10-9-2002

GLOBALIZATION AND ITS DISCONTENTS, by Joseph E. Stiglitz

Accusing the IMF

Bad faith

Jun 6th 2002
From The Economist print edition

Globalisation and Its Discontents
By Joseph E. Stiglitz

Norton; 282 pages; $24.95.
Allen Lane; £16.99

HERE is an author superbly qualified to write the definitive account of globalisation—its opportunities, its perils and the demands it places on governments. Joseph Stiglitz is an eminent theoretical economist, winner of last year's Nobel Prize. He was chairman of Bill Clinton's council of economic advisers, and chief economist at the World Bank. Yet Mr Stiglitz is no compliant insider. He left the Bank under a cloud after quarrelling with officials in the International Monetary Fund and America's Treasury. Since then he has published a string of articles questioning conventional thinking on development.

So Mr Stiglitz has the knowledge—practical and theoretical—as well as the independence of mind to produce a really outstanding book. The puzzle, then, is how he ever came to write this one.

Forget the title, for a start. This is not a book about globalisation—not considered in the round, at any rate. Mostly, it is an extended assault on the IMF. What the Fund did in Russia during the 1990s, or in East Asia during the crisis of 1997-98, is no small or unimportant matter. But this sets exceedingly narrow limits on the questions the book purports to address.

Where are the chapters on trade and growth, on trade and wages, on trade and unemployment, on global income inequality, on the digital divide, on market forces and the environment, on multinational monopoly, on intellectual property, on migration, on cultural imperialism—on any of the issues, in fact, that most animate the anti-globalist protesters and their far more numerous armchair sympathisers? The merits of globalisation do not rest on whether the Fund was right to call for higher interest rates in East Asia during its attempts to stabilise the region's economies after 1997—the issue that most excites Mr Stiglitz. In fact, these things have almost nothing to do with each other.

Suppose, however, that the book had been more accurately entitled, “The IMF and My Discontent”. How does it measure up against this more modest ambition? Not as well as it should. People interested in the subject will have to read it, certainly: Mr Stiglitz is too good an economist to ignore, and the arguments he advances on the mainly technical matters he addresses have real weight, as you would expect. Yet even as an essay on the failings of the IMF, the book has terrible flaws.

Those who prefer their reading matter to have been edited, for instance, will feel badly let down. Mr Stiglitz's prose reads like a draft dictated to a secretary whose mind was apt to wander: readers too will be drifting off a lot. Also, the narrative conveys a whining self-righteousness that is always tiresome and sometimes downright repellent. The book's dedication thanks the author's parents for teaching him to care. If only others had been taught to care, Mr Stiglitz seems to say, this book would not have been necessary.

And the problem with the knaves at the IMF and the Treasury is not just that they are heartless and incompetent. In an extraordinary paragraph, the book all but accuses Stanley Fischer, the Fund's deputy managing director during the years in question, of corruption: he inflicted needless punishment on borrowing countries, Mr Stiglitz implies, in return for a nice fat job with Citibank, whose interests that policy served. The author himself knows this is rubbish. Mr Fischer—no less eminent an economist than Mr Stiglitz, by the way—is a man of (hitherto) unquestioned integrity, admired right across the profession. With assaults such as these, Mr Stiglitz only shreds his own credibility.

The tasks that were dropped in the IMF's lap during the 1990s—sorting out the East Asian mess, helping Russia move from communism to capitalism—were enormously difficult. Mr Stiglitz often succeeds in laying bare exactly why. In explaining the economic interconnections which frustrated attempted remedies, he is at his impressive best. But the point is, setbacks were inevitable.

Mr Stiglitz appears to think otherwise. What if his advice had been followed? Often, that would have been difficult. He believes for instance that Russia should have established the rule of law before abandoning communism. No doubt—but how useful is it to be told that? It is equally fatuous to suppose that the Fund got things wrong deliberately, or out of stupidity, or because it was just too proud to heed the plainly superior mind of the author. Mr Stiglitz is a brilliant economist—and he cares, he cares. But not even he could have delivered Russia from communism to capitalism without pain.

FOREIGN AFFAIRS

The Globalization Wars: An Economist Reports From the Front Lines
By Barry Eichengreen

From Foreign Affairs, July/August 2002

Globalization and Its Discontents. By Joseph Stiglitz. New York: W. W. Norton, 2002, 282 pp. $24.95.

Barry Eichengreen is Professor of Economics and Political Science at the University of California, Berkeley. His latest book, Financial Crises and What to Do About Them, will be published this fall.

Its melodramatic aspect notwithstanding, this book has a serious point. At its core is a withering critique of globalization, and of the role played by multilateral institutions and their principal shareholders in pressing developing countries to liberalize their economies. Too often, Stiglitz contends, those concerned with economic development have seen economic openness and liberalization as panaceas. He criticizes the Clinton Treasury Department for embracing this approach less because of its analytical merits than because it allowed the department to promote policies helpful to U.S. commercial and financial interests. Instead of progress, he argues, the result has all too often been devastation. Developing countries that have opened themselves to trade, deregulated their financial markets, and abruptly privatized national enterprise have experienced more economic and social disruption than growth. Foreign direct investment has destroyed potentially viable domestic companies. And liberalized international finance has made emerging-market economies more vulnerable to erratic shifts in investor sentiment without conferring any visible benefits.

Stiglitz's account also raises questions about the moral and professional obligations of economists in government and international organizations. Academics on leave, he argues, seduced by plush offices and first-class travel, may lose sight of their original motivation for public service -- namely, to enlist science in the pursuit of human betterment. And international civil servants often have to choose between dissent and professional advancement. This is where tenure is valuable: if taking on the bureaucratic status quo gets a professor into political hot water, he or she can always retreat to the ivory tower.

But an official who publicly criticizes the policies of his or her agency without resigning in protest risks damaging its effectiveness. Doubts will arise about whether the members of its management team are on the same wavelength. Stiglitz's oft-reported criticisms of the Bretton Woods institutions were newsworthy precisely because he went public without resigning as the World Bank's chief economist and because they therefore raised questions about the competence of these agencies. To be sure, the author was less critical of his own employer than he was of the IMF, its sibling organization across 19th Street in Washington. But the multilateral institutions must work as a team to help financially distressed countries regain the confidence of the markets, which requires confidence in their own actions. Thus there is no finessing the point.

