LUCIAN BLAGA UNIVERSITY OF SIBIU SCHOOL OF ECONOMIC SCIENCES

Globalization: Stiglitz's Case

The most pressin e!onomi! pro"#em o$ o%r time is th&t so m&n' o$ (h&t (e %s%&##' !&## )*e+e#opin e!onomies) &re, in $&!t, not *e+e#opin - It is sho!.in to most !iti/ens o$ the in*%stri&#i/e* 0estern *emo!r&!ies to re&#i/e th&t in U &n*&, or Ethiopi&, or M&#&(i, neither men nor (omen !&n e1pe!t to #i+e e+en to & e $ort'2$i+e- Or th&t in Sierr& Leone 34 per!ent o$ &## !hi#*ren *ie "e$ore re&!hin their $i$th "irth*&'- Or th&t in In*i& more th&n h&#$ o$ &## !hi#*ren &re m&#no%rishe*- Or th&t in B&n #&*esh 5%st h&#$ o$ the &*%#t men, &n* $e(er th&n one $o%rth o$ &*%#t (omen, !&n re&* &n* (rite678

0h&t is more tro%"#in sti##, ho(e+er, is to re&#i/e th&t m&n' i$ not most o$ the (or#*9s poorest !o%ntries, (here +er' #o( in!omes &n* in!ompetent o+ernments !om"ine to !re&te s%!h &pp&##in h%m&n tr& e*', &re m&.in no pro ress:&t #e&st not on the e!onomi! $ront- O$ the $i$t' !o%ntries (here per !&pit& in!omes (ere #o(est in 7;;< =on &+er& e, 5%st >7,?@< per &nn%m in to*&'9s US *o##&rs, e+en &$ter (e &##o( $or the h% e *i$$eren!es in the !ost o$ #i+in in those !o%ntries &n* in the USA, t(ent'2three h&* #o(er &+er& e in!omes in 7;;; th&n the' *i* in 7;;<- An* o$ the t(ent'2se+en th&t m&n& e* to &!hie+e &t #e&st some positi+e ro(th, the &+er& e r&te o$ in!re&se (&s on#' 3-B per!ent per &nn%m- At th&t r&te it (i## t&.e them &nother se+ent'2 nine 'e&rs to re&!h the in!ome #e+e# no( en5o'e* "' Gree!e, the poorest mem"er o$ the E%rope&n Union638

This sorr' sit%&tion st&n*s in sh&rp !ontr&st to the "%o'&nt optimism, "oth e!onomi! &n* po#iti!&#, o$ the e&r#' post(&r perio*- The e!onomi! histori&n A#e1&n*er Gers!hen.ron9s !#&ssi! ess&' )E!onomi! B&!.(&r*ness in Histori!&# Cerspe!ti+e) s% este* th&t !o%ntries th&t (ere $&r "ehin* the te!hno#o i!&# $rontier o$ their *&' en5o'e* & re&t &*+&nt& eD the' !o%#* simp#' imit&te (h&t h&* &#re&*' pro+e* s%!!ess$%# e#se(here, (itho%t h&+in to &ss%me either the !osts or the ris.s o$ inno+&tin on their o(n- The e!onomist &n* *emo r&pher Simon E%/nets, (ho (ent on to (in & No"e# Cri/e, o"ser+e* th&t e!onomi! ineF%&#ities o$ten (i*en (hen & !o%ntr' $irst "e ins to in*%stri&#i/e, "%t &r %e* th&t the' then n&rro( & &in &s *e+e#opment pro!ee*s- A#"ert Hirs!hm&n, &n e!onomist &n* so!i&# thin.er, p%t $or(&r* the h'pothesis th&t, $or & (hi#e, &t the "e innin o$ & !o%ntr'9s e!onomi! *e+e#opment, the to#er&n!e o$ its !iti/ens $or ineF%&#it' in!re&ses, so th&t the tempor&r' (i*enin th&t tro%"#e* E%/nets nee* not "e &n ins%per&"#e o"st&!#eThro% ho%t the !o%ntries th&t h&* "een !o#onies o$ the re&t E%rope&n empires, the +ie( o$ the *ep&rtin po(ers (&s th&t the ne(#' inst&##e* *emo!r&ti! instit%tions &n* $orms the' (ere #e&+in "ehin* (o%#* $o##o( the p&th o$ the 0estern *emo!r&!ies- Co#iti!&# &##i&n!es, #i.e the m'ri&* re ion&# p&!ts est&"#ishe* *%rin the Eisenho(er2G%##es er& =SEATO, CENTO, &n* &## the othersA, (o%#* he#p !ement these &ins in p#&!eNot s%rprisin #', the !ontr&st "et(een th&t e&r#ier he&*' optimism &n* to*&'9s rimmer re&#it' h&s #e* to & serio%s =&n* in!re&sin #' &!rimonio%sA *e"&te o+er t(o !#ose#' re#&te* F%estions- 0h&t, in retrospe!t, h&s !&%se* the $&i#%re o$ so m&n' !o%ntries to &!hie+e the &*+&n!es !on$i*ent#' pre*i!te* $or them & ener&tion & oH An* (h&t sho%#* the', &n* those &"ro&* (ho s'mp&thi/e (ith their p#i ht &n* see. to he#p, *o no(H Cerh&ps not sin!e the (or#*(i*e *epression o$ the 7;I<s h&+e so m&n' thin.ers &tt&!.e* & pro"#em $rom s%!h *i$$erent perspe!ti+esD H&+e the non2*e+e#opin e!onomies =to !&## them th&tA p%rs%e* the (ron *omesti! po#i!iesH Or h&+e the' "een inno!ent +i!tims o$ e1p#oit&tion "' the in*%stri&#i/e* (or#*H Is it $%ti#e to tr' to $oster e!onomi! *e+e#opment (itho%t &n &ppropri&te so!i&# &n* po#iti!&# in$r&str%!t%re, in!#%*in (h&t h&s !ome to "e !&##e* the )r%#e o$ #&() &n* perh&ps &#so in!#%*in po#iti!&# *emo!r&!' &s (e##H Or *o these $&+or&"#e instit%tion&# !re&tions $o##o( on#' &$ter & s%st&ine* impro+ement in m&teri&# st&n*&r*s o$ #i+in is &#re&*' %n*er(&'H 0o%#* more $orei n &i* he#pH Or *oes *ire!t &ssist&n!e $rom &"ro&* on#' !re&te

