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Politics in a Small World 71

number of developing countries are still bound to pay back escalating
debts that were loaned by the IMF in the 1960s to develop modernization
projects (dams, roads, airports), often to corrupt and unscrupulous politi-
cians, and with little regard for their feasibility and long - term benefi ts.
States are bound to make serious reductions in public spending if they are
to pay back what is known as “ odious ” debt, irresponsibly offered and
promoted by the IMF. Fourth, global economic governance may even on
occasion involve direct intervention in the internal affairs of states. For
example, the IMF may grant fi nancial assistance to governments who ask
for it under conditions which the government in question may have no
part in negotiating. Although the IMF offi cially prefers to negotiate
Structural Adjustment Programs with governments, the extent to which
it actually does so is largely governed by that state ’ s size, reputation, and
importance to the global economy. As David Harvey points out, the
enormous foreign debt of the US (to other states, especially China and
Japan) would make it a macro - economic basket - case under IMF rules,
and subject to intense pressure to restructure its economy (Harvey, 2005 :
72; see also Sen, 1999 ; Chomsky, 2000 : 101 – 7; Tonkiss, 2005 ).
“ Sovereignty ” concerns political authority, the “ right to exercise the
powers of the state and to determine the rules, regulations and policies
within a given territory ” (Held, 1995a : 99 – 100). The word “ sovereignty ”
sums up ultimate state authority, what authorizes the state to have
the “ last word ” within its own territory (Montgomery, 2002 : 5). As
the formal right to exercise authority, sovereignty differs, then, from
state autonomy, which concerns the actual capacities of states for inde-
pendence from others. A relatively simple idea, the practice of sovereignty
is highly complex because of the way in which external sovereignty,
ensured by international law that prohibits other states intervening in
domestic affairs, is intrinsic to, but not the same as, internal sovereignty,
the jurisdiction of states over their own territories and populations.
Furthermore, the history of sovereignty is highly contested, and how it

is understood makes a significant difference to how sovereignty is seen
today.
Political cosmopolitans see state sovereignty as integral to the modern
international state system, known as the Westphalian order, after the
Treaty of Westphalia that inaugurated it in 1648. According to Held, this
system supported the exclusive right of each nation - state to rule over its
citizens and to conduct its own internal and external affairs without

intervention (Held, 1995a : 38 – 9; 2002). A difficulty with this view of
history is that formal Empires – of the kind conducted by the British in
India, which involved directly governing inside state territory – have then