MR.STIGLITZ GOES TO WASHINGTON

These are the key issues posed by Stiglitz's entertaining, insightful, and well-written book. It is hard to think of anyone better placed to raise them, not just because of the author's practical experience but also because of his scholarly stature. Now at Columbia University, Stiglitz was prominent for his contributions to the economics of "asymmetric information" even before sharing the Nobel Prize in economics last year.

As the phrase implies, asymmetric information exists when one party to a transaction knows more about its characteristics than does the other. Among the theory's applications are some that yield important insights into the operation of financial markets. These show, among other things, that interest rates cannot always be counted on to balance the supply and demand for money and credit, that financial stress can undermine the stability of the economy as a whole, and that financial liberalization does not necessarily result in a more efficient and rational allocation of resources.

One suspects that Stiglitz's years of research not only shaped his analytical outlook but also gave him a stake in seeing his ideas taken up by policymakers. Thus when officials proposed at the 1997 IMF-World Bank meetings that the deregulation of international capital flows be made obligatory for IMF members, he vigorously dissented. It is similarly understandable that he reacted negatively when the IMF recommended interest-rate hikes to restore balance to the countries caught in the Asian financial crisis.

With the benefit of hindsight, most economists now agree that Stiglitz's warnings about the dangers of precipitous financial deregulation were on the mark. Indeed, the meeting in Hong Kong at which officials pushed for making the eventual deregulation of capital flows an obligation of IMF members actually took place after the outbreak of the Asian crisis, seemingly in disregard of that event. Stiglitz regards this poor timing as evidence that the IMF saw a liberalized financial system not as a means to development or stability but rather as an end in itself. (The alternative interpretation, it should be noted -- that the proposal was driven by bureaucratic inertia -- is scarcely more flattering.)

Stiglitz's critique of the IMF recommendation that crisis-stricken countries raise interest rates so as to restore monetary balance, however, remains more controversial. Stiglitz's own work after the crisis seemed to demonstrate that rather than strengthening exchange rates, as the IMF's simple textbook models predicted, higher interest rates weakened them (by placing pressure on banks and firms with heavy loads of short-term debt). But for various reasons not all the skeptics were convinced, and no professional consensus exists on this point even now.

Just as academics do not enjoy all the perks of officials, so officials do not have the intellectual luxury of academics. They must decide before the markets reopen whether to lend money or to recommend increases in interest rates, and they have to rely on back-of-the-envelope calculations, not complex and controversial models that reek of the lamp. The IMF's managers, who also have Ph.D.'s in economics from the best universities, understood that higher interest rates would place pressure on debt-laden banks and firms. And they understood that the resulting adverse impact on investor confidence could, in theory, cancel out any chance that the higher interest rates would bring back capital that had been pulled out. But they questioned whether what was true in theory would be true in practice. They feared that not raising interest rates (and thereby failing to lure back foreign capital) could lead to a weaker exchange rate, causing even more severe distress for banks and firms with debts denominated in U.S. dollars. In short, they were not oblivious to the risks Stiglitz highlights, but they felt that the other risks were even greater.

CAPITAL CONTROL GANG

Acknowledging the critic's obligation to offer an alternative, Stiglitz suggests that the IMF should have recommended restrictions on the freedom of residents and nonresidents to withdraw money from banks and to take funds out of a crisis country. Such controls, he claims, can prevent a panic from doing irreparable damage to financial markets and need not diminish a country's growth prospects. As evidence, he cites the case of Malaysia, arguing that controls worked well there when Prime Minister Mahathir bin Mohamad imposed them in 1998.

This assessment is controversial, however, and will be even more so now that Argentina's application of the remedy has had no palliative effects -- if anything it has only made that country's crisis worse. Indeed, rather than preventing crises, repeated recourse to capital controls may only increase their frequency. If investors know that the authorities will reimpose controls at the first sign of trouble, any minor uptick in volatility may prompt a rush for the exits.

Stiglitz is hardly unaware of this critique, and he does not suggest that countries liberalizing financial markets should restore controls at the first sign of trouble. Rather, he urges governments to think twice about deregulating capital flows in the first place, arguing that neither theory nor experience suggests that the benefits of such liberalization exceed the costs.

But such advice is problematic if one believes that financial liberalization is important for financial development. Financial markets do not materialize out of thin air. Markets must be allowed to operate to acquire depth and liquidity. Only by competing against and copying foreign rivals will banks and corporations learn to protect themselves against financial volatility. This is the basis for the argument that competition -- achieved by liberalizing prices, privatizing public enterprise, and opening the economy to international transactions -- is a key ingredient of economic and financial development.

Stiglitz's counterargument is that deregulation will not promote financial development when information is asymmetric and competition is inadequate. There is no guarantee that financial liberalization will enhance economic efficiency, nor that privatization will guarantee competition. Privatization without adequate regulatory oversight, for example, may allow a few formerly state-owned enterprises to dominate the economy. It will spur corruption and create an oligarchic elite that opposes the emergence of competitive markets.

That Stiglitz should display these concerns is not surprising. They were themes of his Wicksell lectures at the Stockholm School of Economics, published in 1994 as Whither Socialism? Those lectures can be read as a warning against precipitous privatizations such as those that were carried out in Russia. The partisans of the pro-liberalization "Washington consensus," he continues to stress, overlooked the importance of economic and corporate governance, underestimated the difficulty of building institutions, and forgot that many countries lack the sophisticated public administrations needed to ensure adequate competition. A Californian still recovering from the botched deregulation of his state's electricity market feels the author's pain.

But liberalization and market opening must be more than economically efficient, Stiglitz goes on to observe -- their consequences must also be socially acceptable if they are to endure. Sustainable development thus requires not just liberalization and privatization but also initiatives to ensure that all of society shares in the benefits. The IMF, he argues, has failed to heed the consequences of its own advice for social and political stability. By insisting that governments privatize quickly, it neglects the negative impact on the distribution of wealth. By demanding austerity while insisting on liberalization, it disregards basic social needs. And by forcing elected officials to violate their social contract with their citizens in the name of fiscal balance, it undermines the legitimacy of governments and the very process of market liberalization to which it attaches such value.

THE DEVELOPMENT GAME

The impression left by Stiglitz's discussion is that the IMF is blissfully unaware of the importance of the social and political sustainability of its policies. Although this critique may have once contained a kernel of truth, it is no longer accurate. Hard experience has taught the IMF that reforms that do not produce growth will not be politically sustainable. Even a country with seemingly stable finances may experience a political and economic crisis if growth peters out and hardships mount, as was so visibly the case in Argentina last year.

