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Joseph Stiglitz: time to scrap the IMF?

Interviewed on Doug Henwood's radio show, former World Bank chief economist and 2001 economics Nobelist Joseph Stiglitz wondered aloud whether it was time to give up hope on reforming the IMF and just scrap it and start from scratch.

To download an MP3 (48 kbps, 1 mb, 3:09), click here. To listen to the whole interview, visit the radio page and scroll down to the August 15, 2002, show.

Joseph Stiglitz, on "Behind the News," broadcast on WBAI, New York, August 15, 2002:

Let's close with the Lenin question: what is to be done? The IMF, it's pretty hard to say it's anything but a disaster. Its star pupils are all down in flames. It's not even able to have any psychological magic, as we've seen with the reaction to its arrangement with Brazil. What kind of rejiggering of this institutional architecture would serve the poor of the world better?

One of the aspects of globalization is that the countries of the world are today more integrated, more interdependent. And with more interdependence, there is greater need for collective action, a greater need as a result for international institutions. International institutions to regulate in one way or another trade, finance, to provide humanitarian assistance. The problem is that some of the institutions we have are not democratic, they're not transparent. They reflect special interests within the more advanced industrial coutnries. They do not represent the concerns of the poor and the developing countries. Now, I used to say that since we are going to need these institutions, it is better to reform them than to start from scratch. I'm beginning to have second thoughts. I'm beginning to ask, has the credibility of the IMF been so eroded that maybe it's better to start from scratch. Is the institution so resistant to learning, to change, to becoming a more democratic institution, that maybe it is time to think about creating some new insitutions that really reflect today's reality, today's greater sense of democracy. When the IMF was founded more than 50 years ago, most of the developing countries were still Third World countries [sic], we had a fixed exchange rate system. The world has changed enormously. Perhaps, now, some 50 years afterwards, it's really time to re-ask the question, should we reform, or we build from the start?