LUCIAN BLAGA UNIVERSITY OF SIBIU SCHOOL OF ECONOMIC SCIENCES

p&r&##e#s on & n&tion&# s!&#e to the )(e#$&re *epen*en!') sometimes &##e e* in the US, *%##in the in!enti+e $or !o%ntries to %n*ert&.e *i$$i!%#t "%t nee*e* re$ormsH Ho( m%!h "#&me #ies (ith !orr%ption in the non*e+e#opin !o%ntries9 o+ernments, o$ten in!#%*in the o%tri ht the$t "' o+ernment o$$i!i&#s o$ & #&r e $r&!tion o$ (h&te+er &i* is re!ei+e*H An* then there is the most !ontro+ersi&# F%estion o$ &##D Is the )!%#t%re) o$ these !o%ntries: spe!i$i!&##' in !ontr&st to 0estern !%#t%re:simp#' not !on*%!i+e to e!onomi! s%!!essH One import&nt !on!rete e1pression o$ the optimism (ith (hi!h thin.in in the in*%stri&#i/e* (or#* &**resse* the !h&##en e o$ e!onomi! *e+e#opment & ener&tion &n* more & o, "e$ore these p&in$%# F%estions "e!&me prominent, (&s the !re&tion o$ ne( m%#tin&tion&# instit%tions to $%rther +&rio%s &spe!ts o$ the "ro&*er *e+e#opment o&#- The Unite* N&tions sp&(ne* & $&mi#' o$ s%"2%nits to this en*, most prominent#' the UN Ge+e#opment Cro r&m &n* the UN Con$eren!e on Tr&*e &n* Ge+e#opment- The Foo* &n* A ri!%#t%re Or &ni/&tion =$o%n*e* in 7;?@, "%t sep&r&te#' $rom the UNA &n* the 0or#* He&#th Or &ni/&tion =7;?4A h&* more spe!i$i! m&n*&tes- The Intern&tion&# B&n. $or Re!onstr%!tion &n* Ge+e#opment =!ommon#' !&##e* the 0or#* B&n.A, est&"#ishe* in 7;?? most#' to he#p re"%i#* (&r2torn E%rope, soon shi$te* its &ttention to the *e+e#opin (or#* on!e th&t t&s. (&s #&r e#' !omp#ete*The Intern&tion&# Monet&r' F%n* =the IMF, or sometimes 5%st the F%n*A (&s & #&te!omer to the *e+e#opment $ie#*- Est&"#ishe* in t&n*em (ith the 0or#* B&n. in 7;??, the IMF9s ori in&# mission (&s to preser+e st&"i#it' in intern&tion&# $in&n!i&# m&r.ets "' he#pin !o%ntries "oth to m&.e e!onomi! &*5%stments (hen the' en!o%ntere* &n im"&#&n!e o$ intern&tion&# p&'ments &n* to m&int&in the +&#%e o$ their !%rren!' in (h&t e+er'one &ss%me* (o%#* "e & perm&nent re ime o$ $i1e* e1!h&n e r&tesB' the e&r#' 7;B<s, ho(e+er, the $i1e* e1!h&n e r&te s'stem pro+e* %nten&"#e, &n* $#o&tin r&tes o$ one .in* or &nother "e!&me the norm- Moreo+er, &s the 0estern E%rope&n e!onomies &ine* stren th (hi#e, &t the s&me time, more &n* more *e+e#opin !o%ntries entere* the intern&tion&# tr&*in &n* $in&n!i&# e!onom', it (&s in!re&sin #' the *e+e#opin !o%ntries th&t r&n into "&#&n!e o$ p&'ments pro"#ems or *i$$i!%#ties o+er their !%rren!ies &n* there$ore t%rne* to the IMF $or &ssist&n!e- As & res%#t, o+er time the IMF "e!&me in!re&sin #' in+o#+e* in the "%siness o$ e!onomi! *e+e#opment- An* &s *e+e#opment h&s $&#tere* in m&n' !o%ntries:in!#%*in m&n' in (hi!h the IMF h&s p#&'e* & si ni$i!&nt p&rt:the IMF9s po#i!ies &n* &!tions h&+e in!re&sin #' mo+e* to the !enter o$ &n on oin , intense *e"&te o+er (ho or (h&t to "#&me $or the $&i#%res o$ the p&st &n* (h&t to *o *i$$erent#' in the $%t%reJoseph E- Sti #it/, in Globalization and Its Discontents, o$$ers his +ie(s "oth o$ (h&t h&s one (ron &n* o$ (h&t to *o *i$$erent#'- B%t the m&in $o!%s o$ his "oo. is (ho to "#&me- A!!or*in to Sti #it/, the stor' o$ $&i#e* *e+e#opment *oes h&+e & +i##&in, &n* the +i##&in is tr%#' *etest&"#eD the +i##&in is the IMFJoseph Sti #it/ is & No"e# Cri/eK(innin e!onomist, &n* he *eser+es to "e- O+er & #on !&reer, he h&s m&*e in!isi+e &n* hi h#' +&#%e* !ontri"%tions to the e1p#&n&tion o$ &n &stonishin #' "ro&* r&n e o$ e!onomi! phenomen&, in!#%*in t&1es, interest r&tes, !ons%mer "eh&+ior, !orpor&te $in&n!e, &n* m%!h e#se- Espe!i&##' &mon e!on2omists (ho &re sti## o$ &!ti+e (or.in & e, he r&n.s &s & tit&n o$ the $ie#*- In re!ent 'e&rs Sti #it/ h&s &#so "een &n &!ti+e p&rti!ip&nt in e!onomi! po#i!'m&.in , $irst &s & mem"er &n* then &s !h&irm&n o$ the US Co%n!i# o$ E!onomi! A*+isers =in the C#inton &*ministr&tionA, &n* then, $rom 7;;B to 3<<<, &s !hie$ e!onomist o$ the 0or#* B&n.- As the n%mero%s e1&mp#es &n* person&# re!o##e!tions in this "oo. m&.e !#e&r, his in$orm&tion &n* his impressions &re in m&n' !&ses $irsth&n*-

