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Books and Media
Crisis prevention:
Regional approaches require staying power
Development policy:
Joseph Stiglitz under fire
PPP in the UN system:
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Online forum on “green”genetic engineerin
World champion in development assistance
6/2004 |
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Development policy:
Joseph Stiglitz under fire
Ben Fine, Costas Lapavitsas,
Jonathan Pincus:
Development Policy in the Twenty-first Century.
Beyond the post-Washington consensus.
London, New York, Routledge 2001,
224 pp., $ 33.95, ISBN 0- 415-30618-3
Left-wingers usually cherish former World Bank Chief Economist Joseph Stiglitz. After all, his work contributed to the bank reemphasising the role of the state in development. Stiglitz’s focus on efficient institutions changed the World Bank’s positions in a way many left-wing critics approved of.
Professor Ben Fine and other authors of the London School of African and Oriental Studies, however, swim against the current of general praise for Stiglitz. They accuse the star economist and Nobel Prize winner of legitimising the continuity of the World Bank's old, familiar practices, with his theory. In the end, they say, regardless of changed rhetoric Stiglitz's recommendations differ little from those of the neoliberal mainstream.
The main thrust of the criticism is that Stiglitz clings to the primacy of the market and shows himself to be non-dogmatic only in that he does not assume that markets can always function smoothly. Indeed, Stiglitz says incomplete information leads systematically to market failures which can only be remedied by (state guaranteed) institutions. That, however, calls for responsible government action.
Fine's group deals in this book with a wide range of developmental subjects including agri-culture, the financial sector, industrialisation and corruption. In each case, the authors compare the orthodox positions of the Washington Consensus with the modifications of the Stiglitz school in order to weigh them against empirical data (above all, those of the successful Southeast Asian economies). They find that Stiglitz’s thinking is based on theoretical modelling – not practical experience.
The authors accuse Stiglitz of ignoring critical empirical works on the World Bank and IMF, arguing that his approach serves merely to establish the hegemony of economics over other social sciences. The new notional thinking, they add, enables other disciplines to be integrated in market economy concepts by means of the detour of “institution” and to subject them to economic calculations.
This argument has something to it, and that makes this book worth reading for any one inter-ested in economic theory. However, the passion of the criticism comes on as being laboured. The authors bemoan the economist's typical fixation on mathematically ascertainable market logic. But their own repetitive demand that political and historical developmental perspectives should be analysed in the light of class interests appears to be similarly narrow-minded.
Fine concedes only in passing that Stiglitz's ideas differ significantly from the IMF's policy. The scolded political consultant criticised the World Bank's sister institution expressly for its tendency to excessive shock therapies, over-hasty privatisation and over-the-top fixation on macroeconomic stability – and due not least to such conflicts he quit the World Bank.
Hans Dembowski
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