The previous chapter examined the impact of economic globalisation on structural power and its subsequent implications for social policy. This chapter shifts the focus to political globalisation – the extension of political power and political activity across the boundaries of the nation state (Held et al, 1999, p 49) – and investigates its impact on corporate agency power before examining, in more detail, the social policy agenda of international business. This is important, since international business opinion helps to shape social policy discourse and welfare outcomes at various levels of governance.

Globalisation, Europeanisation and corporate agency power

Should globalisation have had the effect of increasing structural power, as the previous chapter has argued, we might conclude that under these altered conditions, business is less likely to resort to agency in order to influence national governments. However, such a conclusion would not accurately reflect the political activities of business at the supranational and international levels during the 1980s and 1990s. Capitalists are today better organised and have stronger voices at these levels than ever before. Several factors have been at work here. First of all, supranational and international governmental organisations, the most important of which are the EU, the North American Free Trade Agreement (NAFTA), the IMF, the World Bank and the WTO, have played an increasingly important role within the globalising world as a result of what Stiglitz (2002, p 42) refers to as “mission creep”, where organisations have become responsible for a growing number of policy areas that go beyond their ‘core’ areas of competency. This is true of the World Bank and IMF in particular, which have increasingly widened their focus beyond macroeconomic policy to include, within their remit, public policy and privatisation, pensions and labour markets (Stiglitz, 2002, pp 42-3). Even more importantly, Europeanisation has meant closer economic and political union where member states have forfeited sovereignty and their ability to veto policy proposals in many areas. In such contexts, national lobbying alone has proved increasingly ineffective; business has had to coordinate its efforts at the international level in order to avoid the risk of unfavourable policy outcomes and in order to steer policy making towards its own agenda.