{ "title": "Stiglitz, the IMF and Globalization -- Speech by Thomas C. Dawson, Director, External Relations Department, IMF", "publication": "IMF News, June 13, 2002", "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/sp061302", "canonical": "https://www.imf.org/en/news/articles/2015/09/28/04/53/sp061302", "overlayPath": "/en/news/articles/2015/09/28/04/53/sp061302/index.md", "summary": "Given at the MIT Club of Washington", "authors": [ "Thomas C. Dawson Director" ], "publishDate": "2002-06-13", "sections": [ { "heading": "Context and purpose", "content": "- Delivered to the MIT Club of Washington.\n- Date: June 13, 2002.\n- Speaker: Thomas C. Dawson, Director, External Relations Department, International Monetary Fund.\n- Primary aim: respond to Joseph Stiglitz's criticisms of the IMF and discuss areas of agreement on globalization." }, { "heading": "IMF mandate and evolution", "content": "- IMF described as a multilateral agency with two main jobs:\n - to help preserve global economic and financial stability; and\n - to assist in the global war on poverty.\n- Historical shift in policy posture:\n - Shift toward greater confidence in markets attributed to geopolitical and economic developments in the 1980s and 1990s (collapse of the Soviet Union, fall of the Berlin Wall, and market-oriented reforms in the United States and the United Kingdom).\n - Stiglitz’s academic work highlighted market failures; IMF practice moved toward more use of markets based on historical evidence." }, { "heading": "Main critique addressed: \"market fundamentalism\"", "content": "- Dawson rejects Stiglitz’s overarching charge that the IMF is driven by \"market fundamentalism,\" arguing:\n - IMF staff recognize market imperfections and the need for policy responses.\n - Shift toward markets was a response to evidence and historical developments, not ideological blindness.\n- External perspectives cited:\n - Index comparison in Stiglitz’s book: \"64 references to globalization\" versus \"340\" references to the IMF (presented as an indicator of book focus).\n - Criticism from the right (Brink Lindsey) calls the \"market fundamentalism\" accusation \"misleading to the point of absurdity.\"" }, { "heading": "Personal and institutional criticisms", "content": "- Allegations about staff motives and competence:\n - Stiglitz accuses staff of treating the unemployed \"as just a statistic\" and staying in \"five-star hotels\"; Dawson counters that IMF staff are drawn from \"nearly a 150 countries\" and care about developing countries' suffering.\n - Stiglitz’s remark that IMF staff are \"third-rank students from first-rate universities\" is rebutted by citation of Rudi Dornbusch’s defense of IMF/World Bank staff quality.\n - Specific personnel allegation challenged: Stiglitz’s implication regarding Stanley Fischer and Citigroup is called \"repugnant\" and inconsistent with Fischer's record." }, { "heading": "Acknowledged IMF mistakes and areas of valid criticism", "content": "- Accepted critiques:\n - Excessive zeal in encouraging capital account liberalization in the mid-1990s is acknowledged as a valid criticism in part.\n - IMF conceded errors in initial response to the Asian financial crisis and that it had not kept up with rapid developments in international capital markets.\n- Changes in IMF practice in response:\n - IMF is \"more vocal in pointing out the risks of rapid capital account liberalization\" and gives cautionary notes greater prominence.\n - Example cited: \"three weeks ago ... we advised Sri Lanka against opening up its capital account until its financial sector was further strengthened.\"\n- Fiscal policy during crises:\n - Thailand in July 1997: still growing with \"a huge and growing current account deficit (more than 8 percent of GDP)\"; IMF initially recommended a roughly-unchanged fiscal position but soon supported large budget deficits and increased social spending as crisis scaled up.\n- Monetary policy debate remains unresolved:\n - Stiglitz advocates easing monetary policy at crisis onset; IMF and others (Larry Summers, Rudi Dornbusch, Michael Mussa) emphasize conflict between restoring external confidence and providing liquidity—no professional consensus exists." }, { "heading": "Crisis resolution and sovereign debt restructuring", "content": "- Observed weakness: existing mechanisms to resolve crises \"do not work smoothly.\"\n- Proposal referenced: Anne Krueger’s suggestion for a statutory mechanism to secure more orderly and timely restructuring of unsustainable sovereign debts.\n - Mechanism concept: empower a super-majority of creditors to take key decisions in restructuring negotiations with the debtor.\n - Stiglitz is described as \"quite supportive of the general idea.\"" }, { "heading": "Poverty alleviation and participatory approaches", "content": "- IMF and World Bank have launched a more \"participatory\" approach to poverty measurement and strategy design, engaging governments and civil society early.