Theoretical review of globalization thesis: Capital mobility and the state

The purpose of this paper is to analyze the present understanding of the political economy of globalization, in particular the globalization of capital. In the contemporary age, the regulatory capacity of the state seems to stand in a different relation to the transnational capital because its space is not bound by conventional jurisdictions. This paper closely examines how the transnational capital influences the politics of the state. It takes the increasing capital mobility as one of the key features of globalization, and explores the impact of capital mobility on politics in relation to the convergence and divergence debates among scholars. It deals in detail with the impacts of globalization on monetary autonomy of the state, on financial market governance, and on labor market governance, and discusses how capital mobility influences the politics of the state, enforcing the power configuration among the state, capital, and labor.