The real question, then, is not whether shared growth should be a priority, but how best to achieve it. The IMF tends to view two steps as essential: immediate inflation stabilization and the elimination of structural barriers to market efficiency. The institution's critics, including Stiglitz, question whether programs that entail such radical dislocations are politically sustainable.

The IMF, of course, is a latecomer to the development game. For a long time it concentrated on the monetary, fiscal, and exchange-rate policies that were central to its mandate of preserving balance-of-payments stability. The irony here is that it was precisely its growing concern for the social and political sustainability of policies that led the IMF to devote more attention to the prospects for growth, and hence the need for structural reforms. Stiglitz's criticisms of the particular ways in which the IMF has sought to restart growth in crisis countries may be right or wrong, but his charge that it has been oblivious to the importance of growth for the sustainability of its policies is simply not true.

Stiglitz criticizes the IMF's practice of making its loans conditional on structural economic reforms in emerging-market economies. In his view, its conditions emphasize their structural weaknesses, thereby inadvertently undermining investor confidence. But a politically and economically sustainable solution to the financial problems of a crisis country requires putting the country back on the path of growth. This means recapitalizing the banking system so that lending can start up again, and reforming regulatory oversight so that similar problems will not recur. It means developing bankruptcy procedures capable of clearing away the burden of nonperforming corporate debts so that firms can start investing again. Stiglitz appreciates the need for these and other structural responses to financial crises, but his doubts about the IMF's competence lead him to reject them as conditions in its lending packages. By advocating that conditionality be abandoned rather than streamlined or more focused, however, he risks throwing the baby out with the bath water.

Stiglitz's doubts about the IMF's capabilities in such matters stem from the fact that its staff members are trained in the techniques of macroeconomic and financial analysis, not the sociology and politics of economic development. He describes how World Bank economists (the putative experts on such questions) were increasingly relegated to carrying the IMF's baggage. He reports how on more than one occasion the IMF refused even to discuss the merits of its recommendations with World Bank officials, even though the two organizations had joint responsibility for carrying them out. One can imagine how this rankled, especially given the author's prior experience in the Clinton White House, where the Council of Economic Advisers, the traditional repository of economic expertise, was increasingly marginalized by the lawyers and financiers of the National Economic Council.

But notwithstanding some passing discussion of life in the executive branch, Stiglitz focuses his book on the problems and prospects of international institutions. He characterizes the World Bank as a "learning organization" but describes the IMF as learning impaired. He portrays the IMF as subscribing blindly to the fundamentalist ideology that the markets know best and as not brooking dissent or engaging in public debate. As he sees it, the IMF encourages its staff to think mechanically in terms of the "financial programming model" taught in training seminars -- a model in which monetary and fiscal policies are shifted to balance supply and demand and in which there is no role for asymmetric information. IMF policies were ill advised, he argues, because IMF economists, operating in an intellectual isolation chamber, mechanically applied a model appropriate for the Latin American debt crisis of the 1980s to the Asian crisis of the 1990s -- and are unlikely to be more creative next time around unless things change dramatically.

Here I must confess to being a not entirely disinterested observer: I spent the year of the Asian crisis as an adviser at the IMF. I arrived on the day of Thailand's devaluation and left on the day of Russia's default. Readers will judge for themselves what was cause and what was effect. The impression I gleaned, for what it is worth, is that the IMF is not immune to self-criticism. It has acknowledged that its advice that Asian countries tighten up their budgets was, at best, excessive. It has admitted that its handling of the banking crisis in Indonesia, when it recommended selective bank closures rather than the wholesale reorganization of the system, aggravated the panic. It has accepted that the conditions it attached to its programs were too numerous and too detailed. The IMF has learned from its failure to foresee how quickly the Asian crisis would spread and from its inability to anticipate how financial markets would react to its interventions. As a result, it has created a new department to focus specifically on capital markets. These are not the actions of an organization unwilling to acknowledge its mistakes or change its behavior. Stiglitz himself, moreover, has a kind word in his final pages for the recent proposal by Anne Krueger, the IMF's first deputy managing director, to create a new mechanism for handling sovereign debt crises -- an example of just the sort of fresh thinking he claims is unlikely to emerge from that organization.

In general, however, Stiglitz remains a skeptic. He argues that the IMF needs to develop a culture of openness that encourages debate, dissent, and learning -- one that facilitates the acceptance of new ideas and the recognition of new problems. He holds up the World Bank as an example of what he would like to see. But contrary to what Stiglitz implies, it is not clear that the IMF's sibling organization is an appropriate model for reforming the multilateral financial institutions. The bank is not exactly renowned for its efficiency. The tendency for its departments to pursue their own agendas notoriously undermines the coherence of its programs. And it does not necessarily welcome public dissent -- just ask former World Bank economist William Easterly, now of the Center for Global Development.

OPEN-DOOR POLICY?

Stiglitz's remaining recommendations focus on the need for greater transparency and better governance of the international financial institutions. But the IMF has already moved in the direction of greater transparency, and how much further it can go is questionable. Not only is the IMF in the business of restoring confidence, which lends a certain delicacy to its deliberations, but it is a trusted adviser to governments. If everything that is shared with the IMF immediately becomes public, governments will hesitate to reveal sensitive information. Similarly, if every warning issued by the fund becomes public, it runs the risk of precipitating precisely the crises that it seeks to avert. These dilemmas are familiar to Stiglitz, who knows more about information economics than anyone on the planet. One wishes, therefore, that he had not only made the case for more disclosure but also told us precisely how much disclosure is healthy.

Stiglitz would undoubtedly acknowledge the need to hold at least some sensitive policy discussions behind closed doors. Thus, his insistence on the need for greater transparency must have another basis: namely, that transparency is the only way to hold the IMF accountable to the countries whose fates it determines. Only if IMF decisions are taken in the light of day will there be any assurance that they are being driven not by the interests of the creditor countries that are the fund's principal shareholders but by the global good. The other obvious mechanism for ensuring accountability -- voting rights on the Executive Board -- does little to confer legitimacy on the IMF in the developing world. Rich countries are disproportionately favored by the fund's voting formula, with the United States controlling the single largest block of votes. This dominance, combined with the secrecy of IMF deliberations, enables the U.S. government to use the fund as an instrument of its own foreign policy -- generally at the expense, Stiglitz argues, of developing countries.