\n- Stiglitz’s view: participatory assessments \"are a step in the right direction\" but warns that a persistent gap between rhetoric and reality will cause disillusionment." }, { "heading": "Globalization: benefits, distribution, and policy implications", "content": "- Agreement with Stiglitz on benefits of globalization:\n - \"Opening up to international trade has helped many countries grow far more quickly\"; globalization has improved life expectancy and standards of living; access to knowledge has expanded.\n - Quoted Stiglitz view: working in factories can be preferable to subsistence agriculture; globalization reduced isolation in the developing world.\n- Distributional concerns:\n - Benefits are \"spread very unevenly.\"\n - Specific regional observations: unfulfilled expectations in Africa; Latin America’s growth not yet secure; India \"only just emerging from decades of economic slumber.\"\n - Larry Summers cited: in the developing world \"far more people are poor because of too little globalization rather than too much.\"\n - Stiglitz’s counterpoint: critique of \"one-size-fits all\" approaches and excessive zeal/haste in market reforms; advocates allowing countries to experiment with alternatives.\n- Concrete policy recommendation emphasized:\n - Developed countries should lower trade barriers against products in which developing countries have a comparative advantage; Dawson notes Stiglitz’s call here aligns with IMF Managing Director speeches." }, { "heading": "Tone and concluding assessment", "content": "- Dawson frames the debate as having both substantive disagreements and substantial areas of agreement.\n- He identifies two books in Stiglitz’s work:\n - A list of allegations against the IMF containing some valid criticisms amid half-truths and falsehoods.\n - A mainstream analysis of globalization where IMF and Stiglitz share common ground.\n- Final note: speech ends on an expression of harmony regarding globalization policy directions.\n\nSource: Stiglitz, the IMF and Globalization — Speech by Thomas C. Dawson, June 13, 2002.\n\n---\n\n\n References\n\n- Thailand and the IMF\n- Argentina and the IMF\n- United States and the IMF\n- Speeches\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/sp061302" } ], "bullets": [ "[Markdown version](/en/news/articles/2015/09/28/04/53/sp061302/index.md)", "[Structured JSON version](/en/news/articles/2015/09/28/04/53/sp061302/index.json)", "[Bundle manifest](/en/news/articles/2015/09/28/04/53/sp061302/bundle-manifest.json)", "Authors: Thomas C. Dawson Director", "Published: June 13, 2002", "Delivered to the MIT Club of Washington.", "Date: June 13, 2002.", "Speaker: Thomas C. Dawson, Director, External Relations Department, International Monetary Fund.", "Primary aim: respond to Joseph Stiglitz's criticisms of the IMF and discuss areas of agreement on globalization.", "IMF described as a multilateral agency with two main jobs:", "Historical shift in policy posture:", "Dawson rejects Stiglitz’s overarching charge that the IMF is driven by \"market fundamentalism,\" arguing:", "External perspectives cited:", "Allegations about staff motives and competence:", "Accepted critiques:", "Changes in IMF practice in response:", "Fiscal policy during crises:", "Monetary policy debate remains unresolved:", "Observed weakness: existing mechanisms to resolve crises \"do not work smoothly.\"", "Proposal referenced: Anne Krueger’s suggestion for a statutory mechanism to secure more orderly and timely restructuring of unsustainable sovereign debts.", "IMF and World Bank have launched a more \"participatory\" approach to poverty measurement and strategy design, engaging governments and civil society early.", "Stiglitz’s view: participatory assessments \"are a step in the right direction\" but warns that a persistent gap between rhetoric and reality will cause disillusionment.", "Agreement with Stiglitz on benefits of globalization:", "Distributional concerns:", "Concrete policy recommendation emphasized:", "Dawson frames the debate as having both substantive disagreements and substantial areas of agreement.", "He identifies two books in Stiglitz’s work:", "Final note: speech ends on an expression of harmony regarding globalization policy directions.", "[Thailand and the IMF](http://www.imf.org/external/country/THA/index.htm)", "[Argentina and the IMF](http://www.imf.org/external/country/ARG/index.htm)", "[United States and the IMF](http://www.imf.org/external/country/USA/index.htm)", "[Speeches](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2015/09/28/04/53/sp061302/index.md", "json": "/en/news/articles/2015/09/28/04/53/sp061302/index.json", "bundleManifest": "/en/news/articles/2015/09/28/04/53/sp061302/bundle-manifest.json" }, "generatedAtUtc": "2026-09-27T10:06:59.872Z" }