Gregory Harmon

The state plays a very important role in international political economy and is considered the ultimate decision maker in both economic and political decisions. International Political Economy (IPE) is on the interaction between state and market. power based on tangible and intangible, or military and economic power, the world can be divided into two blocs: the North and South. The north contains the country who are very powerful and strong, militarily, economically and politically: while the South is characterized by the weakest and the least developed countries and poor countries in the world whose economy is weak, governments and military. IPE and international relations (IR) researchers also characterized the North as "Center" and South "periphery". In the era of contemporary globalization, States (with particular reference to powerful states) are the main players in the ECI. There are many institutional arrangements such as the International Monitory Fund (IMF), World Bank, World Trade Organization (WTO), and some other global, regional and bilateral IR serving as platforms for states to come together and work for the proper functioning of the ECI. It is pertinent to stress that, although the North has the largest economy in the world and dominate the major economic institutions, but the South is composed of a majority of the population and can not be ignored because of the IPE some emerging powers such as North China, Brazil and India. However, in this anarchic world where each state is sovereign and there is no sovereign authority over state actors hegemonic and powerful as the United States of America (USA) will never give up their dominant position in the world and uses both economic and political means to pursue their goals and in the world. There are different theoretical perspectives in IR such as liberal, constructivist structural and realistic used for economic analysis and policy. But the realistic approach is used in the following analysis of the IPE and North-South relations in terms of the disadvantaged position of the South are closely scrutinized. In this anarchic world state is assigned a dominant position in spite of increasing globalization, where the major international organizations are composed of states of North and South. However, it is also pertinent to note that developing states have not been able to exercise their sovereignty and self-determination.

The importance of the IPE

In international politics, the state is the main actor plays a crucial role in the ECI. Arguably, the current era of globalization with many international institutions and agreements like the WTO, IMF, regional agreements like the European Union (EU), multinational corporations (MNCs), such as Nokia , Gazpom, General Motors (GM), Internet, media, pressure groups, etc. have reduced the state power. However, the state still plays a very important role in the political and economic IR that States are responsible for final decisions in international organizations (IOs), being of their members and decision makers. It should be noted that developing countries are the main shareholders, therefore, exert considerable influence in major decisions of international financial institutions (IFIs). Anderson et al. argue that no American political interests often undermine the purposes of loans and foreign policies of aid distribution of international financial institutions like the World Bank in general. Their said for the fight against poverty and the development of developing countries in the South are often been compromised in the face of the interests of the United States (Anderson, Thomas Barnebeck Hansen & Henrik Markussen, Thomas (2005). As such, there are clear cases of decisions of the World Bank loan which he provides loan to Pakistan, influenced by U.S. political interests. As such, the World Bank official development assistance to Pakistan tripled from 226 million in 2001 to $ 860 million in 200.