The Washington Consensus is a set of ten economic policy prescriptions considered to constitute the "standard" reform package promoted for
crisis-wracked developing countries
A developing country is a sovereign state with a lesser developed industrial base and a lower Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is also no clear agreem ...
by Washington, D.C.-based institutions such as the
International Monetary Fund
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster glo ...
(IMF),
World Bank
The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...
and
United States Department of the Treasury
The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing and ...
.
[Williamson, John]
"What Washington Means by Policy Reform"
, in: Williamson, John (ed.): ''Latin American Readjustment: How Much has Happened'', Washington: Peterson Institute for International Economics
The Peterson Institute for International Economics (PIIE), known until 2006 as the Institute for International Economics (IIE), is an American think tank based in Washington, D.C. It was founded by C. Fred Bergsten in 1981 and has been led by ...
1989. The term was first used in 1989 by English economist
John Williamson. The prescriptions encompassed free-market promoting policies
in such areas as macroeconomic stabilization, economic opening with respect to both trade and investment, and the expansion of market forces within the domestic economy.
Subsequent to Williamson's use of the terminology, and despite his emphatic opposition, the phrase Washington Consensus has come to be used fairly widely in a second, broader sense, to refer to a more general orientation towards a strongly market-based approach (sometimes described as
market fundamentalism
Market fundamentalism, also known as free-market fundamentalism, is a term applied to a strong belief in the ability of unregulated ''laissez-faire'' or free-market capitalist policies to solve most economic and social problems. It is often used ...
or
neoliberalism
Neoliberalism (also neo-liberalism) is a term used to signify the late 20th century political reappearance of 19th-century ideas associated with free-market capitalism after it fell into decline following the Second World War. A prominent fa ...
). In emphasizing the magnitude of the difference between the two alternative definitions, Williamson has argued that his ten original, narrowly defined prescriptions have largely acquired the status of "motherhood and apple pie" (i.e., are broadly taken for granted), whereas the subsequent broader definition, representing a form of neoliberal manifesto, "never enjoyed a consensus
n Washingtonor anywhere much else" and can reasonably be said to be dead.
Discussion of the Washington Consensus has long been contentious. Partly this reflects a lack of agreement over what is meant by the term, but there are also substantive differences over the merits and consequences of the policy prescriptions involved. Some critics take issue with the original Consensus's emphasis on the opening of developing countries to global markets, and/or with what they see as an excessive focus on strengthening the influence of domestic market forces, arguably at the expense of key functions of the state. For other commentators, the issue is more what is ''missing'', including such areas as institution-building and targeted efforts to improve opportunities for the weakest in society.
History
Original sense: Williamson's Ten Points
The concept and name of the Washington Consensus were first presented in 1989 by
John Williamson, an economist from the
Institute for International Economics
The Peterson Institute for International Economics (PIIE), known until 2006 as the Institute for International Economics (IIE), is an American think tank based in Washington, D.C. It was founded by C. Fred Bergsten in 1981 and has been led by ...
, an international economic
think tank
A think tank, or policy institute, is a research institute that performs research and advocacy concerning topics such as social policy, political strategy, economics, military, technology, and culture. Most think tanks are non-governmenta ...
based in Washington, D.C.
The consensus as originally stated by Williamson included ten broad sets of relatively specific policy recommendations:
#
Fiscal policy
In economics and political science, fiscal policy is the use of government revenue collection (taxes or tax cuts) and expenditure to influence a country's economy. The use of government revenue expenditures to influence macroeconomic variab ...
discipline, with avoidance of large fiscal deficits relative to GDP;
# Redirection of public spending from subsidies ("especially indiscriminate subsidies") toward broad-based provision of key pro-growth, pro-poor services like primary education,
primary health care
Primary health care, or PHC, refers to "essential health care" that is based on scientifically sound and socially acceptable methods and technology. This makes universal health care accessible to all individuals and families in a community. PHC in ...
and infrastructure investment;
#
Tax reform
Tax reform is the process of changing the way taxes are collected or managed by the government and is usually undertaken to improve tax administration or to provide economic or social benefits. Tax reform can include reducing the level of taxati ...
