World Bank chief economist Joseph E. Stiglitz, a respected analyst whose blunt comments often antagonized the U.S. Treasury and infuriated the International Monetary Fund, will leave the bank at the end of this year.
The World Bank said yesterday that Stiglitz, who was chairman of President Clinton's Council of Economic Advisers before moving to the bank, was returning to an academic post after almost three years as chief economist.
"Joe has been an important and strong voice for the interests of the developing countries, and especially for the poor," World Bank President James D. Wolfensohn said. "We will miss him greatly."
[Stiglitz could not be reached for comment, but in a letter to the executive directors he said he believes that he "can be most effective by expressing myself unfettered from the institutional responsibilities and commitments of the Bank and the associated restraints."]
Wolfensohn, who has occasionally clashed with Stiglitz, said he had asked Stiglitz to continue to work for him as a special adviser and to head the committee looking for a new chief economist at the bank.
"We will carry on with the work . . . to transform the development business as we know it," Wolfensohn said.
The job is a high-profile position that has in the past led to bigger and better things. Previous incumbents include Treasury Secretary Lawrence H. Summers and Stanley Fischer, now No. 2 at the IMF.
The World Bank, set up to help revive a troubled world economic order from the turmoil of World War II, concentrates on development issues and easing poverty, while its sister organization, the IMF, looks more closely at tax and monetary matters.
But the dividing lines between the two institutions blurred as capital started flowing more freely between rich and poor countries and the cash-rich bank helped fund the multibillion-dollar rescue deals in the financial crises of 1997 to 1999.
Stiglitz, 56, lobbied for capital controls at a time when the semi-official "Washington consensus" of the World Bank, IMF and the Clinton administration was pressing countries to liberalize cash flows, and he was sharply critical of the IMF's initial rescue packages for countries caught up in the Asia financial crisis.
Stiglitz, an author of economics textbooks, also lashed out at Washington's recommendations for Russia, which remains mired in economic chaos despite 10 years of stop-and-start reforms and billions of dollars of international aid.
"An excessive reliance was placed on textbook economics," he told a conference in April as World Bank staffers squirmed in embarrassment. "Textbook economics may be good to teach American students, but it may not be so good as a basis for economic advice."
The comments and similar statements led to a public dressing-down for Stiglitz from Wolfensohn.
"I'm always interested to see what he's saying on behalf of the bank," Wolfensohn said during the bank's annual meetings this autumn.
"I think that his recent things about Russia in my judgment are not wholly correct. . . . I think to stand back later and say 'If you'd done it my way, everything would have been different' is a little generous to yourself."
CAPTION: World Bank chief economist Joseph E. Stiglitz has stirred up controversy.