Question

According to economist Joseph Stiglitz, how and why has globalization been mismanaged?

(relevance: Stiglitz's book 'Globalization and Its Discontents Revisited.)

Answer 1

According to the economist, the globalization is a phenomenon that can benefit all parties across the globe and especially poor people if it is properly managed. Though, the economist says that the globalization has been mismanaged and it is due to the following reasons:

1. The Greed factor and drive for short term profitability among the MNCs and developed countries using world institution such as IMF and World Bank.

2. Capitalizing on the needs of the poor countries and exploiting their resources by offering them the terms & conditions that were not suitable for them in the long run. It only profited the bring MNCs and their parent nations.

3. It brought different types of volatility in the capital market in the country like Russia, Thailand and in Latin American countries for example, as a result of the one sided policy of the global institutions, making poor nations as a happy hunting ground.

The mismanagement of globalization, started when poor countries asked for the financial assistance and developed nations, fueling IMF & World Bank saw it as an opportunity to exploit their resources and use them as a market. It made these institutions to help but with a set of conditions that had a common format such as austerity measures at the government side, privatization of the assets and liberalization of the economies at attractive terms. It delivered policies that were contradictory in nature. These nations could neither improve their economy, nor they built robust regulatory infrastructure to protect themselves. It worsened their situation and it only happened due to the one sided agenda in the name of globalization drive, run by the IMF, World Bank and other global institutions. It created mismanagement of the globalization.