LUCIAN BLAGA UNIVERSITY OF SIBIU SCHOOL OF ECONOMIC SCIENCES

In Globalization and Its Discontents Sti #it/ "&ses his &r %ment $or *i$$erent e!onomi! po#i!ies sF%&re#' on the themes th&t his *e!&*es o$ theoreti!&# (or. h&+e emph&si/e*D n&me#', (h&t h&ppens (hen peop#e #&!. the .e' in$orm&tion th&t "e&rs on the *e!isions the' h&+e to m&.e, or (hen m&r.ets $or import&nt .in*s o$ tr&ns&!tions &re in&*eF%&te or *on9t e1ist, or (hen other instit%tions th&t st&n*&r* e!onomi! thin.in t&.es $or r&nte* &re &"sent or $#&(e*The imp#i!&tion o$ e&!h o$ these &"sen!es or $#&(s is th&t $ree m&r.ets, #e$t to their o(n *e+i!es, *o not ne!ess&ri#' *e#i+er the positi+e o%t!omes !#&ime* $or them "' te1t"oo. e!onomi! re&sonin th&t &ss%mes th&t peop#e h&+e $%## in$orm&tion, !&n tr&*e in !omp#ete &n* e$$i!ient m&r.ets, &n* !&n *epen* on s&tis$&!tor' #e &# &n* other instit%tions- As Sti #it/ ni!e#' p%ts the point, )Re!ent &*+&n!es in e!onomi! theor'):he is in p&rt re$errin to his o(n (or.:)h&+e sho(n th&t (hene+er in$orm&tion is imper$e!t &n* m&r.ets in!omp#ete, (hi!h is to s&' &#(&'s, and especially in developing countries, then the in+isi"#e h&n* (or.s most imper$e!t#'-) As & res%#t, Sti #it/ !ontin%es, o+ernments !&n impro+e the o%t!ome "' (e##2!hosen inter+entions- =0hether &n' i+en o+ernment (i## &!t%&##' !hoose its inter+entions (e## is &nother m&tter-A At the #e+e# o$ n&tion&# e!onomies, (hen $&mi#ies &n* $irms see. to "%' too #itt#e !omp&re* to (h&t the e!onom' !&n pro*%!e, o+ernments !&n $i ht re!essions &n* *epressions "' %sin e1p&nsion&r' monet&r' &n* $is!&# po#i!ies to sp%r the *em&n* $or oo*s &n* ser+i!es- At the mi!roe!onomi! #e+e#, o+ernments !&n re %#&te "&n.s &n* other $in&n!i&# instit%tions to .eep them so%n*- The' !&n &#so %se t&1 po#i!' to steer in+estment into more pro*%!ti+e in*%stries &n* tr&*e po#i!ies to &##o( ne( in*%stries to m&t%re to the point &t (hi!h the' !&n s%r+i+e $orei n !ompetition- An* o+ernments !&n %se & +&riet' o$ *e+i!es, r&n in $rom 5o" !re&tion to m&npo(er tr&inin to (e#$&re &ssist&n!e, to p%t %nemp#o'e* #&"or "&!. to (or. &n*, &t the s&me time, !%shion the h%m&n h&r*ship *eri+in $rom (h&t: import&nt#', &!!or*in to the theor' o$ in!omp#ete in$orm&tion, or m&r.ets, or instit%tions:is no one9s $&%#tSti #it/ !omp#&ins th&t the IMF h&s *one re&t *&m& e thro% h the e!onomi! po#i!ies it h&s pres!ri"e* th&t !o%ntries m%st $o##o( in or*er to F%&#i$' $or IMF #o&ns, or $or #o&ns $rom "&n.s &n* other pri+&te2se!tor #en*ers th&t #oo. to the IMF to in*i!&te (hether & "orro(er is !re*it(orth'- The or &ni/&tion &n* its o$$i!i&#s, he &r %es, h&+e i nore* the imp#i!&tions o$ in!omp#ete in$orm&tion, in&*eF%&te m&r.ets, &n* %n(or.&"#e instit%tions:&## o$ (hi!h &re espe!i&##' !h&r&!teristi! o$ ne(#' *e+e#opin !o%ntries- As & res%#t, Sti #it/ &r %es, time &n* & &in the IMF h&s !&##e* $or po#i!ies th&t !on$orm to te1t"oo. e!onomi!s "%t *o not m&.e sense $or the !o%ntries to (hi!h the IMF is re!ommen*in them- Sti #it/ see.s to sho( th&t the !onseF%en!es o$ these mis %i*e* po#i!ies h&+e "een *is&stro%s, not 5%st &!!or*in to &"str&!t st&tisti!&# me&s%res "%t in re&# h%m&n s%$$erin , in the !o%ntries th&t h&+e $o##o(e* themMost o$ the spe!i$i! po#i!ies th&t Sti #it/ !riti!i/es (i## "e $&mi#i&r to &n'one (ho h&s p&i* e+en mo*est &ttention to the re!ent e!onomi! t%rmoi# in the *e+e#opin (or#* =(hi!h $or this p%rpose in!#%*es the $ormer So+iet Union &n* the $ormer So+iet s&te##ite !o%ntries th&t &re no( %n(in*in their *e!&*es o$ Comm%nist misr%#eAD Fiscal austerity- The most tr&*ition&# &n* perh&ps "est2.no(n IMF po#i!' re!ommen*&tion is $or & !o%ntr' to !%t o+ernment spen*in or r&ise t&1es, or "oth, to "&#&n!e its "%* et &n* e#imin&te the nee* $or o+ernment "orro(in - The %s%&# %n*er#'in pres%mption is th&t m%!h o+ernment spen*in is (&ste$%# &n'(&'- Sti #it/ !h&r es th&t the IMF h&s re+erte* to Her"ert Hoo+er9s e!onomi!s in imposin these po#i!ies

LUCIAN BLAGA UNIVERSITY OF SIBIU SCHOOL OF ECONOMIC SCIENCES

on !o%ntries *%rin *eep re!essions, (hen the *e$i!it is most#' the res%#t o$ &n in*%!e* *e!#ine in re+en%esL he &r %es th&t !%ts in spen*in or t&1 hi.es on#' m&.e the *o(nt%rn (orse- He &#so emph&si/es the so!i&# !ost o$ !%ttin "&!. on +&rio%s .in*s o$ o+ernment pro r&ms:$or e1&mp#e, e#imin&tin $oo* s%"si*ies $or the poor, (hi!h In*onesi& *i* &t the IMF9s "ehest in 7;;4, on#' to "e en %#$e* "' $oo* riotsHigh interest rates- M&n' !o%ntries !ome to the IMF "e!&%se the' &re h&+in tro%"#e m&int&inin the e1!h&n e +&#%e o$ their !%rren!ies- A st&n*&r* IMF re!ommen*&tion is hi h interest r&tes, (hi!h m&.e *eposits &n* other &ssets *enomin&te* in the !%rren!' more &ttr&!ti+e to ho#*- R&pi*#' in!re&sin pri!es: sometimes &t the h'perin$#&tion #e+e#:&re &#so & $&mi#i&r pro"#em in the *e+e#opin (or#*, &n* ti ht monet&r' po#i!', imp#emente* most#' thro% h hi h interest r&tes, is & &in the st&n*&r* !orre!ti+e- Sti #it/ &r %es th&t the hi h interest r&tes impose* on m&n' !o%ntries "' the IMF h&+e (orsene* their e!onomi! *o(nt%rns- The' &re inten*e* to $i ht in$#&tion th&t (&s not & serio%s pro"#em to "e in (ithL &n* the' h&+e $or!e* the "&n.r%pt!' o$ !o%nt#ess other(ise pro*%!ti+e !omp&nies th&t !o%#* not meet the s%**en#' in!re&se* !ost o$ ser+i!in their *e"tsTrade liberalization- E+er'one $&+ors $ree tr&*e:e1!ept m&n' o$ the peop#e (ho m&.e thin s &n* se## themE#imin&tin t&ri$$s, F%ot&s, s%"si*ies, &n* other "&rriers to $ree tr&*e %s%&##' h&s #itt#e to *o *ire!t#' (ith (h&t h&s *ri+en & !o%ntr' to see. &n IMF #o&nL "%t the IMF %s%&##' re!ommen*s =in e$$e!t, reF%iresA e#imin&tin s%!h "&rriers &s & !on*ition $or re!ei+in !re*it- The &r %ment is the %s%&# one, th&t in the #on r%n $ree tr&*e pr&!ti!e* "' e+er'one "ene$its e+er'oneD e&!h !o%ntr' (i## &rri+e &t the mi1t%re o$ pro*%!ts th&t it !&n se## !ompetiti+e#' "' %sin its reso%r!es &n* s.i##s e$$i!ient#'- Sti #it/ points o%t th&t to*&'9s in*%stri&#i/e* !o%ntries *i* not pr&!ti!e $ree tr&*e (hen the' (ere $irst *e+e#opin , &n* th&t e+en to*&' the' *o so hi h#' imper$e!t#'- =0itness this 'e&r9s in!re&se in & ri!%#t%r&# s%"si*ies &n* ne( "&rriers to stee# imports in the US-A He &r %es th&t $or!in to*&'9s *e+e#opin !o%ntries to #i"er&#i/e their tr&*e "e$ore the' &re re&*' most#' (ipes o%t their *omesti! in*%str', (hi!h is not 'et re&*' to !ompeteLiberalizing Capital Markets- M&n' *e+e#opin !o%ntries h&+e (e&. "&n.in s'stems &n* $e( opport%nities $or their !iti/ens to s&+e in other (&'s- As one o$ the !on*itions $or e1ten*in & #o&n, the IMF o$ten reF%ires th&t the !o%ntr'9s $in&n!i&# m&r.ets "e open to p&rti!ip&tion "' $orei n2o(ne* instit%tions- The r&tion&#e is th&t $orei n "&n.s &re so%n*er, &n* th&t the' &n* other $orei n in+estment $irms (i## *o & "etter 5o" o$ mo"i#i/in &n* &##o!&tin the !o%ntr'9s s&+in s- Sti #it/ &r %es th&t the #&r er &n* more e$$i!ient $orei n "&n.s *ri+e the #o!&# "&n.s o%t o$ "%sinessL th&t the $orei n instit%tions &re m%!h #ess intereste* in #en*in to the !o%ntr'9s *omesti!&##' o(ne* "%sinesses =e1!ept to the +er' #&r est o$ themAL &n* th&t mo"i#i/in s&+in s is not & pro"#em "e!&%se m&n' *e+e#opin !o%ntries h&+e the hi hest s&+in s r&tes in the (or#* &n'(&'Privatization- Se##in o$$ o+ernment2 o(ne* enterprises:te#ephone !omp&nies, r&i#ro&*s, stee# pro*%!ers, &n* m&n' more:h&s "een & m&5or initi&ti+e o$ the #&st t(o *e!&*es "oth in in*%stri&#i/e* !o%ntries &n* in some p&rts o$ the *e+e#opin (or#*- One re&son $or *oin so is the e1pe!t&tion th&t pri+&te m&n& ement (i## *o & "etter 5o" o$ r%nnin these &!ti+ities- Another is th&t m&n' o$ these p%"#i! !omp&nies sho%#* not "e r%nnin &t &##, &n* on#' the o+ernment9s *esire to pro+i*e (e#$&re *is %ise* &s 5o"s, or (orse 'et the opport%nit' $or r&$t, .eeps them oin - Espe!i&##' (hen !o%ntries th&t !ome to the IMF h&+e & "%* et *e$i!it, & st&n*&r* re!ommen*&tion no(&*&'s is to se## p%"#i!2se!tor !omp&nies to pri+&te in+estorsSti #it/ &r %es th&t m&n' o$ these !o%ntries *o not 'et h&+e $in&n!i&# s'stems !&p&"#e o$ h&n*#in s%!h tr&ns&!tions, or re %#&tor' s'stems !&p&"#e o$ pre+entin h&rm$%# "eh&+ior on!e the $irms &re pri+&ti/e*, or