Stiglitz therefore recommends overhauling voting shares in the World Bank and the IMF, along with the procedures for appointing the heads of these organizations. These agents of globalization, he warns, are experiencing a crisis of legitimacy. They can shore up their reputations only by giving greater weight to the countries most directly affected by their actions. Absent mechanisms for ensuring that developing countries have a proportionate say, the rules and procedures that govern the global economy will not be regarded as fair and just.

Like many other points in the book, this one is important. Still, one suspects that effective reform is more complex than Stiglitz suggests in his more populist moments. The issue is not simply the veto position of the United States or ensuring that developing countries are accorded votes proportional to their place in the global economy. Nor is the issue simply the balance between debtors and creditors. Indeed, there is a huge problem of moral hazard in shifting that balance -- that is, in letting debtors become their own bankers and their own bankruptcy judges. This issue rarely surfaces in public, but it lurks in the background of any discussion of IMF reform.

The real problem is the politicization, both real and imagined, of the IMF's economic advice, reflecting the mixed motives of its principal shareholders. My own preferred solution, therefore, would be to try to depoliticize the IMF. Following the model of an independent central bank, the fund's executive directors could be appointed to long terms in office (giving them effective job security) and then prohibited from taking politically motivated instructions from their home governments. This solution would address the objection that the IMF is simply an instrument of U.S. foreign policy, which is what gives rise to the complaint that the fund's decisions are being driven by illegitimate political considerations. Not everyone will agree with this approach, but there clearly is a need to think harder about the governance of the Bretton Woods institutions.

Stiglitz's book makes a compelling case that simple-minded economic doctrine, inadequately tailored to the realities of developing countries, can do more harm than good, and that the subtleties of economic theory are actually quite important for sound policy advice. But simplistic political advice -- give developing countries more voice and the institutions of global governance will be rendered more legitimate and efficient -- is equally problematic. Political reform is as subtle and complex as economic reform. Evidently, the best minds among us have only begun to think about it.

August 15, 2002

Globalization: Stiglitz's Case

By Benjamin M. Friedman

Globalization and Its Discontents

by Joseph E. Stiglitz

Norton, 282 pp., $24.95

 See this review here

Globalisation and its discontents by Joseph Stiglitz

Allen Lane, £16.99, 282pp

The masters of world finance preach austerity for others and practise hand-outs for themselves. Robin Blackburn acclaims an inside view of market meltdowns

10 August 2002

 See this review here

Who does the IMF help most?
(Filed: 30/06/2002)

Geoffrey Owen reviews Globalisation and its Discontents by Joseph E. Stiglitz

Yet globalisation has also suffered some serious setbacks, especially in the past decade. Several countries which had enthusiastically embraced free-market policies have been engulfed in catastrophic financial crises, leading to bankruptcies, unemployment and social unrest. These include Thailand, Indonesia and some other Asian countries in 1997, Russia and Brazil in 1998, and now Argentina.

For Joseph Stiglitz, a Nobel prize-winning economist who has held senior posts in the Clinton administration and in the World Bank, these and other failures indicate that something has gone "horribly wrong" with globalisation. The fault, according to this angry and polemical book, lies with the International Monetary Fund and its principal controller, the US Treasury, both of which are in thrall to a dangerous ideology, "market fundamentalism".

This, in Stiglitz's view, has led the IMF, when countries get into difficulty and ask for support, to impose a "one-size-fits-all" formula which, more often than not, makes the underlying problem harder to solve. Like a colonial despot, the Fund orders governments to stop doing things which prevent markets from working freely - for example, subsidising food for the poor - however essential they may be to social stability.

Stiglitz's main target is the so-called Washington Consensus, which emerged in the 1980s to become received wisdom at the IMF. The three pillars of the Consensus are strict control of government spending, privatisation of state-owned industries, and the removal of trade barriers.

Stiglitz concedes that these policies made a good deal of sense for the Latin American countries for which they were originally designed. But he argues that the IMF has made the promotion of free markets an end in itself, without regard to the sequencing of reforms or their social impact.

He is particularly critical of the IMF's pressure on governments to expose their banking systems to unrestricted competition. He cites the example of Kenya, where IMF-imposed reforms led to a series of bank failures and a damaging increase in interest rates. Encouraging foreign banks to enter developing countries can also be dangerous, he says. Because of their size, they may "squelch the domestic competition", and they are often more interested in lending money to multinational corporations than to small businesses and farmers.

There is a sinister purpose here, Stiglitz suggests: the drive for financial liberalisation does not help developing countries, but it does open up vast new markets for Wall Street. As proof that the IMF dances to Wall Street's tune, he notes the recent appointment of Stan Fischer, formerly deputy head of the Fund, to a senior post in Citigroup, one of the largest New York banks. Was Fischer, he asks, being rewarded for having faithfully executed what he was told to do?

This wild accusation is typical of the overheated tone in which Stiglitz tries to present the Fund and its management in the worst possible light. No one disputes that the IMF has made mistakes, but they do not stem from "market fundamentalism", or the malign influence of Wall Street. As a former IMF official wrote recently, the Fund has to balance two roles, that of sympathetic social worker and that of tough cop, and its weakness - quite contrary to the Stiglitz line - has often been to emphasise the former at the expense of the latter.

In Argentina, for instance, the IMF was at fault for not intervening forcefully enough when government spending began to spiral out of control and, later, for providing massive assistance when the government's policies were clearly not working. But the main responsibility for the Argentine crisis lay with the Argentine authorities; it cannot be blamed on the Washington Consensus.

The Fund is learning from its mistakes, and in some respects is moving in directions which Stiglitz would approve. It is becoming more transparent in its decision-making, and more concerned that developing countries should improve the machinery of government before market-oriented policies can succeed.

This book contains much interesting detail about episodes in which the author was directly involved, but it suffers from an ideological bias of its own: more government, less market, and a deep hostility to big business. As a contribution to the wider debate about globalisation, it is a distinctly one-sided view.

Geoffrey Owen is the author of 'From Empire to Europe: The Decline and Recovery of British Industry Since the Second World War' (HarperCollins).

June 23, 2002, Sunday

BOOK REVIEW DESK

Are You Better Off Now?

By Joseph Kahn

GLOBALIZATION AND
ITS DISCONTENTS
By Joseph E. Stiglitz.
282 pp. New York:
W. W. Norton & Company. $24.95.

