*Stiglitz - International Development*

Well, I have to hand it to Stiglitz. Between his chapter in Making Globalization Work – “The Promise of Development” – and his article in the Frieden and Lake anthology – “International Development: Is It Possible?” – Stiglitz has caused me to reevaluate and clarify some of my opinions concerning the role of states and markets.

As it was pretty clearly established in class, I tend to be a proponent of market-guided policies. This isn’t because I don’t believe in the need for an effective government. Surely, as Stiglitz notes, “[the public sector] should focus its efforts on those areas where the private sector fails”, such as macroeconomic policy, legal systems, and environmental concerns (FL 388). Stiglitz seems relatively even-handed when assessing the positions of markets and governments; neither one is perfect and both require elements of the other to reach an equitable and sustainable balance.

No, it’s not that I categorically object to government intervention. Rather, I fear that oftentimes the developing countries that so desperately need well-run governments and efficient policies are the ones that rarely achieve these goals. Forgive my cynicism, but how can we ensure that developing countries are getting the leadership and fair governing that is necessary to relieve their economic and social hardships.

Clearly, installing politicians to lead a foreign country’s government isn’t effective (read: Iraq). The support of the people must be behind a government for it to be fully integrated and accepted. Yet even in the hands of the people, we are not guaranteed of a successful outcome. Granted I’m noting extreme cases here, yet fascism and communism both had their body of supporters. Moreover, corruption often runs rampant in developing countries where democracy and the free market are not well-established and the population is easily manipulated.

Perhaps what I feel is the most dangerous characteristic of government intervention and policy is that it is fundamentally grounded in the actions of human beings. While the market operates more as a soulless, unflinching machine, the government is led by flawed, self-interested parties. I do believe that people are essentially good and those who lead states care for their populations. Nonetheless, we are all victims of basic human nature. Sometimes we are truly our own worst enemy.

I do enjoy Stiglitz’s views and his unfettered idealism. His case is rational and convincing. Governments that focus on equity, investing in their human capital, and improving standards of living have a far greater rate of success than do corrupt regimes. Of course. And how does Stiglitz propose the West can help developing countries get there? 1) Don’t undermine democracy and 2) Reduce opportunities for corruption (Stiglitz 56). All well and good. I simply wonder if these steps are enough to help transform developing countries into thriving nations with fair and just governments.