LUCIAN BLAGA UNIVERSITY OF SIBIU SCHOOL OF ECONOMIC SCIENCES

s'stems o$ !orpor&te o+ern&n!e !&p&"#e o$ monitorin the ne( m&n& ements- Espe!i&##' in R%ssi& &n* other p&rts o$ the $ormer So+iet Union, he s&'s, the res%#t o$ prem&t%re pri+&ti/&tion h&s "een to i+e &(&' the n&tion9s &ssets to (h&t &mo%nts to & ne( !rimin&# !#&ssFear o de ault- A top priorit' o$ IMF po#i!', $rom the +er' "e innin , h&s "een to m&int&in (here+er possi"#e the $i!tion th&t !o%ntries *o not *e$&%#t on their *e"ts- As & $orm&# m&tter, the IMF &#(&'s ets rep&i*- An* (hen "&n.s !&n9t !o##e!t (h&t the'9re o(e*, the' t'pi!&##' &!!ept & )+o#%nt&r') restr%!t%rin o$ the !o%ntr'9s *e"t- The pro"#em (ith &## this, Sti #it/ &r %es, is th&t the ne( !re*it th&t the IMF e1ten*s, in or*er to &+oi* the &ppe&r&n!e o$ *e$&%#t, o$ten ser+es on#' to t&.e o$$ the hoo. the "&n.s &n* other pri+&te #en*ers th&t h&+e &!!epte* hi h ris. in e1!h&n e $or & hi h ret%rn $or #en*in to these !o%ntries in the $irst p#&!e- The' (&nt, he (rites, to "e res!%e* $rom the !onseF%en!es o$ their o(n re!.#ess !re*it po#i!iesSti #it/ &#so &r %es th&t the en* res%#t is to s&**#e & *e+e#opin !o%ntr'9s t&1p&'ers (ith the perm&nent "%r*en o$ p&'in interest &n* prin!ip&# on the ne( *e"ts th&t p&' o$$ 'ester*&'9s mist&.esSti #it/9s in*i!tment o$ the IMF &n* its po#i!ies is more th&n 5%st &n itemi/e* "i## o$ p&rti!%#&rs- His theme is th&t there is & !oheren!e to this set o$ in*i+i*%&# po#i!ies, th&t the $&i#in s o$ (hi!h he &!!%ses the IMF &re not 5%st r&n*om mist&.es- In his +ie( these po#i!ies:(h&t he #&"e#s the )0&shin ton !onsens%s):&** %p to somethin th&t is %n&ttr&!ti+e, i$ not o%tri ht rep% n&nt, in se+er&# *i$$erent (&'sFirst, Sti #it/ repe&te*#' !#&ims th&t the IMF9s po#i!ies stem not $rom e!onomi! &n&#'sis &n* o"ser+&tion "%t $rom i*eo#o ':spe!i$i!&##', &n i*eo#o i!&# !ommitment to $ree m&r.ets &n* & !on!omit&nt &ntip&th' to o+ernment- A &in &n* & &in he &!!%ses IMF o$$i!i&#s o$ *e#i"er&te#' i norin the )$&!ts on the ro%n*) in the !o%ntries to (hi!h the' (ere o$$erin re!ommen*&tions- In p&rt his !omp#&int is th&t the' *i* not %n*erst&n*, or &t #e&st *i* not t&.e into &!!o%nt, his &n* other e!onomists9 theoreti!&# (or. sho(in th&t %n$ettere* m&r.ets *o not ne!ess&ri#' *e#i+er positi+e res%#ts (hen in$orm&tion or m&r.et str%!t%res or instit%tion&# in$r&str%!t%re &re in!omp#eteMore spe!i$i!&##', he &r %es th&t the IMF i nores the nee* $or proper )seF%en!in -) Li"er&#i/in & !o%ntr'9s tr&*e m&.es sense (hen its in*%stries h&+e m&t%re* s%$$i!ient#' to re&!h & !ompetiti+e #e+e#, "%t not "e$oreCri+&ti/in o+ernment2o(ne* $irms m&.es sense (hen &*eF%&te re %#&tor' s'stems &n* !orpor&te o+ern&n!e #&(s &re in p#&!e, "%t not "e$ore- The IMF, he &r %es, *e#i"er&te#' i nores s%!h $&!tors, inste&* &*optin & )!oo.ie !%tter) &ppro&!h in (hi!h one set o$ po#i!ies is ri ht $or &## !o%ntries re &r*#ess o$ their in*i+i*%&# !ir!%mst&n!es- B%t import&nt#', in his e'es, the %n*er#'in moti+&tion is i*eo#o i!&#D & "e#ie$ in the s%periorit' o$ $ree m&r.ets th&t he sees &s, in e$$e!t, & $orm o$ re#i ion, imper+io%s to either !o%nter&r %ments or !o%ntere+i*en!eA $%rther imp#i!&tion o$ this "e#ie$ in the e$$i!&!' o$ $ree m&r.ets, &!!or*in to Sti #it/, is th&t the IMF h&s &"&n*one* its ori in&# Ee'nesi&n mission o$ he#pin !o%ntries to m&int&in $%## emp#o'ment (hi#e the' m&.e the &*5%stments the' nee* in their "&#&n!es o$ p&'mentsL inste&* the IMF re!ommen*s po#i!ies th&t res%#t in steeper *o(nt%rns &n* more (i*espre&* 5o"#essness- He *oes not &r %e, o$ !o%rse, th&t the IMF pre$ers serio%s re!essions or %nemp#o'ment per se- R&ther it simp#' &!ts on the "e#ie$:serio%s#' mist&.en in his +ie(:th&t &##o(in $ree m&r.ets to *o their (or. (i## &%tom&ti!&##' t&.e !&re o$ s%!h pro"#ems- B' e1tension, he &r %es, the IMF &#so *oes not &!t to promote e!onomi! ro(th =(hi!h he#ps to pro*%!e $%## emp#o'mentA- A &in the !#&im is not th&t the IMF *is#i.es ro(th per se, "%t th&t it "e#ie+es $ree m&r.ets &re &## th&t is nee*e* to m&.e ro(th h&ppen-

