Dow Jones News Service via Dow Jones
WASHINGTON (Dow Jones)--The International Monetary Fund is beyond reform and should be abolished, vocal IMF critic and former World Bank Chief Economist Joseph Stiglitz said in a radio interview.
"The IMF has not earned the confidence of the markets; its bailouts have failed a large percentage of the time," Stiglitz said in an interview with Doug Henwood on his Left Business Observer weekly radio show broadcast Thursday in New York.
"With more (global) interdependence there is greater need for more collective action...I used to say since we are going to need these instutions, it is better to reform them than start from scratch," Stiglitz said. "I am beginning to have second thoughts; I am beginning to ask if the credibility of the IMF has been so eroded, it would be better to start from scratch."
Stiglitz described the development of IMF programs as a tightly centralized system of decision-making that results in most advice being dispensed by economists in Washington, D.C., rather than more knowledgeable people working on the ground in the countries having problems. He suggested that the Fund is so resistant to change, it would be difficult to reform it.
The author of Globalization and its Discontents, a book sharply critical of the IMF's performance and that of the Clinton administration's economic team during the Asian economic and financial crisis of the late 1990s, has provoked some defensive reaction from the IMF. Last month, IMF Director of Research Kenneth Rogoff made public a letter to Stiglitz calling his ideas "at best controversial, at worst snake oil."
-By Elizabeth Price, Dow Jones Newswires