Joseph E. Stiglitz was at least nominally part of that inner circle, as Clinton's chief economic adviser and later chief economist at the World Bank. But he now argues that the way the Clinton team pursued American interests overseas was as flawed as the way ''the best and the brightest'' defended national security in the 1960's. Stiglitz's ''Globalization and Its Discontents'' is more of an economic treatise than a narrative critique, and he does not mention David Halberstam's work. But he paints a similar picture of how rampant arrogance, simplistic nostrums and disdain for foreign political realities doomed globalization. He argues that in the hands of the Washington brain trust, globalization became a neoimperialist force that left hundreds of millions of people worse off in 2000 than they were in 1990.

Stiglitz shared a Nobel Prize last year for his work analyzing the imperfections of markets. His main complaint against Rubin and Summers, who served as Treasury secretaries, and against Fischer, the No. 2 official and de facto chief executive of the International Monetary Fund, is that they had too much faith that markets could transform poor countries overnight. He labels these three men market fundamentalists, who fought to maintain financial stability with the same urgency that an earlier generation struggled to contain Communism. Worse, he suggests, they shilled for Wall Street, conflating the interests of the big banks with the financial health of the world.

Sensing a historic opportunity to secure capitalism's victory after the fall of the Berlin Wall, the Clinton team demanded wrenching reform for Russia, Eastern Europe, Latin America, Asia and Africa. The Treasury Department and the I.M.F., which follows the preferences of Washington, its largest shareholder, used huge loans to compel governments to sell off companies they controlled. Even some of the least developed nations were instructed to allow competition in their stock, bond and banking businesses immediately. Aid was withheld if governments spent too much money or protected key industries.

This formula -- predictably, in Stiglitz's view -- led to financial bubbles and collapses in Mexico in 1994 and in Asia, Russia and Latin America from 1997 to 1999. The Clinton experts compounded the error by linking billions of dollars in emergency aid to even deeper concessions in managing trade, monetary policy, banking and privatization. Nearly everywhere this was tried, Stiglitz says, the changes deepened rather than alleviated recessions.

Stiglitz amply illustrates how Treasury and the I.M.F. required nations to sell companies before the time was right. He also makes a good case that the monetary fund was fighting the last war -- the 1970's and 80's battle against hyperinflation -- when it advised developing countries in the 1990's. High interest rates and tight fiscal policies, the standard tools in the fund's medical kit, pleased Wall Street creditors. But slow growth was the problem, not inflation, and high interest rates painfully stifled growth.

John Maynard Keynes had something else in mind when his ideas inspired the creation of the I.M.F. and the World Bank after World War II. Keynes envisioned the fund as an ecumenical force for growth, providing capital to help governments raise output when markets faltered. During the Clinton era, according to Stiglitz, the fund became Hooverite, forcing a failing nation to ''beggar'' itself, as he puts it, to meet the financial and monetary objectives of an inflexible economic orthodoxy. The prescriptions had all the science of a medieval bleeding. ''Not for 60 years have respectable economists believed that an economy going into a recession should have a balanced budget,'' he writes.

Much of the book is devoted to case studies that support this thesis. Malaysia is cited because it rebounded quickly after the Asian crisis despite -- or perhaps because of -- its rebuff to the I.M.F. China has never accepted aid from the fund, but its performance has been miraculous compared with that of Russia, one of the biggest I.M.F. clients. Russia produced two-thirds more than China did in 1990; China produced two-thirds more than Russia did in 2000.

These failures have been debated for the past several years and form the intellectual cornerstones of the antiglobalization movement. But Stiglitz packs more wallop both because he argues his case trenchantly and because he writes as a disaffected insider.

Yet for the same reason, his book seems overly tendentious, even vengeful. He refers to the ''faceless'' international bureaucrats of the I.M.F., but surely they were not faceless to him after his years at the World Bank, its sister institution. He can seem sanctimonious. ''Unfortunately, my forecasts turned out to be all too right'' is a typical conceit.

Stiglitz inexplicably chooses not to detail his own conflicts with Rubin, Summers and Fischer. He does not reveal the circumstances of his resignation from the World Bank in 1999, even though bank officials have said that it came at the behest of Summers.

He provides a handful of anecdotes about his involvement in major decisions, but they are full of innuendo. Stiglitz claims that Rubin and Summers hatched the most important policies in secret, leaving not only him out of the loop but also the president. Recounting debates about aid to Russia, he writes, ''Treasury viewed the issue as too important to let the president have an important role.'' But he leaves the charge dangling.

Politics, unlike economics, has no invisible hands. Yet the book makes no effort to sort out the political and diplomatic machinations that shaped policy. Stiglitz ignores the fact that the right wing dislikes the I.M.F. as much as the left wing does, and that conservatives saw the Clinton-led fund as intervening too much, not too little, in the market.

Russia's economy performed dismally during the Clinton era. But growth was not the only goal. Did Russia policy create ''the worst of all possible worlds,'' as Stiglitz claims? One can imagine something worse than a relatively democratic nation -- run by the moderately pro-American Vladimir Putin -- now growing again after a painful transition.

Stiglitz also makes a superficial case for an imperialist plot. Yes, the Clinton administration pressured countries to attend to the financial markets. But the administration bowed to the bond market at home, too, where fiscal discipline helped feed the 1990's boom. Stiglitz acknowledges that private capital flows to the developing world grew sevenfold in seven years during the 90's, while foreign aid stagnated. That American and many foreign leaders wanted to eliminate barriers to those flows -- and did so too quickly in some cases -- is not as unfathomable as he maintains.

While parts of this book are disappointingly shallow, Stiglitz's critique of the market-driven 90's still resonates, especially when the business pages are full of stories about white-collar crime and the stock market seems stuck in a perpetual rut. Even the United States cannot blithely assume that financial markets will work on autopilot. It is testament to the salience of Stiglitz's arguments that many economists -- even some Bush administration officials -- now embrace his view that economic change in the developing world must evolve more with local conditions, not on Washington's calendar. Without a thorough makeover, globalization could easily become a quagmire.

Joseph Kahn writes about international economics for The Times.

JUNE 17, 2002

BOOKS
By Michael J. Mandel

Where Global Markets Are Going Wrong

GLOBALIZATION AND ITS DISCONTENTS
By Joseph E. Stiglitz
W.W. Norton -- 282pp -- $24.95

It has long been an article of faith in the American economics profession that globalization--in the form of free trade and open markets--is both beneficial and inevitable. Even if globalization has its problems, conventional wisdom holds that there are no good alternatives.