, broadening the tax base and adopting moderate marginal tax rates;
#
Interest rate
An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, ...
s that are market determined and positive (but moderate) in real terms;
# Competitive
exchange rates;
#
Trade liberalization
Free trade is a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade. In government, free trade is predominantly advocated by political parties that hold econ ...
: liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform
tariff
A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and pol ...
s;
# Liberalization of inward
foreign direct investment;
#
Privatization
Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...
of
state enterprises;
#
Deregulation: abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudential oversight of
financial institution
Financial institutions, sometimes called banking institutions, are business entities that provide services as intermediaries for different types of financial monetary transactions. Broadly speaking, there are three major types of financial inst ...
s;
# Legal security for
property right
The right to property, or the right to own property (cf. ownership) is often classified as a human right for natural persons regarding their possessions. A general recognition of a right to private property is found more rarely and is typically ...
s.
Origins of policy agenda
Although Williamson's label of the Washington Consensus draws attention to the role of the Washington-based agencies in promoting the above agenda, a number of authors have stressed that Latin American policy-makers arrived at their own packages of policy reforms primarily based on their own analysis of their countries' situations. Thus, according to
Joseph Stanislaw
Joseph Stanislaw is a financial adviser on international markets and politics. He is also the co-founder and former president of Cambridge Energy Research Associates, an energy research consultancy that was acquired in 2004 by IHS Energy.
Sta ...
and
Daniel Yergin
Daniel Howard Yergin (born February 6, 1947) is an American author, speaker, energy expert, and economic historian. Yergin is vice chairman of S&P Global. He was formerly vice chairman of IHS Markit, which merged with S&P in 2022. He founded C ...
, authors of ''
The Commanding Heights
''The Commanding Heights: The Battle for the World Economy'' is a book by Daniel Yergin and Joseph Stanislaw first published as ''The Commanding Heights: The Battle Between Government and the Marketplace That Is Remaking the Modern World'' in ...
'', the policy prescriptions described in the Washington Consensus were "developed in Latin America, by Latin Americans, in response to what was happening both within and outside the region."
Joseph Stiglitz has written that "the Washington Consensus policies were designed to respond to the very real problems in Latin America and made considerable sense" (though Stiglitz has at times been an outspoken critic of IMF policies as applied to developing nations). In view of the implication conveyed by the term Washington Consensus that the policies were largely external in origin, Stanislaw and Yergin report that the term's creator, John Williamson, has "regretted the term ever since", stating "it is difficult to think of a less diplomatic label."
Williamson regretted the use of "Washington" in the Washington Consensus, as it incorrectly suggested that development policies stemmed from Washington and were externally imposed on others.
Williamson said in 2002, "The phrase "Washington Consensus" is a damaged brand name... Audiences the world over seem to believe that this signifies a set of neoliberal policies that have been imposed on hapless countries by the Washington-based international financial institutions and have led them to crisis and misery. There are people who cannot utter the term without foaming at the mouth. My own view is of course quite different. The basic ideas that I attempted to summarize in the Washington Consensus have continued to gain wider acceptance over the past decade, to the point where
Lula has had to endorse most of them in order to be electable. For the most part they are motherhood and apple pie, which is why they commanded a consensus."
[Williamson J. (2002)]
''Did the Washington Consensus Fail?''
According to a 2011 study by
Nancy Birdsall
Nancy Birdsall (born 6 February 1946) is an American economist, the founding president of the Center for Global Development (CGD) in Washington, DC, USA, and former executive vice-president of the Inter-American Development Bank. She co-founded ...
,
Augusto de la Torre
Augusto is an Italian, Portuguese, and Spanish given name or surname. Notable people with the name include:
* Augusto Aníbal
*Augusto dos Anjos
* Augusto Arbizo
*Augusto Barbera (born 1938), Italian law professor, politician and judge
*Augusto ...
, and
Felipe Valencia Caicedo, the policies in the original consensus were largely a creation of Latin American politicians and technocrats, with Williamson's role having been to gather the ten points in one place for the first time, rather than to "create" the package of policies.
