A Review of Globalization and Its Discontents, by Joseph E. Stiglitz: an Impairment of International Institutions’ Impartiality
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One of the most pressing economic problems of our time is the objectionable direction taken by the leading regulating institutions, such as the International Monetary Fund or the World Bank. This issue is addressed in Globalization and Its Discontents, and is thoroughly analyzed throughout the next pages. It was written by Joseph E. Stiglitz, (born February 9, 1943), an American economist and author. He is also the former Senior Vice President and Chief Economist of the World Bank. He is known for his critical view of the modern management of globalization, free-market economists and some international institutions like the International Monetary Fund and the World Bank. He was born in Gary, Indiana and received his PHD from MIT in 1967,…show more content… On the other side, establishing capital market liberalization (pp. 44-46) was a mistake. Lastly, the IMF’s answers to the majority of economic crises, such as the one that laid waste to East Asia (pp. 89) had negative outcomes, deteriorating the conditions in these territories. In particular, raising the interest rates and enforcing financial austerity were burdens for the continent’s economic growth. In order to prove his points, the economist explains that China, India and Malaysia, the two first countries being spared by the studied crisis and the latter having known a quick recovery by ignoring the IMF’s advice.
The IMF and the World Bank’s policies–incorrect and brutal– doe not emanate from an active conspiracy, but have more to do with the economic actors’ individual interests (these actors’ opinions being able to prevail thanks to their political stature) and the ideology developed as a result. The book then states that the leaders and choice-makers of these two institutions truly believe in the rightfulness of their regulating and development policies. According to the author, the solution of the problem lies above all in the democratization process within the debated organizations, as their very credibility is at stake. The governments’ and their Ministers of Finance’s activities should be transparent, objective