How are NGOs, MNCs, and international organizations impacting state sovereignty?
Updated: Mar 31, 2021
One of the common topics of debate in modern day political discussions is the idea of whether NGOs, MNCs and international organizations are seriously impacting state sovereignty.
To answer this question in detail it will be important to define some key terms that have been used. An NGO is a non-governmental organization, these actors are independent from the government. NGOs can be international or national, lots of NGOs are charities, an example of an NGO is the ‘Red Cross’. An MNC is a multinational corporation, any company that operates in multiple countries would be considered an MNC. Examples of MNCs are McDonalds and Apple. An international organization is an organization wherein multiple countries from different parts of the globe have united to achieve goals, examples of international organizations are United Nations and World Health Organization.
For an entity to be regarded as a state and achieve ‘Statehood’ it must have 4 of the following features: A functioning government, defined boundaries, ability to enter international relations and a permanent population. To achieve full sovereignty states should have full control over the 4 aforementioned factors and should be independent, entities such as a puppet state cannot be considered sovereign states as they do not have true control over their actions and resources.
It is easy to make a case that MNCs, NGOs and international organizations have diminished state sovereignty. First let us discuss MNCs, these are some of the most powerful organizations in the world, the financial power of these organizations is unthinkable. MNC’s such as Microsoft and Amazon have a higher valuation than the GDP of some countries, this fact gives them tremendous power and influence. States know and acknowledge the power of MNCs as they are the biggest employers everywhere in the world for both white-collar and blue-collar workers. MNCs such as Nike create thousands of jobs for low skilled employees especially in south Asian countries such as Vietnam and Indonesia. This is hugely important to state as generating employment for low skilled workers is the biggest challenge for most governments. Furthermore, each country’s highly skilled workers are also employed by MNCs, for example Microsoft employs thousands of software engineers in India. Because of their financial might and ability to generate employment, MNCs have leverage over states. MNCs could ask for large tax cuts and other benefits knowing that the state will give it to them because if the MNCs leave that country it would severely damage that states economy. This is called ‘capital flight’.
NGOs have a less direct impact on state sovereignty, in most cases NGOs do not get involved in political situations since their goals are often humanitarian and charitable. However, some NGOs can be a threat to state sovereignty since they indirectly challenge authority. NGOs often provide services and aid that you would expect the government (state) to provide, this sometimes shows the weakness of states, for example if an NGO is doing charitable work by helping the homeless it makes it seem like the state itself is not doing enough to help the homeless. Because NGOs are non-profit and not part of the government, they cannot be held accountable for their actions. Some NGOs play a key role in influencing humanitarian and social constructs, for example many NGOs advocate for the involvement of women in positions of power. The perception of NGOs in the public is usually positive, this gives the NGOs a certain type of internal soft power that challenges the states authority and sovereignty.
International organizations have perhaps the biggest impact on state sovereignty, they also have many requirements and rules for members that they must all abide by. IO's can also forcefully restrict member states from taking certain actions and make states abide by rules that they do not necessarily agree with. .
There is also a case to support the fact that MNCs NGOs and international organizations do not have a significant impact on state sovereignty. Some states have close relationships with MNCs since both governments and companies want economic growth. A good example would be the relationship between Boeing and the US government, Boeing is an American MNC but works closely with the American government to develop weapons and aircraft for military and commercial use. So, in one sense Boeing does not erode American sovereignty in fact they boost American sovereignty because they are one of the primary suppliers for US military equipment. Furthermore, some MNCs are indirectly controlled by the state, Huawei which is a Chinese MNC has strong ties to the government and may even use their data and information to help the Chinese government. Again this means rather than diminishing Chinese state sovereignty Huawei is enhancing Chinese sovereignty.
It can also be argued that in any case states have the final word on whether they want to be part of International organizations and let NGOs and MNCs operate. A state has full rights to pull out of organizations and ban MNCs/NGOs if they wished to.
As we approach the end of this article, we are yet to reach a confirmed conclusion as to what impact MNCs NGOs and international organizations have on state sovereignty. To answer this question, it would be ideal to refer to what makes a sovereign state as was discussed at the beginning of the article.
The first requirement is having defined boundaries, MNCs and NGOs do not have any impact on borders, but international organizations do sometimes impact border lines. However, their impact is not significant since international organizations usually aim to implement peacekeeping operations rather than redefine borders. Hence the impact of the three is minimal on the first requirement.
The second requirement is having a permanent (and controllable) population. MNCs have an impact on this since lots of people around the globe migrate to work for MNCs, in the last few decades millions of people have migrated to the USA to work for MNCs such as google and Amazon. This may diminish the sovereignty of states, however in my opinion International organizations have the biggest impact on this factor. One of the key geopolitical issues in the last 5-7 years is the refugee crisis in Europe, through the course of these years the European Union (which is an international organization) has forced countries to allow immigrants even if some countries don’t want to take immigrants in. The moral side of this can be debated however the reality is that some European Union member lost control over their population and border control against their will. The primary factor for Brexit was exactly this, losing control of their borders and population led the British public to vote for leaving the EU. It can thereby be understood that MNCs and International organizations do erode a state’s rights to control their own borders and population. (It should also be noted that this requirement is different from the borders requirement since states still have defined borders but they lose control over them due to mass immigration, that’s why this point ties in with population rather than defined borders)
The next requirement is having a functioning government, MNCs NGOs and IOs do not really impact this feature but as has been discussed earlier they can undermine how well a government function. Losing control of borders and tax breaks for big MNCs all undermine the functionality of a government.
The final factor is ability to international relations with other states, IOs can restrict this since members of organizations such as the WTO and UN are not allowed to freely trade with some other states. A good example would be that UN members are not allowed to trade freely with Iran due to the sanctions that have been imposed on them, even if it would benefit the state they cannot freely trade with Iran because trade above a certain threshold and on certain items is blocked.
As per the points made in the essay it can safely be concluded that MNCs NGOs and IOs do indeed impact state sovereignty. All three of them erode state sovereignty through different means, IOs and MNCs have a bigger impact than NGOs on eroding state sovereignty but all 3 can be very damaging. It will be a challenge for states in the 21st century to maintain sovereignty as these 3 forces work together to diminish their sovereign rights.