Globalization and its Discontents | Study Guide

Joseph Stiglitz

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Globalization and its Discontents | Preface | Summary

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Summary

Author Joseph E. Stiglitz describes his lifelong, extensive experience in economics and in applying his expertise to helping developing countries grow their economies. He describes his work as part of President Clinton's Council of Economic Advisers and later as the World Bank's chief economist and development specialist. The latter position allowed him to visit developing nations around the world to see what was needed to spur economic growth in different countries with diverse cultures.

Stiglitz criticizes the International Monetary Fund (IMF) for its "outworn presumption that markets, by themselves, lead to efficient outcomes." He is also critical of the IMF's dismissal of input from the client country's government and its total reliance on Western experts to shape its policies, which too often benefit Western financial and commercial interests and not the interests of the client nation. The IMF's policies frequently lead to greater poverty in the client country seeking to grow its economy.

According to Stiglitz, the rules of globalization must be rewritten to be fairer and more inclusive regarding developing countries and their needs. They must "reflect a basic sense of decency and social justice ... through democratic processes" in the developing countries seeking economic aid.

Analysis

The preface offers a brief look into the ways the IMF and its policies often have a negative economic impact on the developing countries they are supposed to be helping. The strict liberalization policies (opening a nation's markets to global free-market intrusion) imposed on developing countries are so economically disruptive that the poor in these nations often find they become poorer rather than better off.

Stiglitz also challenges the ideological orthodoxy of the IMF's policies, which place far too much emphasis on liberalization and too little on fairness and local conditions. IMF policies are unfair because they are created by Western experts and benefit primarily Western special interests, not the interests of the client country. This is a fundamental hypocrisy that has fostered so much resentment and so many protests against the institutions that implement globalization in developing countries.

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