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In terms of a discussion of international relations there are two types of sovereignty: internal and external.

Internal sovereignty is pretty straight forward. Each state is seen to have a ruling government. This ruling body is deemed to have sovereignty over its internal domestic affairs. And all governments, regardless of the form they may take or how they deal with internal conditions, reject foreign interference in their internal affairs.

External Sovereignty is a state's right to define its interests. That means that a states sets its objectives, priorities, and how to pursue achieving them. The formation of alliances, the use of force (it is worth noting that - by my understanding - under international law that the state is the only entity possessed of a legal right to use force - which could open a debate on certain recent actions by NATO, though common law may accept what is not clearly defined and you could argue that the actions of the alliance were the collective exertion of several states external sovereign will), and trade are all examples of functions of external sovereignty.

Internal sovereignty is usually only threatened by pressure from another's external sovereign pressure (i.e., losing a war will frequently ruin your day). Of course, this is not to say that internal sovereignty cannot be dependant on external conditions. Small (be they physically small or militarily weak) states frequently have much of their internal control mitigated by pressures from larger states.

Internal and external sovereignty are both exercised by a state's government. Those empowered by a state to handle affairs of state - internal or external - make decisions in accordance with their ruling laws which then are binding accordingly on all parties.


Games Nations Play, 6th Ed. 1987, John Spanier is really an excellent book to keep to hand for reference in these matters.