[PEN-L:29505] Stiglitz hits the wires

[Doug Henwood <dhenwood@xxxxxxxxx>]

DJ Ex World Bank Chief Stiglitz Calls For Abolishment Of IMF

Dow Jones News Service via Dow Jones

WASHINGTON (Dow Jones)--The International Monetary Fund is beyond
reform and should be abolished, vocal IMF critic and former World
Bank Chief Economist Joseph Stiglitz said in a radio interview.

"The IMF has not earned the confidence of the markets; its bailouts
have failed a large percentage of the time," Stiglitz said in an
interview with Doug Henwood on his Left Business Observer weekly
radio show broadcast Thursday in New York.

"With more (global) interdependence there is greater need for more
collective action...I used to say since we are going to need these
instutions, it is better to reform them than start from scratch,"
Stiglitz said. "I am beginning to have second thoughts; I am
beginning to ask if the credibility of the IMF has been so eroded, it
would be better to start from scratch."

Stiglitz described the development of IMF programs as a tightly
centralized system of decision-making that results in most advice
being dispensed by economists in Washington, D.C., rather than more
knowledgeable people working on the ground in the countries having
problems. He suggested that the Fund is so resistant to change, it
would be difficult to reform it.

The author of Globalization and its Discontents, a book sharply
critical of the IMF's performance and that of the Clinton
administration's economic team during the Asian economic and
financial crisis of the late 1990s, has provoked some defensive
reaction from the IMF. Last month, IMF Director of Research Kenneth
Rogoff made public a letter to Stiglitz calling his ideas "at best
controversial, at worst snake oil."

-By Elizabeth Price, Dow Jones Newswires