Kate Geohegan of
Harvard University
Harvard University is a private Ivy League research university in Cambridge, Massachusetts. Founded in 1636 as Harvard College and named for its first benefactor, the Puritan clergyman John Harvard, it is the oldest institution of high ...
's
Davis Center for Russian and Eurasian Studies The following is a list of academic research centers devoted to Russian studies, or Slavic studies, encompassing the area of the former Soviet Union, sometimes referred to as Eurasia:
# Arizona State University The Melikian Center: Russian, Eurasi ...
credited Peruvian neoliberal economist
Hernando de Soto for inspiring the Washington Consensus.
Williamson partly credited de Soto himself for the prescriptions, saying his work was "the outcome of the worldwide intellectual trends to which Latin America provided" and said that de Soto was directly responsible for the recommendation on legal security for property rights.
Broad sense
The Washington Consensus is not interchangeable with the term "neoliberalism."
Williamson recognizes that the term has commonly been used with a different meaning from his original prescription; he opposes the alternative use of the term, which became common after his initial formulation, to cover a broader market fundamentalism or "
neoliberal" agenda.
More specifically, Williamson argues that the first three of his ten prescriptions are uncontroversial in the economic community, while recognizing that the others have evoked some controversy. He argues that one of the least controversial prescriptions, the redirection of spending to infrastructure, health care, and education, has often been neglected. He also argues that, while the prescriptions were focused on reducing certain functions of government (e.g., as an owner of productive enterprises), they would also strengthen government's ability to undertake other actions such as supporting education and health. Williamson says that he does not endorse market fundamentalism, and believes that the Consensus prescriptions, if implemented correctly, would benefit the poor.
[Williamson J. (2000)]
''What Should the Bank Think about the Washington Consensus?''
. In a book edited with Pedro-Pablo Kuczynski in 2003, Williamson laid out an expanded reform agenda, emphasizing crisis-proofing of economies, "second-generation" reforms, and policies addressing inequality and social issues.
As noted, in spite of Williamson's reservations, the term Washington Consensus has been used more broadly to describe the general shift towards free market policies that followed the
displacement of Keynesianism
The post-war displacement of Keynesianism was a series of events which from mostly unobserved beginnings in the late 1940s, had by the early 1980s led to the replacement of Keynesian economics as the leading theoretical influence on economic life ...
in the 1970s. In this broad sense the Washington Consensus is sometimes considered to have begun at about 1980.
[
] Many commentators see the consensus, especially if interpreted in the broader sense of the term, as having been at its strongest during the 1990s. Some have argued that the consensus in this sense ended at the turn of the century, or at least that it became less influential after about the year 2000.
More commonly, commentators have suggested that the Consensus in its broader sense survived until the time of the
2008 global financial crisis
8 (eight) is the natural number following 7 and preceding 9.
In mathematics
8 is:
* a composite number, its proper divisors being , , and . It is twice 4 or four times 2.
* a power of two, being 2 (two cubed), and is the first number of t ...
.
Following the
strong intervention undertaken by governments in response to market failures, a number of journalists, politicians and senior officials from global institutions such as the World Bank began saying that the Washington Consensus was dead. These included former British Prime Minister
Gordon Brown
James Gordon Brown (born 20 February 1951) is a British former politician who served as Prime Minister of the United Kingdom and Leader of the Labour Party from 2007 to 2010. He previously served as Chancellor of the Exchequer in Tony B ...
, who following the
2009 G-20 London summit
The 2009 G20 London Summit was the second meeting of the G20 heads of government/heads of state, which was held in London on 2 April 2009 at the ExCeL Exhibition Centre to discuss financial markets and the world economy. It followed the first ...
, declared "the old Washington Consensus is over". Williamson was asked by ''
The Washington Post
''The Washington Post'' (also known as the ''Post'' and, informally, ''WaPo'') is an American daily newspaper published in Washington, D.C. It is the most widely circulated newspaper within the Washington metropolitan area and has a large nati ...
