What is International Political Economy?

If one were to find out a possible way to address the problem of asymmetry, one has to understand if states really are dichotomized, in terms of development. Karl Magyar’s proposal in his work, Classifying the international political Economy: a Third World proto-theory, argues that states are not classified in just two categories, but instead seven, whereby the Third World is broken down into five categories. The first of the seven are the First World (A States). These are the members of the OECD, industrialized, liberal democracies.

They have achieved economic modernization and may wage conventional wars to have access to raw materials. The second one is Third World, newly industrializing countries or NICs (B States). They are usually identified as East Asian states and are paternalistically state-led, like Japan. The third one are Third World, major surplus oil producers/exporters (C States). They view themselves as highly vulnerable, hence, they invest in heavy armaments to protect themselves from states from external military intervention. The fourth kind are Third World, economic growth exceeds population growth rates (D States).

These states are hopeful examples of the developing world as they achieve some form of development. Their next hurdle is to get over the growth rates of their trading partners, as their economies remain to be dependent on export of primary products. The fifth kind is Third World, economic growth equals population growth rates (E States) and the sixth one is Third World, economic growth is lower than population growth rates (F States). And lastly, Transitional societies (G States), which are states from Eastern Europe and those emerging from the Soviet demise (Magyar, 1995).

Be that as it may, this paper takes on another approach that talks about how the gap between rich and poor countries may be bridged. Jeffrey Sachs “End of Poverty”, talks about the various facets and reasons as to why extreme poverty exists. By extreme poverty, Sachs means the incapability of a household to provide for their basic needs (Sachs, 2005). One might think how this discussion at a micro level be important in this essay. Bringing it back to the scope of international political economy, through the years there have been changes in the way its scope is defined.

As stated earlier on in this paper, IPE does not limit itself to discussions on high politics, but also includes things that are relevant in everyday lives (Vaarala, 2007). This is coincides with the way Jeffrey Sachs discusses the issues pertaining to extreme poverty. For him, solving the huge gap between the developed and developing world, starts at the alleviation of lives of states’ constituencies from extreme poverty. As a matter of fact, when he identified the sources of extreme poverty, he did not just focus on trade and high politics but instead came up with metrics that were quite more grounded.

He enumerated eight possible reasons why extreme poverty prevails in a lot of countries, namely: the poverty trap, fiscal trap, physical geography, governance, cultural barriers, lack of innovation, geopolitics and the demographic trap. Each one of these talk about a certain nuance to a country, such that while one or two are the same of one country, having differences in the three other of the metrics might render the two countries far from being the same. Going back, Sachs proposes another method called Clinical Economics.

The main gist of the proposition is that the nature, causes and effects of poverty vary across the areas that it inflicts (Sachs, 2005). Being so, he argues that a remedy given to one cannot be applied to the other, even if they seem to have the same physiological make-up (this is in analogy to a sick patient) (Sachs, 2005). In fact, what might make one country well, might make the other worse off. This is an interesting theory, because it implies that even in Maygar’s further breaking down of the composition Third Worlds into subcategories, what may work for one, say D state, may not work for another D state.

To an extent, this is probably why the structural adjustment programs of the International Monetary Fund (IMF) did not serve most countries well, as it was a blanket policy that was insensitive to the nuances of each country. Alongside these “tailor-fit” medications to extreme poverty, Sachs also asserts a holistic approach in dealing with poverty. He asserts that there should be several things that can be done to help a country slowly rise out of poverty.

He enumerated the following: foreign donors, debt cancellation, and help from international institutions like the United Nations (Sachs, 2005). This lends to neoliberal theories on global governance. Neo-liberalists suggest that peace and prosperity can be achieved by having states pool their resources in a cooperative attempt to create integrated communities to promote economic growth (Lamy, 2001). Now, this assertion has not gone uncriticized but, it does not go for sure either that it goes without merit. Conclusion

Solving the world’s problems, especially those that concern a wide range of world constituency, such as international political economy, is definitely not easy. And a lot of theoretical mining and empirical tests are needed to come up with hard face facts that will prove or disprove propositions on how to completely eradicate poverty or inequality. But what this essay has shown is that the scope of international political economy has indeed acknowledged the importance of taking into consideration other global issues, apart from those considered as high politics.

The problem of inequality is something that deserves much attention. Secondly, the seeming dichotomy between the North and the South (developed and developing nations) is something that shows asymmetry in terms of opportunities for development. To a large extent, the relationship established between the two has been one-sided, in terms of benefits. While this relationship remains to be generally true, it does not mean however that there is no need for further re-evaluation of the context it operates in.

Studies coming from the perspective of the so-called Third World have shown that the developing world can still be further subdivided into other clusters that interact differently from each other. Being so, the approach to bridge the gap between and among nations of this nature, need to have a more streamlined approach and hence, would vary per state category. Lastly, while these categories are relatively more nuanced than the dichotomies, they still are said to be insensitive to the problems that need to be addressed.

The view of Jeffrey Sachs shows how much work needs to be poured into the forming of the solutions against poverty and inequality.

REFERENCES

Broad, Robin. 1996. 'Whither the North-South gap? ' Third World Quarterly, 17:1, 7 – 18 Globaled. uconn. edu. 2006. ‘International Political Economy. ’Available at http://www. globaled. uconn. edu/winter06/International%20Political%20Economy. htm Hettne, Bjorn. 1992. What is International Political Economy? In Helena Lindholm (ed. ), Approaches to the Study of International Political Economy, pp. 135. Goteborg: Padrigu Papers.