Which of the following statements is correct about the 'political' consequence of globalisation?

A- Due to globalisation, the ability of governments to do what they do is eroded.
B- The old ‘welfare state’ is now giving way to a more minimalist state.
C- In place of the market, it is the welfare state that becomes the prime determinant of economic and social priorities.
D- Due to globalisation, the ability of governments to do what they do is increased.

Choose the correct answer from the given options:

A and B

The correct answer is Option 1- A and B

Given STATEMENTS:

A- Due to globalisation, the ability of governments to do what they do is eroded. (CORRECT)
B- The old ‘welfare state’ is now giving way to a more minimalist state. (CORRECT)
C- In place of the market, it is the welfare state that becomes the prime determinant of economic and social priorities. (INCORRECT)
D- Due to globalisation, the ability of governments to do what they do is increased.  (INCORRECT)

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 lead to a reduction in the capacity of governments to take decisions on their own.