| Summary: | It has been frequently argued that under globalisation, the state's ability to make
autonomous decisions declines and the state withers away as it adapts to the
lowest common denominator of taxation and social services in order to attract
global investment flows. This paper challenges the withering-state theory. States
are not hapless victims of globalisation, but active facilitators. Through the case
studies of Vietnam and Malaysia, it is demonstrated that the state makes decisions
about globalisation—either to engage in it or to retreat from it—based on the
state's perceived interest. Moreover, the state is perfectly capable of reversing
these decisions as state interests change over time
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