“The Network State”: Nation-State In The Age Of Globalization

“The coming of information age do not only represent the crisis of the nation-state of the modern age, but also the return of the state under new organisational forms, new procedures of power-making, and new principles of legitimacy.”


This paper examines the various challenges of globalization that forced the transformation of the nation-states to network states; what the “network state” means and represents in the information age; the case of European Union as an advancement of what Castells call the network state; and the case of the United States and its policies particularly in the aftermath of 9/11 as a fundamental contradiction to the functioning of the network state.

This paper argues in line with the basic argument that Castells has put forward that the network state is the response of political systems to the challenges of globalization.

The Nation-State in the Information Age: Challenges of Globalization


The transformation of the nation-state of the modern age to the network state is compelled by the challenges posed by globalization. To understand what the network state means, how it evolved, in what manner, therefore, it is necessary to understand the challenges of globalization that led to this transformation and the role played by political systems in this transformation.

What Hegel once remarked about state as the march of god on earth will be laughed at in today’s time when the state is often argued retreating. In fact, the state seems finding no free place on earth to march on further since the land, places are now owned by private firms!

Indeed, as Castells puts it,

‘the analysis of globalization has been dominated for a long time by the debate about the fate of the nation-state in a world in which the key processes at the source of wealth, technology, information, and power have been globalized.’

There have been predictions or even arguments for the demise of the nation-state and its replacement by new institutions of global governance. In fact, the relevance of the nation-state is questioned in the era of globalization characterized by transnational flow of information, technology, capital, and wealth.

Strengthening the same argument, Susan Strange, for example, argues that there is a collective retreat by the states and that authority is increasingly to be found in private non-state actors particularly the transnational corporations. According to Strange, transnational corporations are increasingly exercising a “parallel authority,” alongside governments, in matters of economic management. She goes on so far as to say that most states will not in future be required to defend their national territory.

Further, Castells points out ‘while global capitalism thrives, and nationalist ideologies explode all over the world, the nation-state, as historically created in the modern age, seems to be losing power, although, not its influence.’ In fact, it is argued that the globalization of core economic activities, the globalization of media and electronic communication, the globalization of crime, the globalization of social protest, and the globalization of transborder terrorism all have decisively undermined the instrumental capacity of the nation-state.

The network society is an outcome of globalization- globalization of communication, information, and technology. The emergence of the network society impacted upon production, power, experience and culture. It has impacted more basically the very way the nation-states function, the way global economy work, the way humankind interact, and the way different cultures and experiences interact with each other.

The structure of the network society in the information age makes it impossible for nation-states to individually and autonomously control the fundamental issues occurring at global level and which are transnational in nature. The autonomy of the nation-states are now limited with their increasing incapacities to address the issues that are occurring beyond their territories.

One such manifestation is seen in the instances of global interdependence of financial markets and currency markets, leading to interdependence of exchange rates, then monetary policies, then prime interest rates, then budgetary policies. This leads to the limitation of the control by nation-states over their fundamental elements of economic policies. Today, ‘national economic policies become highly constrained by loosely regulated, barely controlled financial markets, thus curtailing governments’ autonomy in economic policy.’

The globalization of media and electronic communication is another important aspect where the nation-state has lost control of its decisive area of state power. The control of information has been the foundation of state power. However, the technology-driven change in the media and electronic communication revolution makes it almost impossible even the authoritarian states to regulate and control media effectively. ‘Computer-mediated communication is also escaping the control of the nation-state, ushering in a new era of extra-territorial communication.’ Besides, there is the impossibility of the source of transborder information flows to be prosecuted even if it can be detected. Therefore, Castells argues, ‘the globalization/localization of media and electronic communication is tantamount to the de-nationalization and de-statization of information, the two trends being inseparable for the time being.’

Another major aspect of globalization that limits the autonomy of the nation-states is the globalization of crime. Because of the scale and dynamism of criminal economy, there is deep penetration, and eventual destabilization of national states in a variety of contexts. Transnational crime today is one of the biggest challenges of nation-states that one individual state cannot handle it alone and there is the need for cooperation among the nation-states and their intelligence departments. In fact, ‘international relations between nation-states, in many countries, come to be dependent, in various degrees, on the handling or mishandling of cooperation in the fight against the criminal economy.’