'' in April 2009 whether he agreed with Gordon Brown that the Washington Consensus was dead. He responded:
After the
2010 G-20 Seoul summit
The 2010 G20 Seoul Summit was the fifth meeting of the G20 heads of government/heads of state, to discuss the global financial system and the world economy,Cho Jin-seo "Seoul unveils G20 summit's symbol," ''Korea Times'' (ROK). July 8, 2010; ...
announced that it had achieved agreement on a
Seoul Development Consensus, the ''
Financial Times
The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Ni ...
'' editorialized that "Its pragmatic and pluralistic view of development is appealing enough. But the document will do little more than drive another nail into the coffin of a long-deceased Washington consensus."
Context
The widespread adoption by governments of the Washington Consensus was to a large degree a reaction to the
macroeconomic
Macroeconomics (from the Greek prefix ''makro-'' meaning "large" + ''economics'') is a branch of economics dealing with performance, structure, behavior, and decision-making of an economy as a whole.
For example, using interest rates, taxes, and ...
crisis that hit much of Latin America, and some other developing regions, during the 1980s. The crisis had multiple origins: the drastic rise in the price of imported oil following the emergence of
OPEC, mounting levels of external debt, the rise in US (and hence international) interest rates, and—consequent to the foregoing problems—loss of access to additional foreign credit. The import-substitution policies that had been pursued by many developing country governments in Latin America and elsewhere for several decades had left their economies ill-equipped to expand exports at all quickly to pay for the additional cost of imported oil (by contrast, many countries in East Asia, which had followed more
export-oriented strategies, found it comparatively easy to expand exports still further, and as such managed to accommodate the external shocks with much less economic and social disruption). Unable either to expand external borrowing further or to ramp up export earnings easily, many Latin American countries faced no obvious sustainable alternatives to reducing overall domestic demand via greater fiscal discipline, while in parallel adopting policies to reduce protectionism and increase their economies' export orientation.
Many countries have endeavored to implement varying components of the reform packages, the implementation sometimes being a condition for receiving loans from the IMF and World Bank.
Effects
According to a 2020 study, the implementation of policies associated with the Washington Consensus significantly raised real GDP per capita over a 5- to 10-year horizon. According to a 2021 study, the implementation of the Washington Consensus in Brazil, Chile, and Mexico had "mixed results": "macroeconomic stability is much improved, but economic growth has been heterogeneous and generally disappointing, despite improvement relative to the 1980s." Another 2021 study found that the implementation of the Washington Consensus in sub-Saharan Africa led to "initial declines in per capita economic growth over the 1980s and 1990s" but "notable increases in per capita real GDP growth in the post–2000 period."
The study found that "the ability to implement pro-poor policies alongside market-oriented reforms played a central role in successful policy performance."
Argentina
![Menem con banda presidencial](https://upload.wikimedia.org/wikipedia/commons/1/14/Menem_con_banda_presidencial.jpg)
The
Argentine economic crisis of 1999–2002 is held out as an example of the economic consequences said by some to have been wrought by application of the Washington Consensus. Many economists, however, challenge the view that Argentina's failure can be attributed to close adherence to the Washington Consensus. The country's adoption of an idiosyncratic fixed exchange rate regime (the
convertibility plan), which became increasingly uncompetitive, together with its failure to achieve effective control over its fiscal accounts, both ran counter to central provisions of the Consensus, and paved the way directly for the ultimate macroeconomic collapse. The market-oriented policies of the early Menem-Cavallo years, meanwhile, soon petered out in the face of domestic political constraints (including Menem's preoccupation with securing re-election).
In October 1998, the IMF invited Argentine President
Carlos Menem, to talk about the successful Argentine experience, at the Annual Meeting of the Board of Governors.
President Menem's Minister of Economy (1991–1996),
Domingo Cavallo
Domingo Felipe Cavallo (born July 21, 1946) is an Argentine economist and politician. Between 1991 and 1996 he was Economic Ministry of Argentina during Carlos Menem presidency. He is known for implementing the '' Convertibility plan'', which ...
