a review

            The book "Globalization and its Discontents" by Joseph Stiglitz deals with the issue of globalization but more so on the discontents that the International Monetary Fund, known as the IMF, has brought upon the developing countries in implementing its policies. Stiglitz argues that the IMF, in lending funds to the countries, imposes its one-size-fits all policy, in the belief that there was "a need for collective action at the global level for economic stability". He states that although the IMF had the original belief that markets often worked badly, it changed over time and today it is actually championing market supremacy. It is in this fervor, Stiglitz adds, that the IMF, instead of encouraging increase in expenditures and reduce in taxes or interest rates, today usually provides funds only if the countries engage in policies like cutting deficits and raising taxes or interest rates that lead to a contraction of the economy. .
             In his book, Stiglitz argues that globalization "has the power to do enormous good" if the countries who embrace it do so "under their own terms", without having to accommodate IMF-imposed policies. To support this claim, Stiglitz makes mention of the fuel and food subsidies cut in Indonesia, Morocco and Papua New Guinea, the IMF-forced cutbacks in health expenditure in Thailand resulting in AIDS increase, and the education cutbacks in many of the developing countries. Along this line, he makes a very good example in his discussion of Ethiopia's struggle with the IMF in Chapter Two of his book. The following paragraph draws heavily on that chapter (2002, p. 25-33). .
             Stiglitz outlines IMF's worries that if Ethiopia's revenues from foreign assistance dries up, then Ethiopia would be in trouble; IMF's logic is that the money should instead be put to reserves and that Ethiopia's spending should be limited to the revenue it derives from the taxes it collects.