The global crisis, social protection and jobs

Authors

  • Joseph STIGLITZ

    1. Columbia University; Chair of the Commission of Experts of the President of the United Nations General Assembly on Reforms of the International Monetary and Financial System; and winner of the 2001 Nobel Prize in Economic Sciences.
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  • This article is based on an address to the Governing Body of the ILO, delivered in Geneva on 12 March 2009 on the occasion of the award to the author of the 2008 ILO Decent Work Research Prize.

  • Responsibility for opinions expressed in signed articles rests solely with their authors and publication does not constitute an endorsement by the ILO.

Abstract.

Policy responses to the global financial meltdown of 2008 and the collapse of aggregate demand have largely been driven by domestic interests. Resurgent protectionism, bank bail-outs and national-level stimulus packages are distorting competition and incentives to the detriment of developing countries, much-needed spending on social protection and, ultimately, rapid global economic recovery. Warning against underestimation of the job-destruction potential of the current crisis, the author argues for a truly global stimulus package, together with a rethink of economic paradigms and regulatory policies, financial assistance to developing countries, a less constraining IMF, and stronger social protection as an automatic stabilizer of economies.

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