News briefs from around the world. Compiled and edited by Greg Guma.
LONDON – Many of the tough conditions imposed on poor, debt-ridden countries by international financial institutions have been challenged by the World Bank’s own chief economist. In a little-noticed January speech, Joseph Stiglitz charged that policies such as trade liberalization, deregulation, and privatization are "sometimes misguided" and "neglect fundamental issues."
Stiglitz criticized what he described as the Washington Consensus, which holds that private markets will produce efficient allocations and growth if government gets out of the way. "I do not believe in blanket statements like, ÔGovernment is worse than markets’," he said. "I have argued that government has an important role in responding to market failures, which are a general feature of any economy." He also attacked the IMF’s obsession with inflation control, criticized policies that create unemployment in the name of efficiency, and argued that budget deficits are acceptable if they involve wise spending.