States are the Most Powerful Global Actor

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‘States are the most powerful global actor.’ Discuss.

Although global actors can sometimes have considerable power over states, the extent of this power ultimately depends on the relative power and influence of the state in question. Large developed states, such as the US, are extremely powerful compared to most other global actors and are not often influenced by their actions. However, small and undeveloped states are not always completely powerless. To determine whether states are indeed the most powerful global actors, we must look at the relative powers of trans-national corporations (TNCs), non-government organisations (NGOs) and some of the institutions of global governance.

TNCs have significant power over developing states but are subject to the power of developed states such as Australia and America. This is a result of the nature of TNCs. For example, their main objective is to maximise profits for shareholders and they often breach environment and human rights laws in the process. For this reason, developed states have the capacity and economy to make laws against TNCs to stop them either causing significant environmental damage or exploiting cheap labour. For example, in Australia, large mining companies such as BHP-Billiton and Rio Tinto launched a major advertising campaign against the introduction of a mining ‘super profits’ tax’. Despite these TNCs attempting to use their huge profits and economic resources to influence the government, Australia was able to resist their efforts due to the fact that they do not rely on foreign direct investment (FDI) from TNCs. However, the Australian government did modify the tax slightly to reduce its impact on mining companies profits but ultimately proved to be the more powerful global actor. In contrast, developing states that largely rely on FDI from TNCs for economic growth, do not have the capacity to make laws against the interests on TNCs. For example, Shell is involved in oil production in Nigeria, which

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