The Net and electronic commerce render that argument problematic. Krasner, who has always argued for the dominance of states in the system, recognizes that technology has weakened the authority of states and the bargaining power that flows from the ultimate right to grant access to territory. In cases where technology facilitates 'disembodied transnational movements' state authority is weakened (Krasner 1995). (He does go on to argue that further erosion of state control is not evident.)
As noted above, geographic jurisdiction may not be meaningful in cyber-space. To the extent that markets migrate to cyberspace, and especially to the extent that digital transactions gain in importance, territorial sovereignty will not provide the basis for effective or efficient economic governance. That certainly raises questions about the viability of an interstate system constructed on the basis of mutually exclusive geography and the recognition of and by, and only of and by, like units.
The emerging world order is likely to involve a range of heterogeneous units in multiple, interwoven, and overlapping layers of governance. Effective economic (and political) governance may well involve governments, the private sector (MNEs), a broad range of civil society groups, and international organizations. The meaning of sovereignty may evolve to mean no more than a very prominent seat at the table in international negotiations. Furthermore, the line separating what is domestic and what is international is rapidly being erased in many issue areas.
States will not disappear and will certainly continue to play a major, if not the major role in the international order. That however, is not the same as saying that they will remain the supreme authority domestically or the only constituent units of the international system. This time around, sovereignty in terms of both domestic authority and mutually exclusive territoriality may really be 'at bay'.
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Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Book title: The Oxford Handbook of International Business. Contributors: Alan M. Rugman - Editor, Thomas L. Brewer - Editor. Publisher: Oxford University Press. Place of publication: New York. Publication year: 2001. Page number: 201.
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