LUCIAN BLAGA UNIVERSITY OF SIBIU SCHOOL OF ECONOMIC SCIENCES

As & $%rther !onseF%en!e o$ the mis %i*e* po#i!ies th&t $o##o( $rom this )!%rio%s "#en* o$ i*eo#o ' &n* "&* e!onomi!s,) Sti #it/ &r %es, the IMF itse#$ is responsi"#e $or (orsenin :in some !&ses, $or &!t%&##' !re&tin :the pro"#ems it !#&ims to "e $i htin - B' m&.in !o%ntries m&int&in o+er+&#%e* e1!h&n e r&tes th&t e+er'one .no(s (i## h&+e to $&## sooner or #&ter, the IMF i+es !%rren!' tr&*ers & one2(&' "et &n* there$ore en!o%r& es m&r.et spe!%#&tion- B' $or!in !o%ntries th&t &re in tro%"#e to s#&sh their imports, the IMF en!o%r& es the !ont& ion o$ &n e!onomi! *o(nt%rn $rom one !o%ntr' to its nei h"ors- B' m&.in !o%ntries &*opt hi h interest r&tes th&t sti$#e in+estment &n* "&n.r%pt !omp&nies, the IMF en!o%r& es #o( !on$i*en!e on the p&rt o$ $orei n #en*ers- At the s&me time, "' repe&te*#' !omin to these #en*ers9 res!%e, the IMF en!o%r& es #&1 !re*it st&n*&r*sSe!on*, &n* more *&r.#', the IMF, in Sti #it/9s +ie(, s'stem&ti!&##' &!ts in the interest o$ !re*itors, &n* o$ ri!h e#ites more ener&##', in pre$eren!e to th&t o$ (or.ers, pe&s&nts, &n* other poor peop#e- He sees it &s no &!!i*ent th&t the IMF re %#&r#' pro+i*es mone' th&t oes to p&' o$$ #o&ns m&*e "' "&n.s &n* "on*ho#*ers (ho &re e& er to &!!ept the hi h interest r&tes th&t o &#on (ith &ss%min ris.:(hi#e pre&!hin the +irt%es o$ $ree m&r.ets &s the' *o so:&#tho% h the' &re eF%&##' e& er to "e res!%e* "' o+ernments &n* the IMF (hen ris. t%rns into re&#it'Sti #it/ &#so thin.s it is no !oin!i*en!e th&t $oo* s%"si*ies &n* other (&'s o$ !%shionin the h&r*ships s%$$ere* "' the poor &re &mon the $irst pro r&ms th&t the IMF te##s !o%ntries to !%t (hen the' nee* to "&#&n!e their "%* ets- He o"ser+es th&t IMF o$$i!i&#s ten* to meet on#' (ith $in&n!e ministers &n* !entr&# "&n. o+ernors, &s (e## &s (ith "&n.ers &n* in+estment "&n.ersL the' ne+er meet (ith poor pe&s&nts or %nemp#o'e* (or.ers- He &#so notes th&t m&n' IMF o$$i!i&#s !ome to the F%n* $rom 5o"s in the pri+&te $in&n!i&# se!tor, (hi#e others, &$ter (or.in &t the IMF, o on to t&.e 5o"s &t "&n.s or other $in&n!i&# $irmsHere & &in Sti #it/9s point is th&t the IMF9s mist&.es &re not r&n*om "%t the s'stem&ti! !onseF%en!e o$ its $%n*&ment&# "i&ses- His &r %ment is &s m%!h &"o%t the po#i!ies the IMF *oesn9t re!ommen* &s the ones it *oesD St&"i#i/&tion is on the & en*&L 5o" !re&tion is o$$- T&1&tion, &n* its &*+erse e$$e!ts, &re on the & en*&L #&n* re$orm is o$$- There is mone' to "&i# o%t "&n.s "%t not to p&' $or impro+e* e*%!&tion &n* he&#th ser+i!es, #et &#one to "&i# o%t (or.ers (ho &re thro(n o%t o$ their 5o"s &s & res%#t o$ the IMF9s m&!roe!onomi! mism&n& ementOne spe!i$i! e1&mp#e, #&n* re$orm, sh&rp#' i##%str&tes (h&t he h&s in min*- As Sti #it/ points o%t, in m&n' *e+e#opin !o%ntries & sm&## ro%p o$ $&mi#ies o(n m%!h o$ the !%#ti+&te* #&n*- A ri!%#t%re is or &ni/e* &!!or*in to sh&re!roppin , (ith ten&nt $&rmers .eepin perh&ps h&#$, or #ess, o$ (h&t the' pro*%!e- Sti #it/ &r %es, The sh&re!roppin s'stem (e&.ens in!enti+es:(here the' sh&re eF%&##' (ith the #&n*o(ners, the e$$e!ts &re the s&me &s & @< per!ent t&1 on poor $&rmers- The IMF r&i#s & &inst hi h t&1 r&tes th&t &re impose* & &inst the ri!h, pointin o%t ho( the' *estro' in!enti+es, "%t n&r' & (or* is spo.en &"o%t these hi**en t&1es---- L&n* re$orm represents & $%n*&ment&# !h&n e in the str%!t%re o$ so!iet', one th&t those in the e#ite th&t pop%#&tes the $in&n!e ministries, those (ith (hom the intern&tion&# $in&n!e instit%tions inter&!t, *o not ne!ess&ri#' #i.e-

LUCIAN BLAGA UNIVERSITY OF SIBIU SCHOOL OF ECONOMIC SCIENCES

Sti #it/ !onsi*ers, &n* re5e!ts, the +ie( th&t these &n* other !hoi!es &re the res%#t o$ & !onspir&!' "et(een the IMF &n* po(er$%# interests in the ri!her !o%ntries:& +ie( th&t is in!re&sin #' pop%#&r &mon the &nti2 #o"&#i/&tion protesters (ho no( &ppe&r &t the IMF9s =&n* the 0or#* B&n.9sA meetin s- Sti #it/9s +ie( is th&t in re!ent *e!&*es the IMF )(&s not p&rti!ip&tin in & !onspir&!', "%t it (&s re$#e!tin the interests &n* i*eo#o ' o$ the 0estern $in&n!i&# !omm%nit'-) Fin&##', Sti #it/ sees the IMF9s s'stem&ti! "i&ses &s & re$#e!tion o$ & *eeper mor&# $&i#in D The #&!. o$ !on!ern &"o%t the poor (&s not 5%st & m&tter o$ +ie(s o$ m&r.ets &n* o+ernment, +ie(s th&t s&i* th&t m&r.ets (o%#* t&.e !&re o$ e+er'thin &n* o+ernment (o%#* on#' m&.e m&tters (orseL it (&s &#so & m&tter o$ +&#%es---- 0hi#e mis %i*e*#' (or.in to preser+e (h&t it s&( &s the s&n!tit' o$ the !re*it !ontr&!t, the IMF (&s (i##in to te&r &p&rt the e+en more import&nt so!i&# !ontr&!tThro% ho%t the "oo., the sense o$ mor&# o%tr& e is e+i*ent-

