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Macroeconomic Issues Finance Library

Globalization and Its Discontents

Joseph Stiglitz (2002)

Why Read It?

  • One of the main authorities on the global economy and international finance examines the impact of economic policies and development in an easy-to-understand manner.

  • Focuses on the real impact that economic theory has on people’s lives.

  • Offers solutions as well as criticisms, rather than just being an attack on the effects of globalization.

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Getting Started

Globalization and Its Discontents considers the functions and powers of the main institutions that govern globalization—the IMF, the World Bank, and the World Trade Organization—along with the ramifications of their policies. Examines the effect of global economics on the lives of people in developing countries, concluding that pursuit of free trade in these countries has been disastrous, and explaining why.

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Joseph Stiglitz (b. 1943) is a professor at Columbia University, and has taught at Yale, Princeton, Stanford, MIT, and Oxford. He has been chairman of the Council of Economic Advisers, and chief economist and senior vice president of the World Bank. He was awarded the Nobel Memorial Prize in Economics in 1971.

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  • Informs on Stiglitz’s tenure as an economic adviser to the White House and the Chief Economist at the World Bank.

  • Analyzes the original roles of the IMF, the World Bank, and the WTO, and how they do not live up to their mandates.

  • Examines how the critical transition of a country to a market economy is being carried out, and demands more focus on improving the infrastructure before it happens.

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  • Believes that globalization can be a positive force against poverty, but only if the IMF, World Bank, and WTO become more transparent and improve how they operate.

  • Argues that standard IMF policy has tended to approach countries in financial crises with the same rather crude economics as that used on Wall Street.

  • Regards the IMF as being unhelpful to poorer countries, making them rein in during recessions, and assisting international lenders to get their money when there is the chance a developing country might go bankrupt.

  • Explains that the removal of barriers to free trade and the closer integration of national economics has the potential to enrich everyone in the world, if only it is managed better.

  • Examines the interactions between exchange rates, exchange rate support, inflation, liquidity, government deficits, and monetary and structural reform.

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[At the World Bank] decisions were made on the basis of what seemed a curious blend of ideology and bad economics, dogma that sometimes seemed to be thinly veiling special interests.

Those who vilify globalization too often overlook its benefits.

[The IMF has changed] from serving global economic interests to serving the interests of global finance.

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Further reading


  • Kuttner, Robert. Economic Illusion: False Choices between Prosperity and Social Justice. Boston, MA: Houghton Mifflin, 1984. An examination of the fit between capitalism and political democracy.
  • McMillan, John. Reinventing the Bazaar: A Natural History of Markets. New York: Norton, 2002. An accessible description of markets, as well as an explanation of their underlying mechanisms.
  • Monbiot, George. Manifesto for a New World Order. New York: New Press, 2004. Examines the flaws on the left and right, and offers instead a radical vision of a new global democratic order that transcends the traditional nation-state.

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