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Published: January 10, 2014 00:23 IST | Updated: January 10, 2014 00:23 IST

If India is corrupt, U.S. is a good competitor

Special Correspondent

Joseph E. Stiglitz says the American-style capitalism is clearly not working, with clearly widening inequality. Photo: K. Gopinathan

Americas growth story has been anti-poor : Nobel laureate

To say that Indias corruption is extraordinary is a comparative statement, said Joseph E. Stiglitz, professor atColumbia University and winner of the Nobel Prize for Economics. I would say that the United States of America is agood competitor for the title.

While Indias corruption cannot be underestimated, the U.S., he said, is equally corrupt in its own style. Whether

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it is the drug industrys infamous stranglehold over the government, Walmarts lobbying activities, or indeed thecurrent crisis in the financial sector, corruption is rife and particularly so in the corporate sector, Prof. Stiglitz said

at an interaction with the media on Thursday at the Indian Institute of Science.

It would be nice if everyone was honest but that is not what we are. We have to design economic systems that buildin checks and balances and that are inherently transparent, he said.

The impact of corruption in India cannot, however, be underestimated. The telecom scam and the coal scam, forinstance, have dented peoples confidence in the government. But solving corruption does not necessarily lead toeconomic growth.

U.S. anti-poor

It is ironic, said Prof. Stiglitz, that although the American-style capitalism is clearly not working, with clearlywidening inequality, this is what the world emulates. The U.S.s growth story has been anti-poor and anti-middleclass, Prof. Stiglitz said.

The view that privatisation will increase efficiency has been discredited. Trickle-down economies have beendiscredited, neo-liberal policies have been discredited, and the 2008 crisis was empirical validation of this, said Prof.Stiglitz.

Bill Gates is doing well but that doesnt mean the United State of America is. It is a trickle up economy. The medianincome of a full-time male worker in the U.S. is less than what it used to be four decades ago, and one in seven peoplelooking for a full-time job do not get one, Prof. Stiglitz said at lecture he delivered on Globalisation, StructuralChange and Inequality at I.I.Sc., organised by Azim Premji University.

Keywords: India corruption, USA, Joseph E. Stiglitz, USA corruption, capitalism, Trickle-down economies

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