Go Sti #it/9s !riti!isms ho#* %pH To "e in, it is e&s' eno% h to &!!%se Sti #it/ o$ se#e!ti+e memor'- From re&*in Globalization and Its Discontents, one (o%#* ne+er .no( th&t the IMF h&* e+er *one &n'thin %se$%#- Or th&t Sti #it/, &n* his !o##e& %es $irst &t the Co%n!i# o$ E!onomi! A*+isers &n* then &t the 0or#* B&n., h&* e+er otten &n'thin (ron - Or th&t those & &inst (hom he o$ten &r %e* in the US o+ernment:espe!i&##' &t the Tre&s%r', (hi!h he !ontin%&##' portr&'s &s !omp#i!it in the IMF9s mis*ee*s, "%t &t the Fe*er&# Reser+e S'stem too:h&* e+er otten & F%estion ri ht- =In the "oo.9s so#e mention o$ A#&n Greensp&n, Sti #it/ &!!%ses him o$ "ein e1!essi+e#' !on!erne* (ith in$#&tion to the e1!#%sion o$ & +i oro%s e1p&nsion th&t !o%#* h&+e other(ise t&.en p#&!e in the US *%rin the C#inton 'e&rs-A One !&n &#so *is& ree (ith Sti #it/ o+er the !onseF%en!es o$ (h&t the IMF p#&in#' *i*, e+en in!#%*in those po#i!ies it p%rs%e* th&t most peop#e no( & ree pro+e* !o%nterpro*%!ti+e- B' 3<<3 the Asi&n $in&n!i&# !risis o$ 7;;BK7;;4 is re!e*in into the p&st- 0hi#e some o$ the &$$e!te* !o%ntries =most o"+io%s#' In*onesi&A sti## $ee# its e$$e!ts, "' no( others h&+e m&*e so#i* re!o+eries- Sti #it/ is ri ht th&t the' h&+e not re &ine*, &n* pro"&"#' (i## not, the r&tes o$ ro(th the' &!hie+e* "e$ore the !risis- B%t those r&pi* ro(th r&tes m&' (e## h&+e "een %ns%st&in&"#e in &n' !&se- E+en in R%ssi&, (here per !&pit& in!ome rem&ins (e## "e#o( (h&t it (&s (hen the So+iet Union !o##&pse*, &n* (here the IMF p%rs%e* the po#i!ies to(&r* (hi!h Sti #it/ is the most s!&thin , the e!onomi! sit%&tion #oo.s "etter to*&' th&n it *i* (hen he (&s (ritin his "oo.A more $%n*&ment&# pro"#em, &s Sti #it/ re&*i#' &!.no(#e* es, is th&t (e !&nnot re#i&"#' .no( (hether the !onseF%en!es o$ the IMF9s po#i!ies (ere (orse th&n (h&te+er the &#tern&ti+e (o%#* h&+e "een- M&n' #on time o"ser+ers o$ the *e+e#opin (or#* (i## noti!e th&t Sti #it/ r&re#' mentions e!onomi! po#i!' mist&.es th&t poor !o%ntries m&.e on their o(n initi&ti+e- Nor *oes he p&' m%!h &ttention to the #&r e2s!&#e !orr%ption th&t is en*emi! in m&n' *e+e#opin e!onomies:e1!ept in the !&se o$ !orr%ption in R%ssi&, (here he &r %es th&t the pri+&ti/&tion pro r&m p%she* "' the IMF opene* the (&' $or !orr%ption on & histori!&##' %npre!e*ente* s!&#e- He &#so ne+er points o%t th&t the t'pi!&# *e+e#opin !o%ntr' spen*s $&r more on its mi#it&r' $or!es =to $i ht (homHA th&n it re!ei+es in $orei n &i*L 'et it (o%#* seem ne!ess&r' to t&.e &!!o%nt

LUCIAN BLAGA UNIVERSITY OF SIBIU SCHOOL OF ECONOMIC SCIENCES

o$ s%!h (&ste$%# e1pen*it%res, &#on (ith r&$t in &## its $orms, i$ one is to i+e & !#e&r pi!t%re o$ (h' the non*e+e#opin e!onomies &re not s%!!ee*in It is s%rprisin too, in #i ht o$ his emph&sis on the &"sen!e o$ &*eF%&te re %#&tion &n* s%per+ision o$ $in&n!i&# instit%tions in the *e+e#opin (or#*, th&t Sti #it/ *oes not m&.e more o$ the mist&.es m&*e "' pri+&te2se!tor "%sinesses- For e1&mp#e, (h&t m&*e Eore& +%#ner&"#e to the 7;;BK7;;4 Asi&n t%rmoi# (&s th&t the !o%ntr'9s "%siness !on #omer&tes =the )!h&e"o#s)A h&* "orro(e* too he&+i#', &n* th&t the !o%ntr'9s "&n.s h&* $in&n!e* these #o&ns "' "orro(in in US *o##&rs &n* re#en*in in Eore&n (on- Tr%e, "&n.s &"ro&* th&t (ere #en*in in *o##&rs to the Eore&n "&n.s m&' h&+e "e!ome e1!essi+e#' !on$i*ent th&t the IMF (o%#* "&i# them o%t i$ &n'thin (ent (ron - B%t s%re#' m%!h o$ the $&%#t #&' (ith Eore&9s o(n "%sinessmen &n* "&n.ers- An* on!e the' h&* "%i#t their ho%se o$ !&r*s, ho( m%!h *&m& e (o%#* its ine+it&"#e !o##&pse h&+e !&%se* i$ the IMF h&* simp#' st&'e* &(&'H Ge$en*ers o$ the IMF !&nnot !#&im th&t &## (ent (e## &$ter !o%ntries imp#emente* the F%n*9s re!ommen*&tions- B%t the' (o%#* pres%m&"#' &r %e th&t e+ents (o%#* h&+e t%rne* o%t e+en (orse on some &#tern&ti+e !o%rse- The' (o%#* &#so pres%m&"#' &r %e th&t o$ !o%rse the' .ne( th&t in$orm&tion (&s imper$e!t, &n* m&r.ets in!omp#ete, &n* instit%tions &"sent, in the !o%ntries th&t !&me to the IMF $or &ssist&n!e- The iss%e, to "e &r %e* on & !&se2"'2!&se "&sis, is 5%st (h&t *i$$erent set o$ &!tions mi ht there$ore h&+e pro+e* more "ene$i!i&#Interestin #', there is &#so *is& reement to*&' o+er 5%st ho( pre+&#ent *ire po+ert' is in the *e+e#opin (or#* :&n*, (h&t is more import&nt, (hether po+ert' is in!re&sin or *e!re&sin - Sti #it/ e!hoes the st&n*&r* +ie( th&t the n%m"er o$ peop#e &ro%n* the (or#* #i+in on #ess th&n >7 per *&', or >3 per *&', h&s "een in!re&sin in re!ent 'e&rs- B' !ontr&st, his o(n !o##e& %e in the Co#%m"i& E!onomi!s Gep&rtment, M&+ier S&#&2i2 M&rtin, h&s re!ent#' p%"#ishe* & st%*' &r %in 5%st the opposite- S&#&2i2M&rtin9s point is th&t $or p%rposes o$ &ssessin (hether someone is e!onomi!&##' (e## o$$ or miser&"#e, (h&t m&tters is not ho( m&n' US *o##&rs the person9s in!ome !o%#* "%' in the $orei n e1!h&n e m&r.et "%t (h&t st&n*&r* o$ #i+in th&t in!ome !&n s%pport in the p#&!e (here he or she #i+es- Be!&%se the !%rren!' +&#%es est&"#ishe* in $orei n e1!h&n e m&r.ets =&n* &#so the +&#%es th&t o+ernments set o$$i!i&##' $or !%rren!ies $or (hi!h there is no m&r.etA o$ten *o not &!!%r&te#' re$#e!t p%r!h&sin po(er, the *i$$eren!e "et(een the t(o me&s%res o$ in!ome is sometimes #&r e6I8

