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Preface This book grew out of my collaboration with Joseph Stiglitz as one of his economic advisors and speech writers during his tumultuous tenure (1997–99) as chief economist (and senior vice president) of the World Bank. One of the principal themes of the book, the idea of autonomyrespecting help (assistance that actually helps people to help themselves ) was vigorously supported not only by Joe but by James Wolfensohn , the president of the Bank.1 The idea was expressed as having the “country in the driver’s seat” in the statement of principles called the Comprehensive Development Framework, or CDF (Wolfensohn 1999a). I started writing a background paper to put together the intellectual history and support for these ideas for future Stiglitz speeches, and then I got carried away, resulting, years later, in this book. I owe my biggest thanks to Joe for providing the intellectual stimulation and the organizational environment—indeed an oasis of critical thinking within the Bank—in order for these ideas to be formed and developed. It is important to understand some of the background to Joe’s tenure at the Bank. By the early 1990s, Joe had secured a future Nobel Prize in Economics for his work in information economics (he got the prize in 2001 after leaving the Bank) and was already a legend in the community of academic economists. His ‹rst foray into the public eye was joining Bill Clinton’s ‹rst-term Council of Economic Advisors along with Alan Blinder and the chair, Laura Tyson. By the end of Clinton’s ‹rst term, Joe was the chair of the council and was ready to work on an international scale. James Wolfensohn, the president of the World Bank, had no love lost on economists. He felt he understood the real-world economy as well as or better than academic economists, but he didn’t have all the formal training in economics. Wolfensohn may have feared the fate of Denis Diderot when debating the mathematician Leonhard Euler in Catherine the Great’s court. Against the atheist Diderot, Euler asserted “(a + bn)/n = x, therefore God exists”—which left Diderot speechless and defenseless. Hence Wolfensohn wanted an economist of Stiglitz’s stature at his side. After the untimely death of the previous chief economist , Michael Bruno, Joe made the move in early 1997 over a few blocks from the White House to the World Bank. At ‹rst Joe may have thought that this would be a time to work out the implications for development economics of his previous work in the economics of information. But events would soon overtake those ambitions. These were tumultuous years for the Bank. The protests against the international institutions, such as the World Trade Organization (WTO), the International Monetary Fund (IMF), and the World Bank, were building up. It was then clear, at least to Joe, that the postsocialist transition strategy based on much advice from Western economists was not going well particularly in Russia and the former Soviet Union. And the East Asian ‹nancial crisis began to unfold. Joe’s World Institute for Development Economics Research (WIDER) lecture in January 1998, “More Instruments and Broader Goals: Moving toward the Post-Washington Consensus” (chap. 1 in Chang 2001), squarely took on the “Washington consensus” that had previously been the house orthodoxy in the IMF and the Bank. Over the next two years, Joe took on one shibboleth after another in speeches given around the world. Nine of the most important speeches are republished in Chang 2001, a collection entitled Joseph Stiglitz and the World Bank: The Rebel Within. The most barbed attacks were directed against the IMF and the U.S. Treasury, where the chief antagonists were, respectively, Stanley Fischer and Larry Summers, both former chief economists of the Bank. None of this was what Wolfensohn bargained for. Instead of being at Wolfensohn’s side in the perpetual “management meetings” in the Bank, Joe seemed to always be on the road.2 He had little real interest in the “inside game” in the Bank, and he clearly relished the bully pulpit side of the chief economist’s job as well as talking directly to the leaders in the developing countries. But all this created considerable consternation in the Fund, in the Treasury, and even in the Bank itself. Instead of public debate, the Fund and Treasury would express their displeasure directly to Wolfensohn. In the “front of‹ce” of the chief economist, we would get the expected phone call: “Please...

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Additional Information

ISBN
9780472021765
Related ISBN
9780472031429
MARC Record
OCLC
607605817
Pages
354
Launched on MUSE
2012-01-01
Language
English
Open Access
No
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