Topics: World Bank, International Monetary Fund, Developing country Pages: 8 (2763 words) Published: May 10, 2013
May 30, 2012
Making the World Work
“Economic theory and historical experience provide guidance on what government needs to do. While markets are at the center of any successful economy, government has to create a climate that allows business to thrive and create jobs. It has to construct physical and institutional infrastructure-laws ensuring, for instance, a sound banking system and securities markets in which investors can have confidence that they are not being cheated...What separates developed from less developed countries is not just the gap in resources but a gap in knowledge…” (Stiglitz 27-28)

Corruption on the global scale has not only put a hold on the development of third world counties, it has also put Globalization on a standstill, has most of the world’s countries’ economies are in a downward spiral. The author of Making Globalization Work is Joseph Eugene Stiglitz, an experienced American economist; stiglitz’s front seat view of the major economic events of the last decade, first as chairman of the Council of Economic Advisers in the Clinton Administration (1993-95) and then as chief economist at the World Bank (1997-2000) has shaped his responses. He is very concerned with what he perceives as the helplessness of developing nations as the International Monetary Fund (IMF), World Bank, and other major institutions pushed by multinationals, put the thin interests of the financial community, especially Wall Street ahead of the poorer nations. Tackling the issue of supporting developing countries, Stiglitz states that developed countries should not undermine democracy in developing countries and should limit bank secrecy, increase transparency and enforce anti-bribery measures. Successful development requires more than providing resources and new opportunities to developing countries, which should be accompanied by a wise usage of these resources, a functional system of public and private institutions and a healthy decision-making process. In order for globalization to succeed, the world’s nations must work as whole and create equal opportunities for all countries, ending the unequal treatment of less developed countries and taking into consideration our environment as a global entity. The first concern being that the rules governing globalization favors developed countries, while the developing countries sink even lower. Globalization leans towards helping the already powerful and developed countries, making their grasp on the world economy stronger and tighter. There are many factors contributing to this capitalist style of world economy as many agencies are actually in favor of corrupting these less advance and inform nations as the Washington Consensus, International Monetary Fund (IMF), the World Trade Organization (WTO) and of course the World Bank are making the life of these countries difficult. Developing countries borrow a large amount of funds from other countries and the World Bank which essentially causes them to give up the benefits of their democracy because of the strings attached to the loan repayment. They are deceived into loans by agencies like the World Bank or IMF, in which they are not able to pay back and only increase their national debt. Thus bring turmoil to the country as a whole, from the rich to the poor, causing rebelling within the country. The effect is a wider gap between the economic stability of third-world countries and their developed neighbors. Critics of the World Bank and the IMF hold them as being somewhat indirectly accountable downward spiral Africa and other Third World countries into poverty and hardship. Therefore, the burden falls on them to share the responsibility for Third World foreign debts, and they should thus pay the developing countries an acceptable compensation for the troubles and embarrassments that they have in one way or another caused them. Globalization, when not carried out in the right spirit of humane consensus, could very...
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