Wednesday, February 27, 2013

The IMF and the white man's burden

A quote from Stiglitz, that suddenly felt very apropos:
"It's not fair to say that IMF economists don't care about the citizens of developing nations. But the older men who staff the fund--and they are overwhelmingly older men--act as if they are shouldering Rudyard Kipling's white man's burden. IMF experts believe they are brighter, more educated, and less politically motivated than the economists in the countries they visit. In fact, the economic leaders from those countries are pretty good--in many cases brighter or better-educated than the IMF staff, which frequently consists of third-rank students from first-rate universities. (Trust me: I've taught at Oxford University, MIT, Stanford University, Yale University, and Princeton University, and the IMF almost never succeeded in recruiting any of the best students.)"
Joseph Stiglitz

9 comments:

  1. Ouch! Where do the best students get recruited then? The Fed or something?

    Oh, and its clear the IMF doesn't care about developing countries. They changed their stance on austerity only after a first world debt crisis -- they'd seen many in the developing world and always held fast to their dogma. We have a controlled experiment. The proof is in the pudding.

    ReplyDelete
    Replies
    1. Yes, and even now they didn't really change it. They are actually pushing for asuterity in Europe. The whole rethinking of macro by Blanchard was to suggest to increase the inflation target from 2 to 4%.

      Delete
    2. http://therealnews.com/t2/index.php?option=com_content&task=view&id=33&Itemid=74&jumival=981

      Delete
    3. Thanks. Best students go through the old boys network to Ivy Universities, and other top ranked departments. That's what Stiglitz meant.

      Delete
    4. Oh, I see. So Stiglitz trains these people in neoclassical economics. Then because they're not quite good enough to get a lecturing position and they didn't quite grasp the extreme subtleties regarding perfect information and instead latched onto the main ideas they were taught they start enacting destructive policies. And then Stiglitz complains about their behavior?

      I appreciate Stiglitz's politics. But its all at odds with the ideas he adheres to. Recently he's saying that income distribution is political -- and yet I have no doubt he teaches in line with marginal productivities.

      "Beware that, when fighting monsters, you yourself do not become a monster... for when you gaze long into the abyss. The abyss gazes also into you." -- Friedrich Nietszche

      Delete
  2. O problema do Stiglitz é ter errado feio o diagnóstico da crise asiática em 1997 e, a partir daí, ter entrado em guerra santa contra o mainstream.

    ReplyDelete
    Replies
    1. Pelo contrario, como diz o ilusionista acima o problema eh que ele nunca rompeu com o mainstream. Politcamente, como o Krugman, ele ate acerta.

      Delete
    2. Just a minute... looking back after more than a decade, it is obvious that the Larry Summers and the IMF were right and Stiglitz was wrong about the Asian Crisis. It is not even close. All the Asian Crisis countries recovered and continued to grow at a fast pace, with open economies and financially integrated to the rest of the world.

      Delete