, the architect of the Menem administration's economic policies, specifically including "convertibility", said:
The problems which arise with reliance on a fixed exchange rate mechanism (above) are discussed in the World Bank report ''Economic Growth in the 1990s: Learning from a Decade of Reform'', which questions whether expectations can be "positively affected by tying a government's hands". In the early 1990s there was a point of view that countries should move to either fixed or completely flexible exchange rates to reassure market participants of the complete removal of government discretion in foreign exchange matters. After the Argentina collapse, some observers believe that removing government discretion by creating mechanisms that impose large penalties may, on the contrary, actually itself undermine expectations. Velasco and Neut (2003)
[ NBER Working Paper No. 9932. National Bureau of Economic Research, Cambridge,
Massachusetts] "argue that if the world is uncertain and there are situations in which the lack of discretion will cause large losses, a
precommitment device can actually make things worse".
In chapter 7 of its report (''Financial Liberalization: What Went Right, What Went Wrong?'') the World Bank analyses what went wrong in Argentina, summarizes the lessons from the experience, and draws suggestions for its future policy.
The IMF's
Independent Evaluation Office The Independent Evaluation Office is an autonomous body established in 2001 to conduct independent evaluations of policies and activities of the International Monetary Fund.
See also
* The World Bank Group's Independent Evaluation Group
The Indep ...
has issued a review of the lessons of Argentina for the institution, summarized in the following quotation:
While President
Néstor Kirchner
Néstor Carlos Kirchner (; 25 February 195027 October 2010) was an Argentine lawyer and politician who served as the President of Argentina from 2003 to 2007, Governor of Santa Cruz Province from 1991 to 2003, Secretary General of UNASUR and ...
's reliance on price controls and similar administrative measures (often aimed primarily at ''foreign-invested'' firms such as utilities) clearly ran counter to the spirit of the Consensus, his administration in fact ran an extremely tight fiscal ship and maintained a highly competitive floating exchange rate; Argentina's immediate bounce-back from crisis, further aided by abrogating its debts and a fortuitous boom in prices of primary commodities, leaves open issues of longer-term sustainability. ''The Economist'' has argued that the Néstor Kirchner administration will end up as one more in Argentina's long history of populist governments. In October 2008, Kirchner's wife and successor as president,
Cristina Kirchner
Cristina is a female given name, and it is also a surname. Notable people with the name include:
Given name
*Cristina (daughter of Edward the Exile), 11th-century English princess
*Cristina (singer), Cristina Monet-Palaci (1956–2020), American s ...
, announced her government's intention to nationalize pension funds from the privatized system implemented by Menem-Cavallo. Accusations have emerged of the manipulation of official statistics under the Kirchners (most notoriously, for inflation) to create an inaccurately positive picture of economic performance. ''The Economist'' removed Argentina's inflation measure from its official indicators, saying that they were no longer reliable.
In 2003, Argentina's and Brazil's presidents, Néstor Kirchner and
Luiz Inacio Lula da Silva Luiz is a Portuguese given name that is an alternative form of Luís. It's archaic in Portugal, but common in Brazil. Notable people referred to by this name include the following:
People
*Luiz Bonfá (1922-2001), Brazilian guitarist and composer
...
signed the "Buenos Aires Consensus", a manifesto opposing the Washington Consensus' policies. Skeptical political observers note, however, that Lula's rhetoric on such public occasions should be distinguished from the policies actually implemented by his administration.
Venezuela
![Caracazo](https://upload.wikimedia.org/wikipedia/commons/a/a6/Caracazo.jpg)
In the 1980s, a
fall in oil prices and the start of the
Latin American debt crisis brought economic difficulties to Venezuela. Additionally, President
Luis Herrera Campins
Luis Antonio Herrera Campins (4 May 1925 – 9 November 2007) was the president of Venezuela from 1979 to 1984. He was elected to one five-year term in 1978. He was a member of COPEI, a Christian Democratic party.
Early life and career
Luis ...