In his new book, Globalization and Its Discontents, Joseph E. Stiglitz disagrees. Stiglitz is a scion of the economic Establishment, with an almost unmatched list of accomplishments: Winner of the Nobel Prize in Economics in 2001, chairman of the President's Council of Economic Advisers under Bill Clinton, chief economist of the World Bank, and now professor at Columbia University. This rare mix of academic achievement and policy experience makes Globalization and Its Discontents worth reading.

The main point of the book is simple: Globalization is not helping many poor countries. Incomes are not rising in much of the world, and adoption of market-based policies such as open capital markets, free trade, and privatization are making developing economies less stable, not more. Instead of a bigger dose of free markets, Stiglitz argues, what's needed to make globalization work better is more and smarter government intervention.

While this has been said before, the ideas carry more weight coming from someone with Stiglitz' credentials. Moreover, his passion and directness are a breath of fresh air given the usual circumlocutions of economists. "Critics of globalization accuse Western countries of hypocrisy," he writes, "and the critics are right." He notes that industrial countries have held onto their trade barriers on such industries as agriculture while demanding that developing nations lower their tariffs.

In some ways, this book has the potential to be the liberal equivalent of Milton Friedman's 1962 classic Capitalism and Freedom, which helped provide the intellectual foundation for a generation of conservatives. But Globalization and Its Discontents does not rise to the level of Capitalism and Freedom. While Stiglitz makes a strong case for government-oriented development policy, he ignores some key arguments in favor of the market. In particular, even if government intervention works in theory, many developing countries don't have the sort of professional institutions that could implement good policies.

Globalization and Its Discontents is also repetitious, with stretches of ponderous prose. And even though Stiglitz is aiming for a popular audience, the book could use more data to back up his assertions.

Still, Stiglitz makes his case effectively. The book's main villain is the International Monetary Fund, the Washington organization that lends to troubled countries. Stiglitz' contempt for the IMF is boundless. "It is clear that the IMF has failed in its mission," he declares. "Many of the policies that the IMF pushedhave contributed to global instability." Stiglitz argues that the organization made multiple mistakes handling the Asian crisis of 1997, the Russian crisis on 1998, and even the latest problems in Argentina.

In fact, the author argues, the IMF policies of fiscal austerity, privatization, and market liberalization show little evidence of being an effective road for growth. Instead, East Asian countries such as China and Korea have succeeded precisely because they did not follow most of the dictates of the Washington consensus. After the Asian crisis, for example, Korea accepted a bailout package from the IMF but resisted most of its reform demands, including advice to get rid of excess capacity in the semiconductor industry. Stiglitz argues that in contrast, Thailand followed IMF prescriptions "almost perfectly." The results: Korea recovered much faster than did Thailand.

Stiglitz observes that the IMF's objectives have changed "from serving global economic interests to serving the interests of global finance." He is caustic when he talks about top officials of the IMF ending up going to work for large financial institutions. One example: Stanley Fischer, deputy managing director at the IMF during the Asian and Russian crises, is today vice-chairman at Citigroup. Writes Stiglitz: "One could only ask, was Fischer being richly rewarded for having faithfully executed what he was told to do?"

Stiglitz offers alternatives to the IMF's policies. An example: When a developing country faces a financial crisis, he suggests keeping interest rates low instead of raising them and worsening the recession. It's also vital to keep credit flowing, he says, rather than closing banks, as the IMF suggests.

While Stiglitz agrees that privatization, open capital markets, and free trade are fine ideas in the long run, he argues that slow reform is best. Instead of issuing mandates, the IMF should use its resources to help fund health and literacy efforts, says Stiglitz.

The author's prescriptions have their own problems, though. For example, he predicts that growth in Russia will succeed only if the country creates an "investor-friendly environment." But that may be difficult, he admits, without drastic political reforms.

Still, just as Friedman's book helped to legitimize certain pro-market ideas before they became popular, so may Globalization and Its Discontents give additional weight to a new conception of globalization. That would be no small accomplishment.

Mandel is BusinessWeek's chief economist.

How globalization hurts
Insider explains how the IMF affects the world
Reviewed by Anna Lappe
Sunday, July 21, 2002
 

Globalization and Its Discontents

By Joseph Stiglitz

W.W. NORTON; 282 PAGES; $24.95

In the now-famous protests of Seattle in 1999, the world looked on as throngs of people -- from work-boot-clad unionists to turtle-costumed environmentalists, from pierced anarchists to buttoned-up businessmen -- had their say. In the end, hundreds were arrested, Nike Town and Starbucks were trampled and the World Trade Organization meetings (in fact meetings of many international institutions) would never be the same again.

Three years on, after more dramatic demonstrations in Washington, Prague, Genoa and New York, most Americans may no longer confuse IMF and WTO with NBA and WWF, but what these institutions actually do and how they affect us is still murky territory.

Enter Joseph E. Stiglitz's "Globalization and Its Discontents," a fresh, much-needed look at how these institutions -- primarily the International Monetary Fund -- affect policy and a critique of how they've shaped our global economy. Stiglitz is no flag-waving radical, no soap-box dissenter. He comes from the inside: He worked for Clinton's Council of Economic Advisers, was a head honcho at the World Bank and is a professor of economics at Columbia University -- and he won the 2001 Nobel Prize in economics.

Stiglitz details exactly when and how the IMF got derailed from its original mission. Established after World War II to ensure global economic stability, the IMF has become a dominant force in mandating economic and social policy throughout the world. And, Stiglitz tells us, it's encumbered by an outdated structure: The United States, for instance, is still the only country with "effective veto" on all IMF policy.

"Many of the policies that the IMF pushed . . . have contributed to global instability," Stiglitz writes. Argentina, East Asia, Russia -- in account after account he spells out exactly what has gone wrong and where and how the IMF had a role in it.

His contemporaries have labeled globalization protesters "flat-earth advocates" (among other put-downs), but Stiglitz takes a different stand: "It is the trade unionists, students, environmentalist -- ordinary citizens -- marching in the streets . . . who have put the need for reform [of these institutions] on the agenda in the developed world." In fact, he writes, "until the protesters came along there was little hope for change and no outlets for complaint." After all, millions in the developing world have been protesting for decades -- rioting when IMF austerity measures were imposed or when social services funding was cut to service mounting foreign debt -- to no avail.