Moreover, the nation-states are powerless and cannot act independently while the handling of global issues such as environmental degradation, water crisis, pollution, global warming, the ozone layer, the deforestation of the planet, the depletion of the life in oceans, and the like.

Finally, another aspect that squeezes the nation-state today is the political demands for devolution of power. The growing inability of the nation-state to respond to the claims, demands, and challenges of civil society induces what Habermas called a “legitimation crisis”, or, what Richard Sennett describes as the “fall of public man”, the figure that is the foundation of democratic citizenship. The solution to such a legitimation crisis is provided in the form of decentralization of state power to its local and regional political institutions. This has led to what is popularly voiced that

‘national governments in the information age are too small to handle global forces, yet too big to manage people’s lives.’

In short, globalization, in its different dimensions, undermines the autonomy and decision-making power of the nation-state.

So what will happen to the nation-state? Is there going to be the demise of the nation-state as some predict? Does globalization lead to the end of the nation-states?

To answer these questions, the argument in the paper firstly relies on what Martin Shaw argues that ‘globalization does not undermine the state but includes the transformation of state forms: it is both predicated on and produces such transformations.’ Following this argument is what Castells puts forward:

‘the coming of information age do not only represent the crisis of the nation-state of the modern age, but also the return of the state under new organizational forms, new procedures of power-making, and new principles of legitimacy.’

In fact, as Castells further argues, one of the responses of political systems to these challenges posed by globalization is the transformation of the nation-state to network state.

Understanding the Network State

Manuel Castells defines the network state as

“a state characterized by the sharing of authority (that is, in the last resort, the capacity to impose legitimized violence) along a network.”

A network, by definition, he explains, has nodes, not a center. ‘Nodes may be of different sizes, and may be linked by asymmetrical relationships in the network, so that the network state does not preclude the existence of political inequalities among its members.’

According to Castells, the state is ‘the institutional system that mediates and manages the dual relationship between domination and legitimation, and between development and redistribution, under the influence of conflicts and negotiations between different social actors.’ The variable geometry of the state, constructed around the positioning of various power blocs in these four processes of domination, legitimation, development and redistribution, continues to work at the supranational level in the practice of global governance. Thus,

When the state links up with other states, or fragments of states, or associations of states, in the network state, this mediation between the four terms of the relationship between state and society does not disappear, it is redefined. Each individual state has to perform these four functions in relation to its own society. This performance, however, is dependent on what the state does vis-a -vis the nodes of the overall network, from which resources are obtained, and thanks to whom, domination is ensured. Therefore, the actual practice of the network state is characterized by the tension between three processes that are intertwined in the policies of the state: how individual states relate to their constituencies, by representing their weighted interests in the network state; how they ensure the balance and power of the network state to which they belong, as this network state provides the operational platform that ensures the efficiency of the state in a globalized system; and how they advance their own specific interests vis-a`-vis other states in their shared network.

The state, according to Castells, must continue to perform the four different functions mentioned above in this three dimensional political space. For him, this is what constitutes the reality of global governance, defining global governance as indicating the act of governing without government.

However, power relationships operate in this process of global governance. The political decision-making system founded on the network state is characterized by higher orders of complexity and uncertainty. Therefore, political strategies enacted by the state increase their relative autonomy vis-a-vis the interests that they are supposed to represent. Agency prevails over structure. Nevertheless, the structure (the global network society) determines the parameters framing the field of action for strategic actors.

Another similar perspective power relationship in the network state is when defining and interpreting what constitutes the common goods. Usually, the interpretation of what is a common good may be biased toward specific interests. In other words, as Castells argues, the definition of what exactly constitutes a public good, which becomes the shared goal of a network state, is in itself a power relationship. In short, defining global governance goals in the absence of legitimate global government institutions depends on power relationships expressed in the network state.

The major feature in the network state is that the state must assume the interests of the overall network state, and therefore it must respect the domination of the most powerful interests in this network, as a condition of being a node in it. On the other hand, within the network state, there are alliances formed to impose conditions on other nodes in the network. The interpretation of the common good in global environmental conservation by the rich, developed countries to justify their policy of protectionism is one example here.

