World Bank Questions Washington Consensus

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. read more

 Global Tax Gets Another Look

LONDON – Proposals to pay for international aid, peacekeeping, and other humanitarian causes through global taxes have long been shunned by the US Congress. Suggestions range from an international lottery to a tax on the arms trade. But one idea – a tax on foreign currency transactions – may have a better chance after the currency fluctuations that crashed the “Asian miracle.”