## WORLD TRADE DEFENDER

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### Career overview and public positions
- Former US President Donald Trump’s multibillion-dollar trade war with China prompted Anne O. Krueger to publish a 300-page book in 2020, International Trade: What Everyone Needs to Know, arguing that protectionism harms the global economy: “Protection does not create jobs,” and “Should the trade war continue, the economic damage to the entire world will increase.”
- At the age of 89, Krueger continues active engagement: frequent speaking engagements and a monthly column for Project Syndicate with recent titles including “America’s Industrial Policy Is Counterproductive,” “Multilateralism Is Still Better,” and “Sleepwalking into a Global Trade War.”
- She critiques recent US trade policy shifts: “It’s discouraging… the Biden administration has turned highly protectionist. It will hurt the US and the rest of the world.”

### Research findings and contributions to trade theory
- Career span: more than six decades of research in India, South Korea, and Türkiye that influenced policymaking on trade and development.
- Early fieldwork:
  - On assignment for the US Agency for International Development in 1965 in Türkiye, documented smuggling and waste caused by exchange controls and import curbs (examples included exportation of shiploads of stones to collect export subsidies, misgrading of tobacco, wasteful stockpiling of spare parts and machines).
  - In 1968 studied more than 50 auto parts suppliers in India; firms sometimes kept “three sets of books — that for the taxman, that for the public, and that for purposes of management.”
- Landmark publications and impact:
  - “The Political Economy of the Rent-Seeking Society,” published in 1974 in the American Economic Review, documented welfare costs of trade restrictions and import licenses and helped launch “a voluminous literature on the role of corruption and governance in the process of economic development.”
  - One of her papers was listed among the top 20 articles in the first century of the American Economic Review through 2010.
  - Collaborative project with Jagdish Bhagwati in the 1970s studied trade policies in 10 developing economies; results showed the costs of restrictive import policies outweighed the benefits. Since the 1980s, most developing countries “have removed most of their quantitative restrictions, moved to more realistic exchange rates, and greatly lowered their tariffs.”
- Empirical cases:
  - South Korea’s post-1950s trade liberalization coincided with rapid economic takeoff, which Krueger cites as evidence of broad benefits from open trade policies.
- Broader view: “Economic growth also generates the resources with which societal problems such as those with the environment can be more effectively tackled,” and as people escape poverty, demands for public goods increase.

### Roles at international institutions and influence on policy
- Academic and institutional roles:
  - Professor at the University of Minnesota, Duke, Stanford, Johns Hopkins, and elsewhere.
  - Chief economist of the World Bank during 1982–86.
  - First deputy managing director of the IMF during 2001–06.
- World Bank achievements:
  - As chief economist, influenced the World Bank’s 1983 annual report to stop lending for government-owned tourism facilities and to discriminate less against investing in agriculture.
- Influence on staffing and institutional focus:
  - In 2003, as first deputy managing director of the IMF, Krueger recruited Raghuram Rajan to be chief economist to strengthen the IMF’s understanding of the financial industry after the Asian financial crisis.

### Sovereign debt restructuring (SDRM) initiative and debt crisis views
- Developed the proposal for a sovereign debt restructuring mechanism (SDRM) during her IMF tenure; the proposal aimed to:
  - Have the IMF play a central role in helping debtor nations work out restructuring plans equitable for creditors, including private financial institutions.
  - Include features of corporate bankruptcy such as protection from creditor lawsuits.
  - Construct an international legal framework enabling a majority of creditors to make binding decisions for all creditors to eliminate holdouts.
- Political and institutional outcomes:
  - The SDRM proposal was killed for political reasons and faced opposition from the US, the UK, and the Group of Seven.
  - The international community instead adopted collective action clauses in government bonds to allow a majority of bondholders to make decisions applying to all.
  - Colleagues assert the SDRM “died a political death, but not an intellectual death.”
- Contemporary concerns:
  - In April 2023 Krueger argued the world’s poor suffer when sovereign-debt processes fail, citing Sri Lanka’s crisis: inability to obtain debt relief prevented purchase of food, fuel, medicines, and other necessities.
  - She noted that China accounts for almost half of all lending to poor countries and that China’s “refusal to take the same haircut as other creditors” poses a major obstacle to resolving sovereign-debt crises.
- Ongoing stance: Krueger maintains that the SDRM “has to go into effect someday.”

### Legacy, recognition, and barriers broken
- Professional recognition:
  - Dozens of books and research papers; one paper among top 20 in the American Economic Review’s first century.
  - Longtime nominations by peers for the Nobel Prize for the impact of her trade research.
- Mentorship and institutional legacy:
  - Trained generations of economists and influenced major institutions’ approaches to trade, development, and financial-sector analysis.
- Breaking gender barriers:
  - First female first deputy managing director of the IMF; served as a personal inspiration and role model for women in economics.
  - Colleagues describe her as a “force of nature,” “tough cookie,” and “absolutely transformative figure.”

*FINANCE & DEVELOPMENT, June 2023 — People in Economics profile of Anne O. Krueger*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2023/june/pie-june23.pdf_