Discuss the factors responsible for the changing nature of states in contemporary industrial societies and explain its impact.

Factors responsible.

• Globalisation of production and finance. Capital mobility constrains tax and regulatory choices, and value chains cut across borders, so the territorial fit between economy and state has broken.
• The neoliberal turn. From the 1980s the state moved from producer to regulator — privatisation, independent central banks and regulatory agencies, and contracted-out delivery.
• Supranational and sub-national transfer. Powers moved up to bodies like the European Union and the WTO, and down through devolution and decentralisation, producing Rosenau's fragmegration.
• Technology and the platform. Private firms now govern speech, payments and data infrastructure that were once public or unregulated.
• Post-industrial social change. Ageing populations, service employment and the fiscal crisis of the welfare state described by O'Connor.
• New security demands. Terrorism, pandemics and climate have expanded the state's surveillance and emergency functions.

Impact.

• Hollowing out, not withering away. Jessop's argument is that the Keynesian welfare national state has been replaced by a Schumpeterian competition state, whose purpose is to make the territory attractive to investment rather than to insure citizens.
• Regulatory state. The state's power is now exercised through rule-setting and enforcement rather than ownership, which requires expertise it often lacks.
• Legitimacy strain. Voters can change governments but not policies whose parameters are set elsewhere, and the resulting sense of unresponsiveness has fed populist and sovereigntist politics — Brexit is the clearest instance.
• Inequality. Bargaining power shifted from labour to capital, and the state's redistributive capacity fell as tax competition intensified.
• The re-turn of the state. The 2008 crisis, the pandemic and industrial policy in semiconductors and clean energy show that when markets fail catastrophically, only the state can act — Mazzucato's entrepreneurial state.

Judgment. The state has not weakened uniformly; it has lost economic control and gained coercive and infrastructural reach.