' economic policies led to the devaluation of the
Venezuelan bolívar
The bolívar is the official currency of Venezuela. Named after the hero of Latin American independence Simón Bolívar, it was introduced following the monetary reform in 1879, before which the venezolano was circulating. Due to its decade- ...
against the
US dollar
The United States dollar ( symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the officia ...
in a day that would be known as ''
Viernes Negro
''Viernes Negro'' ( en, Black Friday) in Venezuela refers to Friday, 18 February 1983, when the Venezuelan bolívar was devalued substantially against the US dollar. This event caused a significant destabilization of the currency and the Venezuela ...
'' ( en, Black Friday).
The devaluation happened because of President. Following the oil price crisis, the Herrera Campins government declared bankruptcy to the international banking community and then enacted currency restrictions.
The policies centred on the establishment of an
exchange-rate regime
An exchange rate regime is a way a monetary authority of a country or currency union manages the currency about other currencies and the foreign exchange market. It is closely related to monetary policy and the two are generally dependent on many ...
, imposing a restriction on the movement of currencies, and were strongly objected to by the then-president of the
Central Bank of Venezuela
The Central Bank of Venezuela ( es, Banco Central de Venezuela, BCV) is the central bank of Venezuela. It maintains a fixed exchange rate for the Venezuelan bolívar and since 1996 is the governing agent of the Venezuelan Clearing House System ...
,
Leopoldo Díaz Bruzual Leopoldo is a given name, the Italian, Spanish, and Portuguese form of the English, German, Dutch, Polish, and Slovene name, Leopold.
Notable people with the name include:
*Leopoldo de' Medici (1617–1675), Italian cardinal and Governor of Sien ...
. The currency controls devalued Venezuelan
purchasing power
Purchasing power is the amount of goods and services that can be purchased with a unit of currency. For example, if one had taken one unit of currency to a store in the 1950s, it would have been possible to buy a greater number of items than would ...
by 75% in a matter of hours; banks did not open on Viernes Negro, and even the Central Bank did not have many reserves of foreign currencies, causing the government to devalue the bolívar by 100%.
Carlos Andrés Pérez based his campaign for the
1988 Venezuelan general election
General elections were held in Venezuela on 4 December 1988. Dieter Nohlen (2005) ''Elections in the Americas: A data handbook, Volume II'', p555 The presidential elections were won by Carlos Andrés Pérez of Democratic Action, who received 52 ...
in his legacy of abundance during his
first presidential period and initially rejected liberalization policies.
Venezuela's international reserves were only US$300 million at the time of Pérez' election into the presidency; Pérez decided to respond to the debt, public spending, economic restrictions and
rentier state
In current political-science and international-relations theory, a rentier state is a state which derives all or a substantial portion of its national revenues from the rent paid by foreign individuals, concerns or governments.Mahdavy 1970, p. ...
by liberalizing the economy
and proceeded to implement Washington consensus reforms.
He announced a
technocratic
Technocracy is a form of government in which the decision-maker or makers are selected based on their expertise in a given area of responsibility, particularly with regard to scientific or technical knowledge. This system explicitly contrasts wi ...
cabinet and a group of economic policies to fix macroeconomic imbalances known as ' ( en, The Great Turn), called by detractors as ''El Paquetazo Económico'' ( en, The Economic Package). Among the policies there was the reduction of fuel subsidies and the increase of public transportation fares by thirty percent (VEB 16
Venezuelan bolívar
The bolívar is the official currency of Venezuela. Named after the hero of Latin American independence Simón Bolívar, it was introduced following the monetary reform in 1879, before which the venezolano was circulating. Due to its decade- ...
es, or US$0.4).
[Margarita López Maya, 2003. "The Venezuelan Caracazo of 1989: Popular Protest and Institutional Weakness", ''Journal of Latin American Studies'', Vol.35, No.1 (2003), pp 120-121 (See #Further reading).] The increase was supposed to be implemented on 1 March 1989, but bus drivers decided to apply the price rise on 27 February, a day before payday in Venezuela. In response, protests and rioting began on the morning of 27 February 1989 in
Guarenas
Guarenas is a city in Miranda, Venezuela. It was established in 1621 as ''Nuestra Señora de Copacabana de los Guarenas''. It is part of the Guarenas-Guatire conurbation
On February 27, 1989, a morning protest in this city over the recent nati ...
