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31 Law & Pol'y Int'l Bus. 1317 (1999-2000)
Globalization and Conditionality: Two Sides of the Sovereignty Coin

handle is hein.journals/geojintl31 and id is 1329 raw text is: GLOBALIZATION AND CONDITIONALITY: TWO SIDES OF THE SOVEREIGNTY COIN MARY C. TSAI* I. INTRODUCTION From the ruins of World War II, the international community created the International Monetary Fund (IMF) and World Bank, acknowledging the growing interdependence of international eco- nomic markets. In recent years, the globalization of international financial markets has been accelerating rapidly, resulting in the poten- tial for massive capital withdrawals from a country's financial markets and infrastructure. In an attempt to battle this contagion, IMF and World Bank (or the Bank) financing have been conditioned on prom- ises by the recipients to change their domestic economic policies. This Note explores the implications of globalization and conditionality on state sovereignty through the prism of the Asian financial crisis. Part I explores the concept of sovereignty and its relevance to international law. Part II discusses the role of the IMF and World Bank and the methods of financing used by each. Part III recounts the recent Thai and Russian monetary crises to illustrate the phenomena of globaliza- tion and conditionality. Lastly, Part IV returns to the subject of defen- sive and affirmative sovereignty and argues that globalization and conditionality represent a threat to state sovereignty. II. Sovereignty: The Sovereign Commands and Is Uncommanded., State sovereignty lies at the core of international law. According to classical definitions, sovereignty involves three characteristics: (1) the State's supremacy over domestic matters; (2) the State's exclusive right to regulate its territory and citizens; and (3) the State's right to guide its internal and external affairs without foreign interference.2 A state has unlimited control over its policies and its citizens both within and outside its jurisdiction. Sovereignty, therefore, is the power which... enables an entire body politic to exercise some control over its des- * J.D. Candidate, expected 2001, Georgetown University Law Center. B.A., 1997, University of California at Berkeley. 1. Steven Lee, A Puzzle of Sovereignty, 27 CAL. W. INT'L L.J. 241, 247 (1997). 2. See MAGDALENA MARTIN MARTINEz, NATIONAL SOVEREIGNTY AND INTERNATIONAL ORGANIZA- TIONS 64 (1996). 1317

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