Read the following passage carefully and answer the questions:
At the most simple level, globalisation results in an erosion of state capacity, that is, the ability of government to do what they do. All over the world, the old ‘welfare state’ is now giving way to a more minimalist state that performs certain core functions such as the maintenance of law and order and the security of its citizens. However, it withdraws from many of its earlier welfare functions directed at economic and social well-being. In place of the welfare state, it is the market that becomes the prime determinant of economic and social priorities. The entry and the increased role of multinational companies all over the world leads to a reduction in the capacity of governments to take decisions on their own. At the same time, globalisation does not always reduce state capacity. The primacy of the state continues to be the unchallenged basis of political community. The old jealousies and rivalries between countries have not ceased to matter in world politics. The state continues to discharge its essential functions (law and order, national security) and consciously withdraws from certain domains from which it wishes to. States continue to be important. Indeed, in some respects state capacity has received a boost as a consequence of globalisation, with enhanced technologies available at the disposal of the state to collect information about its citizens. With this information, the state is better able to rule, not less able. Thus, states become more powerful than they were earlier as an outcome of the new technology.
1. How does globalisation effect on state capacity?
2. How have multinational companies effected the states?
3. How does the old welfare state react to globalisation?