Stiglitz describes heads of states in developing countries frustrated because they were being forced to capitulate to IMF policies they knew would hurt the most vulnerable first, and this reflects my own experience talking to people on the ground. While conducting research for a book, I met hundreds of people on five continents with firsthand experience of the impact of IMF policy. For example, Kenyan students told me about cutbacks in school funding (the direct result of IMF structural adjustment program mandates) that had doubled their tuition. At fee-increase protests, they were attacked by other students -- government-paid youth also desperate for school funding.

Stiglitz not only details the IMF's economic impact, but he also goes to the heart of the debate. Ultimately, he argues, we're talking about a fight between world views, between "market fundamentalism" (markets are all good all the time and best left unfettered by government intervention) and liberalism (markets need government and nongovernmental institutions to ensure they work fairly). In an era of Enrons and WorldComs, Stiglitz seems to be on to something.

Though Stiglitz is insightful about the stranglehold of market fundamentalism, it was disappointing to see him occasionally slip into the mind-set that globalization "has reduced the sense of isolation felt in much of the developing world." It conjures up an image of thousands of rural villagers twiddling their thumbs waiting for reruns of "Starsky and Hutch" to be beamed in. Stiglitz seems to forget that before U.S.-backed mass media and consumerism, rich, vibrant indigenous cultures flourished without "Lifestyles of the Rich and Famous" and Coca-Cola.

In another passage, Stiglitz writes that "working in a factory is a far better option for many than growing rice." Millions of small farmers across the developing world survive on the land, farming for their families. They would be decidedly worse off leaving the land to depend solely on their paid labor. The market fundamentalist "modernization" model of the IMF encourages just such an exodus.

But these passages are momentary lapses into where-would-we-be-without-the- market thinking; for the most part, Stiglitz clearly shows how the IMF's market-is-holier-than-thou mentality has gotten us into economic crises.

Stiglitz's vision, ultimately, is hopeful. Reform, he firmly believes, is possible. But before reform comes more debate -- and mudslinging. Kenneth Rogoff, economic counselor and director of research at the IMF, blasted Stiglitz in an open letter published on the IMF's Web site (www.imf.org). Rogoff writes about his colleagues: "Their dedication humbles me, but in your speeches, in your book, you feel free to carelessly slander them."

Although Stiglitz is harsh, he is not slanderous, nor is he careless. If anything, Stiglitz cares about precisely those he sees hurt by the policies he criticizes.

Coming on the heels of the much-publicized cancel-the-debt tour of Africa by U2's Bono and Treasury Secretary Paul O'Neill (who could pass up those photo ops?), "Globalization and Its Discontents" seems part of a healthy and growing debate about in whose interest these institutions are run and what real impact their policies have. Stiglitz has done important work by opening a window few of us ever get to look through, into institutions that are, after all, public.

It's nice to know that what's happened since Seattle has not been for nothing.

Anna Lappe (www.annalappe.org) is co-author with her mother of "Hope's Edge: The Next Diet for a Small Planet."

CATO Institute

Playing the Blame Game: In a World of Trouble

by Brink Lindsey

May 30, 2002

Brink Lindsey is director of the Cato Institute's Center for Trade Policy Studies. He is the author of the book "Against the Dead Hand: The Uncertain Struggle for Global Capitalism" (John Wiley & Sons, January 2002).

Joseph Stiglitz has unmatched credentials to write about globalization. The winner of the 2001 Nobel Prize in economics, he is a brilliant man at the summit of his profession. And as chairman of President Clinton's Council of Economic Advisers, and then chief economist at the World Bank, he was a participant in the great policy dramas that shaped and shook the global economy over the past decade.

All of which makes "Globalization and Its Discontents" (Norton, 282 pages, $24.95) a deeply disappointing book. Mr. Stiglitz puts aside his formidable analytical skills and spins an almost cartoonish tale of "market fundamentalism" run amok. Virtually all the world's woes, in Mr. Stiglitz's telling, have been caused or compounded by free-market zealotry. Worsening poverty in Africa, the Asian crisis, Russia's botched transition from communism, the collapse of Argentina's economy -- all are examples, according to Mr. Stiglitz, of what happens when laissez-faire ideologues get their way.

The book's bête noire is the International Monetary Fund, the sister institution of the World Bank and a central player in the financial crises that have convulsed global markets in recent years. And this animus is well founded: The IMF's interventions have been nothing short of catastrophic. Mr. Stiglitz rightly excoriates the IMF for its root-canal economics -- in particular, its advocacy of high interest rates and tax increases during economic downturns. The IMF's obsession with balanced budgets at all costs, and its defense of indefensible exchange rates, have both deepened and prolonged the suffering of nations that follow its advice.

Mr. Stiglitz goes off the rails, though, when he argues that IMF interventionism has anything to do with free markets. Of the IMF, he writes: "Its position was based on an ideology -- market fundamentalism -- that required little, if any, consideration of a country's particular circumstances and immediate problems." For example: "Soaring interest rates might, today, lead to starvation, but market efficiency requires free markets, and eventually, efficiency leads to growth, and growth benefits all."

This is misleading to the point of absurdity. Surely Mr. Stiglitz realizes that the free-market camp is all but unanimous in denouncing the IMF: Milton Friedman and many, many other writers and thinkers have called for its outright abolition, while the Republican-backed Meltzer Commission recommended a sweeping overhaul.

From the free-market perspective, the IMF's specific policy recommendations -- sometimes sensible, sometimes grievously wrongheaded -- are secondary. The fundamental problem is "moral hazard": the perverse incentives created for international lenders and borrowers by IMF lending. Swayed by those incentives, national governments persist in irresponsible policies while foreign creditors underestimate the risks. Both booms and busts in the developing world are thus exaggerated to devastating effect.

Mr. Stiglitz mentions none of this. There's nothing in his book that suggests even a whisper of the many profound disagreements between the "disciples of Milton Friedman," as he calls them, and the IMF's economists. Such disagreements do not fit well with Mr. Stiglitz's ax-grinding, and so, apparently, he decided to leave them out.

Other things are left out, too. Mr. Stiglitz's account of the Asian crisis of 1997-98 places the blame squarely on IMF-backed capital-market liberalization. And it's true that the surging capital inflows made possible by liberalization helped to set the stage for the crisis -- but only in combination with misguided exchange-rate pegs. All of the disastrous financial crises of the 1990s -- in Mexico, Brazil and Russia, as well as East Asia -- occurred because artificially pegged rates blew up under pressure from capital movements. But Mr. Stiglitz doesn't say a word about exchange-rate policy in his treatment of the Asian crisis.

