Has globalization limited the state’s ability to raise tax revenues needed to pay for more generous social guarantees? Opinion on this point is divided. Some analysts have suggested that globalization has undermined the fiscal capacities of states (McKenzie and Lee, 1991; Steinmo, 1994). Other studies have argued that so-called ‘big government’ can be quite compatible with globalization (Rodrik, 1998; Garrett, 2001) and that taxation of business remains as viable as ever (Swank, 1998). Both sides in this debate have tended to define globalization as liberalization, so that the argument concerns the consequences of certain policies towards globalization rather than globality (as transplanetary connectivity) per se. In this sense the implications of greater transworld relations for state provision of welfare are perhaps more a question of policy choice than the new geography as such. Needless to say, stronger and wealthier states have far more scope to make such choices than weaker and poorer states, so that globalization would sooner constrain government fiscal positions in the South than in the North.