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Mano a Mano

Mano a Mano. Overview of Stiglitz (chs. 1-2). Promise of globalization (“prosperity for all”) has failed Unbalanced outcomes within and between nations (“rich countries and poor people”) Globalization has unified people against globalization – “They’ve got a point!”

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Mano a Mano

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  1. Mano a Mano

  2. Overview of Stiglitz (chs. 1-2) • Promise of globalization (“prosperity for all”) has failed • Unbalanced outcomes within and between nations (“rich countries and poor people”) • Globalization has unified people against globalization – “They’ve got a point!” • Stiglitz will tell us how to make globalization work

  3. Specific Indictments • Rules of conduct unfair and favor developed countries (DC) • Material values over “social” values • Eroded less developed countries (LDC) sovereignty and undermined democracy • Some winners, many losers • “Anglo-American economic model” forced on LDC

  4. Making Globalization Work • Poverty reduction with more gradualism • More aid and debt relief, fewer conditions • New trading rules since trade and growth has not worked • More capital market controls (“hot money”) • More environmental protection • Address failed global governance

  5. Nation States and Globalization • Isolation to autarky not unfettered capitalism – large role of government • Autarky to globalization undermines role of government and ability to create institutions in LDC • Need global agreements/governance to solve problems created by globalization • Current institutions are failing because…

  6. The Wasington Consensus • Obsession with free markets and total GDP • Smaller government • Privatization • Free international trade • Free international capital markets • Deregulation • ASSUMES: perfect information, perfect competition, perfect risk markets

  7. The Stiglitz Approach • “Comprehensive approach” • Proactive, highly interventionist government for development • More equity and protection for the poor • Emphasis on education • Emphasis on community • Assumes failure of Washington Consensus assumptions

  8. The Evidence • East Asia – Stiglitz grade: A+ • Latin America – C • Africa -- D • Sub-Saharan Africa -- F • Russia & “transition economies“ – F-

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