Download Overview of Stiglitz (chs. 1-2)

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Overview of Stiglitz (chs. 1-2)
• Promise of globalization (“prosperity for
all”) has failed
• Unbalanced outcomes within and between
nations (“rich countries and poor people”)
• Globalization has unified people against
globalization – “They’ve got a point!”
• Stiglitz will tell us how to make
globalization work
Specific Indictments
• Rules of conduct unfair and favor
developed countries (DC)
• Material values over “social” values
• Eroded less developed countries (LDC)
sovereignty and undermined democracy
• Some winners, many losers
• “Anglo-American economic model” forced
on LDC
Making Globalization Work
• Poverty reduction with more gradualism
• More aid and debt relief, fewer conditions
• New trading rules since trade and growth
has not worked
• More capital market controls (“hot money”)
• More environmental protection
• Address failed global governance
Nation States and Globalization
• Isolation to autarky not unfettered
capitalism – large role of government
• Autarky to globalization undermines role of
government and ability to create
institutions in LDC
• Need global agreements/governance to
solve problems created by globalization
• Current institutions are failing because…
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Obsession with free markets and total GDP
Smaller government
Privatization
Free international trade
Free international capital markets
Deregulation
ASSUMES: perfect information, perfect
competition, perfect risk markets
• “Comprehensive approach”
• Proactive, highly interventionist
government for development
• More equity and protection for the poor
• Emphasis on education
• Emphasis on community
• Assumes failure of Washington
Consensus assumptions
The Evidence
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East Asia – Stiglitz grade: A+
Latin America – C
Africa -- D
Sub-Saharan Africa -- F
Russia & “transition economies“ – F-