzes these local responses to globalization based on the study of the export, business and ICT sectors of the Philippines, focusing on the said sectors means of reacting to the opportunities and challenges globalization has brought forth”. An analysis of the issues in the local export sector that PHILEXPORT Cebu seeks to address is further evidence of the impact-reaction relationship shared by the local community and the global economy. The author further identifies the attempts by the local export community to incorporate the latest information gathering trends and tips on helpful websites, as well as, models of information service of successful business chambers in Western Europe and developing countries into their pattern of activity. This is can be considered as perhaps another reaction by this sector to cope with the competitive nature of the global economy. With regards business, she points out the global economy’s influence on the local community stating “the effect of the GATT/WTO agreement attendant with globalization can be felt especially in the retail and manufacturing sectors. Visible effects are in the flooding of goods from China in the downtown area and even in the closure of some long-established manufacturers”. The response to this is the effort by the local administration to promote business and enterprises (especially small and middle scale) through “trade promotions, fairs and exhibits giving emphasis to small and medium enterprises in exploring a wide range of local market as well as in the international market, trade missions to explore international business linkages, and conducting seminars, training on ICT, marketing and family business management, negotiation skills, sales, regional linking, and health care to gear them up in facing an increasingly competitive business environment in the global arena. According to the Roldan, the major ways the local government responds to the demands of a changing, glocalizing environment is to make its internal systems more efficient as well a foster a globalization provided computerization drive. Externally, she points out how the local administration seeks increased connections with cities all over the world through the active establishment of sisterhood agreements. Connections to states, cities and provinces such as the Netherlands; Seattle, Washington; Honolulu, Hawaii; Salinas City, California; Xiamen, People’s Republic of China; Sevilla, Spain; Guadalajara, Mexico; Punta Arenas, Chile; Ngiwal, Palau; Yochon involve not only economic, but cultural and socio political changes as well. Roldan concludes by first emphasizing the increased role of local actors in the global economy stating “In a globalizing/ glocalizing world, local players are engaged, global-local linkaging is intensified, and governance becomes decentralized. Further, the local development council also serves a mechanism to include the voice of the private sector and civil society in the local development agenda. She therefore contends that the positive impacts of globalization have allowed these local actors to capitalize and therefore stand a greater chance to compete in the global economy. She finally prescribes enabling factors that can maximize global influence; leadership not only of the local chief executive but also of the private sector and civil society organizations, the ability to use, process, analyze data on resource inputs to the locality (Information), education that meets global labor demands, a mindset that is global in orientation but grounded on local realities In this article, Roldan does a good job of putting in perspective the variations in states domestic and international interests as well as highlight the effects the international can have on the domestic and vice versa through the concept of glocalization. Though the scope of her study (select sectors in the Philippines) c...

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