America is on the wrong side of history

The US has become an obstacle to reshaping international laws for tax, debt and finance, writes Joseph Stiglitz

The Third International Conference on Financing for Development recently convened in Ethiopia's capital, Addis Ababa. The conference came at a time when developing countries and emerging markets have demonstrated their ability to absorb huge amounts of money productively. Indeed, the tasks that these countries are undertaking - investing in infrastructure (roads, electricity, ports, and much else), building cities that will one day be home to billions, and moving toward a green economy - are truly enormous.

At the same time, there is no shortage of money waiting to be put to productive use. Just a few years ago, Ben Bernanke, then the chairman of the US Federal Reserve Board, talked about a global savings glut. And yet investment projects with high social returns were being starved of funds. That remains true today. The problem, then as now, is that the world's financial markets, meant to intermediate efficiently between savings and investment opportunities, instead misallocate capital and create risk.

Related: Development finance summit: milestone or millstone for the world's poor?