In In*i&, $or e1&mp#e, the &+er& e person9s in!ome in r%pees in 3<<< tr&ns#&te* into 5%st >?N< per 'e&r &t the pre+&i#in m&r.et e1!h&n e r&te o$ ?? r%pees per *o##&r- B%t "e!&%se $oo*, !#othin , ho%sin , &n* other !ons%mer ne!essities &re so m%!h !he&per in In*i& th&n in the US, the s&me &mo%nt o$ r%pees (&s eF%i+&#ent to &n Ameri!&n in!ome o$ ne&r#' >3,?<<- Simi#&r#', the &+er& e Chinese in!ome in 3<<< (&s >4?< &t the o$$i!i&# '%&nK*o##&r m&r.et e1!h&n e r&te, "%t more th&n >I,;<< i$ me&s%re* on & p%r!h&sin po(er eF%i+&#ent "&sis6?8

E+en i$ (e &##o( $or these *i$$eren!es in the !ost o$ #i+in , the n%m"er o$ peop#e in the (or#* (ho #i+e on the eF%i+&#ent o$ >7 per *&', or >3 per *&', is sti## *epressin #' #&r eD &!!or*in to S&#&2i2M&rtin9s estim&te, ne&r#' I<< mi##ion, &n* not F%ite 7 "i##ion, respe!ti+e#'- B%t this is $&r "e#o( the 7-3 "i##ion &n* 3-4 "i##ion $i %res th&t h&+e "e!ome $&mi#i&r in p%"#i! *is!%ssion &n* &re %se* "' Sti #it/- More import&nt, Sti #it/ $o##o(s the more $&mi#i&r +ie( in s&'in th&t these tot&#s &re in!re&sin , "%t S&#&2i2M&rtin estim&tes th&t the' &re *e!#inin *espite the r&pi* ro(th in (or#* pop%#&tion- As & res%#t, he $in*s, the proportion o$ peop#e

LUCIAN BLAGA UNIVERSITY OF SIBIU SCHOOL OF ECONOMIC SCIENCES

#i+in on (h&t &mo%nts to >7 per *&' h&s $&##en $rom 3< per!ent o$ the (or#*9s pop%#&tion & F%&rter2!ent%r' & o to 5%st @ per!ent to*&', (hi#e the >32per2*&' po+ert' r&te h&s $&##en $rom ?? per!ent to 7; per!entM%!h empiri!&# rese&r!h (i## h&+e to "e *one &n* m%!h &n&#'ti!&# *e"&te (i## h&+e to t&.e p#&!e "e$ore &n'one !&n !on$i*ent#' *e!i*e (hi!h o$ these !ontr&stin me&s%rements is the more &!!%r&te- B%t it is (orth pointin o%t th&t the m&5or so%r!e o$ the *e!#ine in po+ert' o+er the #&st F%&rter2!ent%r', &!!or*in to S&#&2i2 M&rtin9s !&#!%#&tion, is the *r&m&ti! re*%!tion in po+ert' in Chin&, the (or#*9s most pop%#o%s !o%ntr':&n* Sti #it/, too, pr&ises Chin&9s per$orm&n!e &s one o$ the *e+e#opin (or#*9s re&t re!ent e!onomi! s%!!ess stories- =In .eepin (ith his !entr&# theme, he &r %es th&t Chin& s%!!ee*e* in re$ormin its e!onom' &n* re*%!in its po+ert' "e!&%se it i nore* the IMF9s &*+i!e to #i"er&#i/e &n* pri+&ti/e &"r%pt#', &n* inste&* $o##o(e* the r&*%&#ist &ppro&!h, &*&pte* to its o(n sit%&tion, (hi!h he $&+ors-A To "e s%re, the p#i ht o$ m&n' *e+e#opin !o%ntries, espe!i&##' in s%"2S&h&r&n A$ri!&, rem&ins *ire, &s S&#&2i2M&rtin &#so points o%t, &n* it m&' (e## "e *eterior&tin - B%t i$ &ttention is !entere* on peop#e r&ther th&n !o%ntries, the re&t &*+&n!es m&*e in Chin&, &n* to & #esser e1tent in In*i&:(hi!h to ether &!!o%nt $or ne&r#' I4 per!ent o$ the (or#*9s pop%#&tion:ne!ess&ri#' represent & +er' si ni$i!&nt impro+ementSti #it/9s &tt&!. on the IMF r&ises not 5%st $&!t%&# =&n* !o%nter$&!t%&#A F%estions "%t s%"st&nti+e iss%es &s (e##, p&rti!%#&r#' his &r %ment th&t the IMF &!ts on "eh&#$ o$ "&n.s &n* "on*ho#*ers, &n* ri!h !o%ntries more ener&##', &n* there$ore & &inst the interests o$ the poor- To (h&t e1tent is the IMF s%ppose* to &!t &s #en*in instit%tions or*in&ri#' &!tH Sti #it/ !omp#&ins &t #en th, &n* (ith m&n' spe!i$i! !&ses to !ite, th&t the IMF +io#&tes !o%ntries9 e!onomi! so+erei nt' (hen it reF%ires them to !&rr' o%t its po#i!' re!ommen*&tions &s & !on*ition $or its r&ntin !re*it- B%t *on9t responsi"#e #en*ers norm&##' impose s%!h !on*itions on "orro(ersH Sti #it/ ne+er &!.no(#e* es th&t to*&' the IMF $&!es serio%s !riti!ism $rom m&n' e!onomists &n* po#iti!i&ns in the 0est on the ro%n* th&t it m&.es #o&ns (ith too $e( !on*itions, so th&t the "orro(in !o%ntries o$ten simp#' en* %p (&stin the mone'6@8

Or sho%#* the IMF thin. o$ itse#$ not &s & #en*in instit%tion, &!tin &s responsi"#e #en*ers norm&##' *o, "%t inste&* &s &n instit%tion !h&r e* so#e#' (ith promotin the (e#$&re o$ the "orro(in !o%ntries, (ith (&ste o$ some !re*its to "e e1pe!te*H Some p&rts o$ Sti #it/9s !omp#&int &re not so m%!h &"o%t the IMF per se &s &"o%t the &"sen!e o$ some $orm o$ intern&tion&# &%thorit' !&p&"#e o$ imposin on !iti/ens (ho &re &#re&*' re#&ti+e#' (e## o$$ the "%r*en o$ &ssistin their #ess $ort%n&te $e##o( h%m&n "ein s e#se(hereTo "e s%re, the (or#*9s ri!h !o%ntries !o%#* simp#' & ree &mon themse#+es to *e+ote & m%!h re&ter sh&re o$ their o(n in!omes to $orei n &i* =& $reF%ent#' s% este* st&n*&r* is 7 per!ent o$ GGCA, either o%t o$ & sense o$ mor&# o"#i &tion or in re!o nition th&t r&isin the in!omes o$ poor !o%ntries (o%#* !re&te "ene$its spi##in o+er to the in*%stri&#i/e* (or#* &s (e##- B%t in $&!t there is no s%!h & reement- The $orei n &i* th&t most ri!h !o%ntries i+e is shrin.in !omp&re* to their GGC, &n* the e$$i!&!' o$ s%!h &i* is in!re&sin #' "ein !h&##en e* &n'(&'E+en (ithin !o%ntries (ith $irm#' est&"#ishe* *emo!r&ti! o+ernments, there is &#(&'s *e"&te &"o%t ho( enero%s s%!h &ssist&n!e sho%#* "e &n* (h&t $orm it sho%#* t&.e- B%t & #&r e p&rt o$ (h&t tro%"#es Sti #it/ &n* m&n' others (ho sh&re his +ie(s o$ ineF%&#it' &mon !o%ntries is th&t there is not on#' no s%!h & reement "%t &#so no e$$e!ti+e me!h&nism:(h&t he !&##s )s'stems o$ #o"&# o+ern&n!e):$or e+en !hoosin & po#i!' in this import&nt &re& &n* then m&.in it sti!.- The e&rnest *esire in some F%&rters $or & more $orm&# &ppro&!h to intern&tion&# "%r*en2sh&rin , to ether (ith the eF%&##' sin!ere resist&n!e to the i*e&