‘Thus, ultimately, the stability of the network state depends on assuming the loss of individual sovereignty for every node of the network, including the most dominant of these nodes. The affirmation of sovereign rights by some node(s), as an ad hoc amendment to the informal constitution of the network state, is ultimately contradictory to the existence of the network state. The crisis of the network state would then develop into a crisis of global governance itself, as individual nation-states would again retrench into the defence of their specific interests, to be negotiated case by case, and context by context, with other states and political actors.’

‘The actual operating unit of political management in a globalized world is a network state formed by nation-states, international institutions, associations of nation-states, regional and local governments, and non-governmental organizations. It is this network state that negotiates, manages, and decides global, national, and local issues. This network state expresses power relationships between its different components, and within the power blocs underlying each level of the state. Not all the nodes of the network are equal, and their interests diverge, coalesce, or conflict, depending on issues and contexts.’

‘One of the components of the network (e.g. the American state in the early twenty-first century) may decide to impose its interests on the whole network, using its superior organizational capacity. While it is unlikely that it can prevail systematically (if it does the network would be replaced by a global chain of command), its unilateral logic destabilizes the delicate balance of cooperation and competition on which the network state is based. Ultimately, unilateralism breaks the network state into different networks and introduces a confrontational logic between these networks. Therefore, in analytical terms, the reality of the state in the network society requires an understanding of both networking and domination, the practice of shared global governance and the new forms of war-making.’

‘Thus, the more states emphasize communalism, the less effective they become as co-agents of a global system of shared power. However, the more they triumph in the planetary scene, in close partnership with the agents of globalization, the less they represent their national constituencies. When they give exclusive priority to their national interests, as is the case with the American superpower, they destabilize the networks on which they ultimately depend for their survival and well-being. Politics, almost everywhere in the world, is dominated by this fundamental contradiction.’

The European Union as a Network State

According to Manuel Castells, the European Union may be the clearest manifestation to date of the network state, probably characteristic of the Information Age. ‘The European Union is the most advanced example of this political construction that does not negate the nation-states of the Modern Age but integrates them into a new institutional system made up of networks of shared sovereignty to accrue their joint power in a world of global flows. Thus, the European Union has become a 27-member network state, with a number of other states in association.’

The present flag of the European Union.

‘The European Union does not supplant the existing nation-states but, on the contrary, is a fundamental instrument for their survival on the condition of conceding shares of sovereignty in exchange for a greater say in world, and domestic, affairs in the age of globalization.’ This is a partly explanation of the unlikely success of the European Union. But this convergence of interests still had to find an institutional expression to be operational. The network state is that institutional expression.

Castells finds it true of what Keohane and Hoffman proposed the notion about the European Union that it “is essentially organized as a network that involves the pooling and sharing of sovereignty rather than the transfer of sovereignty to a higher level.” It also manifests a plurality of overlapping powers.

Such an image illustrates powerfully the new form of state epitomized by European institutions: the network state, defining the network state as characterized by the sharing of authority along a network. As already put, a network, by definition, has nodes, not a center. Nodes may be of different sizes, and may be linked by asymmetrical relationships in the network, so that the network state does not preclude the existence of political inequalities among its members. Indeed, all governmental institutions are not equal in the European network. Not only do national governments still concentrate much decision-making capacity, but there are important differences of power between nation-states, although the hierarchy of power varies in different dimensions.

However, Castells explains, regardless of these asymmetries, the various nodes of the European network state are interdependent on each other, so that no node, even the most powerful, can ignore the others, even the smallest, in the decision-making process. If some political nodes do so, the whole system is called into question.

The Fundamental Contradiction Introduced by the United States Attempt at Sovereign Unilateralism

What is described by scholars as the ‘return of the state’, the United States’ policies, foreign and domestic, in the aftermath of the 9/11 terrorist attack changed the political management of the twenty-first century world. The United States established itself what Javier Solana describes as the last sovereign nation-state.

