South Africans expose Stiglitz “illusion”
News||15 March 1999|update 12|
In January, some 50 South African civil society activists challenged World Bank Chief Economist Joe Stiglitz in Johannesburg, concluding that his responses "shattered the illusion that the World Bank is undergoing fundamental transformation".
Stiglitz's has been portraying himself at the helm of a fundamental sea-change in thinking at the Bank, based on a consideration of failures of orthodox economic prescriptions and new theoretical insights especially around the role of information. He was welcomed to South Africa with headlines including: "Unemployed can bank on Stiglitz: Reflecting the changing face of the World Bank, Joseph Stiglitz is a hero in some left-wing circles".
The World Bank mission in Pretoria concentrated from the early 1990s on influencing policy circles in South Africa rather than on developing major loans. In the words of Mercia Andrews, Vice President at the SA NGO Coalition and George Dor, of the Alternative Information and Development Centre:
The NGOs put a series of points to Stiglitz and his South Africa-based colleagues. They included:
They were disappointed in Stiglitz's replies on all these issues, concluding that he had retreated significantly from his Helsinki "Post-Washington Consensus" speech one year earlier.
Andrews and Dor speculate on the reasons:
Helsinki speech may have been a deliberate strategy to create the impression of change. He may have been reigned in by the World Bank after Helsinki. Perhaps he felt restrained in Johannesburg by the need to talk the language of his entourage. He portrays the confidence that he has the ear of the institution but insider talk suggests that he is seen as a maverick who is not to be taken too seriously. Whatever the reason for his retreat, his hero's halo has now vanished."The discussion about how the Bank and others use the theory and practice of Stiglitzian economics will continue.
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Published: 15 March 1999 , last edited: 12 February 2009
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