*By Bright B. Simons & Franklin Cudjoe *

Professor Stiglitz is in Ghana selling his " Development State " message.

*Wednesday, July 9, 2008*

[image: Stiglitz]He arrived on the 7th of July whereupon his devotees briskly convened a gathering of the West African country's leading businessmen to listen to the famed economist pronounce on the desirability of high taxes in the ultimate quest for sustainable development. If any of his audience was aghast they were too polite to show it.

IMANI people made it a point to be present at the public lecture he gave at the British Council auditorium, situated in the more fashionable district of central Accra , the next day. Rarely in Africa is the power of academic celebrity so efficient at drawing the powerful in the manner demonstrated by Professor Stiglitz. For that alone it was an awesome episode. Perhaps a quarter of the Ghanaian cabinet must have been present. The Finance Minister came a bit late, he nevertheless listened intently throughout the lecture, never showing a sign of discomfort, even when the famed Economist appeared in some of his comments to castigate the free market tendencies of Ghana's ruling party.

We later understood that Professor Stiglitz's visit, though formally coordinated by the respected Institute for Democratic Governance, was at the instance of a former ranking technocrat of the UN system, the Economist K.Y. Amoako, whose own visit to his homeland also had something to do with the new think-and-do (his words) tank he is launching in Accra, the African Center for Economic Transformation. Professor Stiglitz sits on the board of the new organization. Given that the Columbia Academic had also previously worked at the World Bank, it was in evidence that the eminence of the "development industry" was amply represented.

Which made it all the more curious that Professor Stiglitz was so frequently uncharitable about the Bretton Woods system. In a manner more reminiscent of William Easterly than Jeffrey Sachs, the Columbia University Academic at various points in his talk appeared to quarrel with the World Bank and IMF about the latter institutions' lack of modesty. He cited Brazil 's long-running economic growth until the World Bank budged in around the early 80s and scattered all the gains to the four winds. Seeming to praise Morales' brand of political economics in Bolivia, Professor Stiglitz recounted the Latin American country's past dabbling in institution-based free market economics as part of his thorough denunciation of what he called "minimal state" theories of economic management. Said the former economics advisor to Bill Clinton: "they [Bolivian free market ideologues presumably] believed that all you had to do was put in an enabling environment – eliminate inflation for instance – and wait for development to come. They are still waiting." This to wild cheers and rounds of applause.

The theme of the lecture was about what lessons Ghana , and Africa for that matter, may draw from the Asian experience. Professor Stiglitz's emphasis was however on the notion that strong state action is prerequisite to economic development. In his view, even the internet, that often touted bastion of near-anarchic individual initiative, came about as a result of Government (by which he presumably meant DARPA) pro-activity (though he expressed no opinion about Al Gore's more famous claim). At times he was aflame with passion concerning the frequency of market failures. And in certain instances, within the incessant passion, one could see clear flashes of the amazing powers of intellect that earned him The Sveriges Riksbank Prize in Economic Sciences (strictly speaking, there is no "Nobel Prize for Economics").

On the whole, however, IMANI people were less than satisfied with his treatment of what are infinitely complex issues of where to strike the balance between private initiative and government action. Said one of our number: "…my suspicion is that Professor Stiglitz indulges in a bit of strawman argumentation. Except on the fringes of the political spectrum, no one has really been calling for the abolishment of government. What is in contention is how to determine those areas where government or private actors have genuine comparative advantage in the delivery of goods and services in the public interest. If Professor Stiglitz's point is that strong regulation is always invariably good, would he express his support for the Chinese government's efforts to fully regulate the internet? Would he not contend that strong regulation on a democratically deficient continent will lead to more predatory governance as we are seeing in Zimbabwe?"

The Columbia University Academic's response begun with a concession to the point that government abolitionists are rare indeed. He insisted though that there is a genuine difference between "minimal state" theorists and "development state" theories about the proper role of government.

Which of course, dear friends, doesn't answer the question of how one may in practice resolve the real intellectual contention of what general principles should guide one in ascertaining the proper role of government.

IMANI people couldn't help feeling that this was the key insight the 1-hour lecture had skipped.

*Bright B. Simons & Franklin Cudjoe are Libertarians affiliated with IMANI: the Center for Education & Policy (www.imanighana.com) and ** http://www.africanliberty.org*