LUCIAN BLAGA UNIVERSITY OF SIBIU SCHOOL OF ECONOMIC SCIENCES

&mon others, is nothin ne(- B%t it is (orth re!o ni/in e1p#i!it#' th&t it is !entr&# to the F%estion o$ ineF%&#it'Moreo+er, the m&tter &t iss%e is *eeper th&n simp#' (hether there sho%#* or sho%#* not "e $%n!tionin instit%tions empo(ere* to &!t, in e$$e!t, &s & (or#* o+ernment- 0h&t o"#i &tions the !iti/ens o$ one !o%ntr' o(e to !iti/ens o$ &nother is & F%estion th&t oes to the he&rt o$ (h&t is in+o#+e* in "ein & n&tion2st&te &n* in &!tin &s & responsi"#e h%m&n "ein - Is it mor&##' #e itim&te $or US !iti/ens to p&' t&1es to pro+i*e $e##o( Ameri!&ns (ith & minim%m st&n*&r* o$ he&#th !&re %n*er Me*i!&i*, or & minim%m st&n*&r* o$ n%trition thro% h $oo* st&mps, th&t is $&r &"o+e (h&t the &+er& e An o#&n re!ei+es:&n* not &t the s&me time "e (i##in to p&' the !osts o$ "rin in An o#&, &n* the rest o$ the (or#*9s #o(2in!ome !o%ntries, %p to th&t st&n*&r*H Most Ameri!&ns (i## re&*i#' &ns(er 'es- B%t &s phi#osophers #i.e John R&(#s &n* Thom&s Co e h&+e &r %e*, (ho##' &p&rt $rom the pr&!ti!&# "ene$its th&t (e mi ht &in $rom &##e+i&tin h%m&n miser' &"ro&*, 5%sti$'in in mor&# terms (h' (e o(e more to str&n ers (ho &re !#ose &t h&n* th&n (e o(e to str&n ers (ho &re $&r &(&' t%rns o%t to "e !omp#i!&te* &n*, in the en*, e1treme#' *i$$i!%#tM&n' o$ the more pr&!ti!&# e!onomi! e#ements o$ Sti #it/9s &r %ment &re &#so iss%es o$ #on st&n*in - He m&.es & stron !&se $or po#i!ies th&t $&+or r&*%&#ism o+er )sho!. ther&p')L th&t p%t the emph&sis not on (h&t *e+e#opin !o%ntries h&+e in !ommon "%t on ho( e&!h is *i$$erentL th&t p#&!e the !on!erns o$ the poor &"o+e those o$ !re*itorsL th&t i+e m&int&inin $%## emp#o'ment & hi her priorit' th&n re*%!in in$#&tion =&t #e&st (hen in$#&tion is #ess th&n 3< per!ent & 'e&rAL &n* th&t $i ht po+ert' &n* promote e!onomi! ro(th *ire!t#', r&ther th&n mere#' est&"#ish !on*itions %n*er (hi!h e!onomies (i## "e #i.e#' to ro(, &n* po+ert' to *e!#ine, on their o(n- There is serio%s *e"&te o+er e&!h e#ement in this pro r&m- Sti #it/ pro+i*es & po(er$%# #o i!&# !&se, to ether (ith m%!h "' (&' o$ "oth "ro&*2"&se* e+i*en!e &n* $irsth&n* spe!i$i!s, to s%pport his si*e on e&!h o$ these iss%es- B%t his o"5e!ti+e is not to i+e & "&#&n!e* &ssessment o$ the *e"&teSti #it/ h&s presente*, &s e$$e!ti+e#' &s it is possi"#e to im& ine &n'one m&.in it, his si*e o$ the &r %ment, in!#%*in the s%"st&nti+e !&se $or the .in* o$ e!onomi! *e+e#opment po#i!ies he $&+ors &s (e## &s his more spe!i$i! in*i!tment o$ (h&t the IMF h&s *one &n* (h'- His "oo. st&n*s &s & !h&##en e- It is no( import&nt th&t someone e#se:i$ possi"#e, someone (ho thin.s &n* (rites &s !#e&r#' &s Sti #it/ *oes, &n* (ho %n*erst&n*s the %n*er#'in e!onomi! theor' &s (e## &s he *oes, &n* (ho h&s & $irsth&n* !omm&n* o$ the $&!ts o$ re!ent e1perien!e !omp&r&"#e to his:t&.e %p this !h&##en e "' (ritin the "est possi"#e "oo. #&'in o%t the other si*es o$ the &r %ment- 0h&t is nee*e* is not 5%st &n &ttempt to &ns(er Sti #it/9s spe!i$i! !riti!isms o$ the IMF "%t & "oo. settin o%t the s%"st&nti+e !&se "oth $or the spe!i$i! po#i!ies &n* &#so $or the ener&# po#i!' &ppro&!h th&t the IMF h&s &*+o!&te*0ho mi ht (rite s%!h & "oo.H The most o"+io%s !&n*i*&te is the $ormer MIT e!onomist St&n#e' Fis!her, (ho thro% ho%t the 'e&rs th&t Sti #it/9s &n&#'sis !o+ers (&s the IMF9s $irst *ep%t' m&n& in *ire!tor:th&t is, the F%n*9s se!on*2hi hest r&n.in o$$i!i&#, "%t $or most o"ser+ers, the person (ho, $&r more th&n &n'one e#se, &!t%&##' set the *ire!tion o$ the or &ni/&tion9s po#i!ies- Another is m' H&r+&r* !o##e& %e =no( presi*ent o$ the %ni+ersit'A L&(ren!e S%mmers, (ho ser+e* &s the US *ep%t' tre&s%r' se!ret&r', &n* then se!ret&r', *%rin these 'e&rs- S%pporters o$ the IMF in the &!&*emi! (or#*, #i.e MIT9s R%*i er Gorn"%s!h, m&' #&!. the $irsth&n* )(ho s&i* (h&t to (hom) .no(#e* e th&t !omes $rom hi h2#e+e# p%"#i! ser+i!e, "%t the' &re !#e&r2thin.in e!onomists &n* po(er$%# &*+o!&tes nonethe#ess- In the &"sen!e o$ s%!h &n &ns(er, ho(e+er, Sti #it/9s "oo. (i## s%re#' !#&im & #&r e p#&!e on the p%"#i! st& e- It !ert&in#' st&n*s &s the most $or!e$%# &r %ment th&t h&s 'et "een m&*e & &inst the IMF &n* its po#i!ies-