In fact, the United States acted in a way that demonstrated it superiority in terms of economic, military, and information technology powers. Within weeks, it toppled the regimes that supported the terrorists, replaced with US-manufactured democratic models of government. A global coalition against terror was formed around the United States. Homeland security measures increased. It acted as what George Orwell called the ‘Big Brother’ with its increased surveillance not only within the territory of the United States but also in many other parts of the world.

The US attempt at sovereign unilateralism was reinforced with the success of 2003 Iraq war. Though the international community including its allies opposed the invasion, though the United Nations Security Council vetoed it, the United States acted promptly in the war and succeeded quickly with minimum loss on US side. The Iraq war confirmed the possibilities and success of unilateralism based on technological-military superiority. The United States, having both, and superior among the world community, demonstrated the success of unilateralism.

The return of the nation-state in the form of US policies of unilateralism and holder of the monopoly of violence, however, ran against the structural trends evolving toward a new world of global networks. In the words of Castells ‘instead of a network state learning to enact global governance, we are witnessing the unfolding contradiction between the last imperial hurrah and the first truly interdependent world.’

Towards Conclusion

Political systems have been responding to various challenges brought to it by various forces in different historical contexts. From middle ages to the eighteenth and nineteenth centuries to twentieth century, the state has transformed to different forms. In the present historical context as well, the state has transformed to a new form and this latest form of the state is described by Castells as the network state. This transformation of the nation-state of the modern age to the network state is explained by Castells as the response of political systems to challenges of the historically familiar yet unfamiliarly dramatic process called globalization.

The general reaction to globalization in the information age was the opinion and even argument that the nation-state is declining. However, the argument holds on that the states do not decline but it transforms; the state may lose some of its autonomy, but it will retain its influence. In short, there is no question of the demise of the state in this particular historical context.

In the words of Castells, there he saw new trends in political systems around the world. And, what he observed, along with the emergence of these new trends, was ‘the persistence of nation-states and their transformation as components of a different form of state able to operate in the new historical context by managing the challenges to the traditional nation-state by the opposing processes of globalization and identification: globalization of wealth and power, identification of culture and representation.’

This new form of state described here as the network state is characterized by shared sovereignty along a network. ‘While the core of political power remained in the nation-states, their actual decision-making process became characterized by a variable geometry of co-sovereignty, involving a plurality of actors and institutions depending on the issue and the context of each decision to be made.’

This new form of state is best represented by the European Union. And, the most fundamental contradiction is presented by the United States.

On the other hand, ‘it is erroneous to counterpose globalization to the state; the reason for the false counterposition of the state and globalization is that the debates rest on inadequate theorizations of the state.’

What we can finally put is that globalization does not bring the demise of the nation-state but a transformation of it into a new form. This new form of the state is understood here as the network state. The network-state has its sovereignty, though shared; it has its influence over its population; and it has not entirely lost its regulatory function as well. In an age characterized by international interdependence, actual sovereignty can only be accrued by losing autonomy. And, this is possible in the network state, not in the nation-state defined by Bodin’s conception of sovereignty and unbreakable territory. The network state at best represents a form of collective assertion of sovereignty at the price of reducing autonomy.


Note: This was my paper for Development and Globalisation, Masters Course, CPS, JNU.


Castells, Manuel

Ip, Eric C., “Globalization and the future of the law of the sovereign state,” I.CON (2010), Vol. 8., No. 3, pp. 636-655.

Mann, Michael, “Has Globalization Ended the Rise and Rise of the Nation-State?” Review of International Political Economy, Vol. 4, No. 3, The Direction of Contemporary Capitalism (Autumn, 1997), pp. 472-496.

Shaw, Martin, “The State of Globalization: Towards a Theory of State Transformation,” Review of International Political Economy, Vol. 4, No. 3, The Direction of Contemporary Capitalism (Autumn, 1997), pp. 497-513.

Spruyt, Hendrik, “The Origins, Development, and Possible Decline of the Modern State,” Annual Review of Political Science, 2002, 5:127-49.

Stiglitz, Joseph, “Globalization and the economic role of the state in the new millennium,” Industrial and Corporate Change, Vol. 12, No. 1 (2001, 2003), pp. 3-26.

Strange, Susan, The Retreat of the State: The Diffusion of Power in the World Economy, Cambridge University Press, 1996.

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