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. Last Updated: 07/27/2016

EDITORIAL: World Bank's Stiglitz vs. Camdessus




When Michel Camdessus announced in November that he would step down after 13 years at the head of the International Monetary Fund, Russian elites gasped. Grave Cabinet members spoke of Russia losing its best friend - Camdessus was the last, best advocate of multi-billion-dollar loans to the Kremlin.


Next month Camdessus will be gone, and it is the No. 1 pastime of high-finance wonks and business journalists to speculate about his successor.


Two weeks after Camdessus, Joseph Stiglitz was the next to announce that he was stepping down, after less than three years as chief economist of the World Bank. (The Bank is the IMF's Siamese twin - both pool the resources of dozens of nations, then share them back out in the name of international economic development.)


Stiglitz's resignation - far the more significant event - went virtually unnoted in Moscow. This is all the stranger given that Stiglitz's departure - he is finishing up this week, the BBC reports - actually provides a clear answer to all the handwringing about what the post-Camdessus era will be like.


That answer is: It will be the same. Provided it does not bring about its own isolation, Russia in the 21st century will continue to get IMF and World Bank money. That cash will come with the same strings attached to loans, i.e. with Washington's Sermon on the Mount about tax collection and the moral imperative of privatization.


As now, this advice will be flawed; but as now, Russia will be free to ignore it (provided that it is sufficiently contrite about doing so).


That is the warning flare Stiglitz has sent up with his resignation. An economist many mention as a Nobel Prize candidate, Stiglitz had launched a blistering attack on World Bank and IMF economic advice to Russia (and to other nations). World Bank President James Wolfenson would hold Stiglitz up as evidence that his Bank was an intellectual hothouse - even as Stiglitz himself was marginalized, and forced to stop speaking out against the ruling orthodoxies. Declaring it hopeless, Stiglitz quit.


And so, like that other international bureaucracy in the midst of disturbing mission creep, NATO, the World Bank and the IMF march inexorably forward. None of these three organizations could be said to be democratically accountable; all get bigger, more dogmatic and more expensive every year.


This is a system that suits the nomenklatura, East and West. It is less salutary for democracy or economic freedoms - values that would have been advanced had the critiques of Stiglitz been heeded.


- Matt Bivens