Stiglitz, Joseph (1943–)

Nobel laureate, professor, and former senior vice president of the World Bank, Joseph E. Stiglitz is best [Page 1336]known for his criticism of the International Monetary Fund (IMF) and its economic development policies. Viewing the IMF as being undemocratic and apathetic to the underdeveloped world, Stiglitz believes that promoting democracy should precede the promotion of business interests.

Growing up in a middle-class family in Gary, Indiana, Stiglitz was able to see first hand the effects that plant closings and layoffs have on workers, their families, and the community. After leaving Indiana, Stiglitz enrolled at Amherst, where he received his bachelor's degree. He continued his education at the Massachusetts Institute of Technology, where he studied economic policy and earned his doctorate in 1966. Before the age of 26, he was a tenured professor at Yale University. Stiglitz has taught at several universities and has written numerous books and papers on economic policy.

Stiglitz, who is often blunt, angered top officials at the IMF and U.S. Treasury Department by criticizing the IMF for being undemocratic and indifferent to underdeveloped countries. After refusing to yield, Stiglitz chose to resign his post at the World Bank. However, his criticism of the IMF has not receded. After leaving the World Bank, Stiglitz accepted a position with Columbia University, where he founded the Initiative for Policy Dialogue (IPD). The intention of the IPD was to assist developing countries find policy alternatives and facilitate wider civic participation in economic policy making.

In perhaps his most important book, Globalization and Its Discontents, Stiglitz examines his tenure with the World Bank and provides his explanation and critique of the IMF's economic policies. He criticized the IMF's decision to suspend loans to Ethiopia because of their leaders' refusal to accept financial deregulation. Stiglitz was dismayed that this policy was enacted, even though Ethiopia was improving the lives of its people. The 1997 Asian crisis only helped to increase Stiglitz' criticism of the IMF. Stiglitz believes that the IMF's requirement that Asian countries raise interest rates and balance their budgets was a mistake because economic growth was the primary problem, not inflation. This mistake, according to Stiglitz, was caused by the IMF's desire to reassure American and European creditors.

Concerning globalization, Stiglitz argues that it no longer benefits the poor in developing countries or the environment. According to Stiglitz, the policies of the World Bank and the IMF are too closely aligned with those of the developed world. In his opinion, they should be more concerned with improving the democratic institutions within the developing world rather than focusing on improving economic ties.

Stiglitz does not condemn the protests that have interrupted international summits, but he is concerned about the violent tactics that are sometimes employed. According to Stiglitz, protests and demonstrations have been the only methods for those dissatisfied with the policies of the World Bank and the IMF to express their discontent. What Stiglitz believes is significant about the protests is that ordinary citizens have succeeded at compelling the developed world to reconsider the policies of the World Bank and the IMF.

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