Nobel  prize-winning US economist Mr Joseph Stiglitz has accused the International Monetary Fund (IMF) of kowtowing to industrialised nations, especially the United States.

"The IMF responds to the interests of financial markets and of advanced industrialised countries," Mr Stiglitz told the conservative French daily Le Figaro. "It does not respond to the real concerns of the developing world."

Mr Stiglitz, who served as an adviser to former US president Mr Bill Clinton and as the World Bank's chief economist, has sharply criticised the IMF for adopting policies that he says hurt consumers, workers and small businesses.

In the interview, the economist charged that Washington had excessive influence over IMF decisions, as it is the only country with the right to veto.

"As the US dominates international financial markets, it's not surprising that the policies of the IMF reflect their point of view," Mr Stiglitz said.

He faulted industrialised countries for championing the benefits of free trade while keeping their own markets closed to foreign exports.

"Under pressure from developed nations, the south opens its borders and gets rid of subsidy programmes, while the north continues to ban products from the south and maintains subsidies to protect its own products," he said.

The economist also hit out at the liberalisation of global capital markets, saying it only created instability in developing nations and did not contribute to economic growth. Mr Stiglitz urged sweeping reforms within the IMF, such as replacing the current governors, increased transparency in decision-making and requiring better training for officials working in the field.

"I'm not very optimistic, as the United States will never give up its right to veto," he lamented.

His recent book, Globalisation and Its Discontents, slams the negative effects of globalisation and the role played by international financial institutions like the IMF, the World Bank and the World Trade Organisation. - (AFP)