In similar fashion, he charges that Russia's transition from communism went awry because of hasty privatization and price liberalization. The superior performance of China and Poland, he argues, demonstrates that pragmatic "gradualism" works better than ideology-driven "shock therapy." Of course, he chooses not to discuss the dismal records of other "gradualists" like Romania, Ukraine, Belarus and most of the Central Asian republics. Nor does he admit the ways in which postcommunist success stories like Poland, Hungary and Estonia have far outpaced Russia in pro-market reforms.

The book's overheated rhetoric doesn't help, either. Those who differed with Mr. Stiglitz about Russia are said to have favored the "Bolshevik approach" to market reform. Elsewhere he writes: "Globalization, as it has been advocated, often seems to replace the old dictatorships of national elites with new dictatorships of international finance." Such cheap shots hardly square with Mr. Stiglitz's stated preference for dispassionate economic "science" over ideology.

There is much about globalization's record so far that warrants discontent. Despite the dismantling of state controls and the expansion of markets, durable economic progress continues to elude most countries. There is a need for sober reappraisal -- for adjusting policies in light of often bitter experience. The stick-figure caricatures of "Globalization and Its Discontents" do not answer that need.

Reprinted from The Wall Street Journal © 2002 Dow Jones & Company, Inc. All rights reserved

Joseph Stiglitz: Globalization and its Discontents. W.W. Norton & Company, New York 2002, 282 Seiten, 24,95 Dollar.

Text: Frankfurter Allgemeine Zeitung, 22.07.2002, Nr. 167 / Seite 12

Die ewige Hoffnung auf den Staat
Eine ungezügelte Schimpftirade auf den "neoliberalen" IWF

CLAUS TIGGES

 
22. Juli 2002 Kaum jemand wäre wohl besser geeignet als Joe Stiglitz, um ein Buch über die verschiedenen Facetten der Globalisierung, ihre Chancen und Herausforderungen zu schreiben. Seine Kenntnisse in der Ökonomie gelten nicht erst seit der Verleihung des Nobelpreises im vergangenen Jahr als überragend; Stiglitz hat als Wirtschaftsberater von Bill Clinton und später als Chefvolkswirt der Weltbank auch in der praktischen Arbeit Erfahrungen mit der Globalisierung gesammelt. Darum liegt es nahe, von Stiglitz eine intelligente Auseinandersetzung mit dem Thema und neue Einsichten in die Zusammenhänge zu erwarten.

Um so größer ist die Enttäuschung des Lesers, der schon auf den ersten Seiten spürt, daß es - anders als der Titel in Aussicht stellt - nur am Rande um die Globalisierung geht. Statt dessen gerät das Buch zu einer Generalabrechnung mit dem Internationalen Währungsfonds (IWF). Glaubt man Stiglitz, dann sitzt im IWF-Hauptquartier an der 19. Straße in Washington ein Haufen drittklassiger und verblendeter Ökonomen, die Schwellenländer mit "neoliberalen" Wirtschaftsreformen zugrunde richten. In den Finanzkrisen in Asien und Lateinamerika Ende der neunziger Jahre hat der IWF nach Ansicht des Nobelpreisträgers ebenso versagt wie bei der Transformation der Länder des ehemaligen Ostblocks zu marktwirtschaftlichen Systemen.

Rußland, so könnte der Leser meinen, sei nur in wirtschaftliche Schwierigkeiten geraten, weil es die IWF-Reformrezepte angewendet habe. Gewiß, der Fonds hat in der Krisenbewältigung Ende der neunziger Jahre Fehler begangen; diese sind inzwischen eingestanden und der neue IWF-Chef Horst Köhler ist bemüht, sie künftig zu vermeiden. So hat der Währungsfonds inzwischen erkannt, daß bereitwillig hergegebene, milliardenschwere Hilfspakete nicht der Weisheit letzter Schluß sind.

Folgte man aber Stiglitz, dann wäre die Bewältigung von Wirtschaftskrisen fast im Handumdrehen zu leisten: Reichlich Geld von außen und aus der eigenen Notenpresse reichen seiner Ansicht nach fast aus, um eine darniederliegende Wirtschaft wieder flottzumachen. Geflissentlich übersieht der Ökonom bei seinem Plädoyer für eine keynesianische Wirtschaftspolitik, daß in vielen Fällen nicht der Markt, sondern die Regierungen der späteren Krisenländer versagten, weil sie eine falsche Politik betrieben. In jedem Satz spürt der Leser das Mißtrauen des Autors gegenüber den Marktkräften und die Überzeugung, daß der Staat es schon richten werde.

In seiner Wut schießt Stiglitz, der sich selbst und seine Politikempfehlungen offenbar für unfehlbar hält, über das Ziel hinaus: Er bezichtigt den einstigen Vize-Chef des IWF, Stanley Fischer, der Bestechlichkeit. Fischer habe die Krisenländer unnötig scharf bestraft - zum Nutzen der Citigroup, die ihn nach seinem Ausscheiden aus dem Fonds mit einem lukrativen Posten für einen Einsatz belohnt habe. Zu Recht hat der IWF-Chefvolkswirt Kenneth Rogoff diesen persönlichen Angriff, der sich wohl in der englischen, nicht aber in der bei Siedler erschienenen deutschen Ausgabe des Buches findet, dieser Tage in einem offenen Brief an Stiglitz harsch zurückgewiesen. An der Integrität Fischers, der ein ebenso herausragender Ökonom wie Stiglitz ist, gibt es keinen Zweifel.

Statt einer Schimpftirade auf den Währungsfonds, die noch dazu recht langatmig gerät und wenig neue Erkenntnisse bringt, hätte Stiglitz sich zu jenen Fragen äußern sollen, die im Zusammenhang mit der Globalisierung wirklich von Bedeutung sind: Welchen Einfluß hat der Handel zwischen Ländern auf Wachstum, Löhne und Beschäftigung? Welche Folgen hat der "digitale Vorsprung" der Industrienationen? Wie wirken Globalisierung und Marktkräfte auf die Umwelt? Welche Rolle spielt die Kultur von Nationen für die wirtschaftliche Entwicklung? Stiglitz bleibt die Antworten schuldig. Wer ebenso wie Stiglitz den IWF für das Übel in der Welt verantwortlich macht, der mag sich durch dieses selbstgerechte Buch bestätigt fühlen. All jene, die es besser wissen, können sich die Lektüre getrost ersparen.