, a town near Caracas;
[El Caracazo Case, Judgment of 11 November 1999](_blank)
, Inter-American Court of Human Rights, accessed 1 May 2007 a lack of timely intervention by authorities, as the was on a
labour strike
Strike action, also called labor strike, labour strike, or simply strike, is a work stoppage caused by the mass refusal of employees to work. A strike usually takes place in response to employee grievances. Strikes became common during the In ...
, led the protests and rioting quickly spread to the capital and other towns across the country.
![CANTV old logo](https://upload.wikimedia.org/wikipedia/commons/f/fa/CANTV_old_logo.svg)
By late 1991, as part of the economic reforms, Carlos Andrés Pérez' administration had sold three banks, a shipyard, two sugar mills, an airline, a telephone company and a cell phone band, receiving a total of US$2,287 million.
The most remarkable auction was
CANTV
CANTV () is the state-run telephone and internet service provider in Venezuela. It was one of the first telephone service enterprises in the country, founded in 1930. The largest telecommunications provider in Venezuela, it was privatized in 19 ...
's, a telecommunications company, which was sold at the price of US$1,885 million to the consortium composed of American
AT&T
AT&T Inc. is an American multinational telecommunications holding company headquartered at Whitacre Tower in Downtown Dallas, Texas. It is the world's largest telecommunications company by revenue and the third largest provider of mobile te ...
International, General Telephone Electronic and the Venezuelan
Electricidad de Caracas
Electricidad de Caracas ( BVCEDC is the integrated electricity company for Caracas, Venezuela and surrounding areas, with more than 1 million connections. It was acquired by AES Corporation in 2000 and sold to the state-owned oil company PDVSA ...
and
Banco Mercantil. The privatization ended Venezuela's monopoly over telecommunications and surpassed even the most optimistc predictions, with over US$1,000 million above the base price and US$500 million more than the bid offered by the competition group.
By the end of the year, inflation had dropped to 31%, Venezuela's international reserves were now worth US$14,000 million and there was an economic growth of 9% (called as an "Asian growth"), the largest in Latin America at the time.
The Caracazo and previous inequality in Venezuela were used to justify the subsequent
1992 Venezuelan coup d'état attempts
Year 199 ( CXCIX) was a common year starting on Monday (link will display the full calendar) of the Julian calendar. At the time, it was sometimes known as year 952 ''Ab urbe condita''. The denomination 199 for this year has been used since the ...
and led to the rise of
Hugo Chávez's
Revolutionary Bolivarian Movement-200,
who in 1982 had promised to depose the bipartisanship governments.
Once elected in 1998, Chávez began to revert the policies of his predecessors.
Criticism
As of the 2000s, several Latin American countries were led by socialist or other left wing governments, some of which—including Argentina and Venezuela—have campaigned for (and to some degree adopted) policies contrary to the Washington Consensus policies. Other Latin American countries with governments of the left, including Brazil, Chile and Peru, in practice adopted the bulk of the policies included in Williamson's list, even though they criticized the market fundamentalism that these are often associated with.
General criticism of the economics of the consensus is now more widely established, such as that outlined by US scholar
Dani Rodrik
Dani Rodrik (born August 14, 1957) is a Turkish economist and Ford Foundation Professor of International Political Economy at the John F. Kennedy School of Government at Harvard University. He was formerly the Albert O. Hirschman Professor of t ...
, Professor of International Political Economy at
Harvard University
Harvard University is a private Ivy League research university in Cambridge, Massachusetts. Founded in 1636 as Harvard College and named for its first benefactor, the Puritan clergyman John Harvard, it is the oldest institution of high ...
, in his paper ''Goodbye Washington Consensus, Hello Washington Confusion?''.
As Williamson has pointed out, the term has come to be used in a broader sense to its original intention, as a synonym for market fundamentalism or neo-liberalism. In this broader sense, Williamson states, it has been criticized by people such as
George Soros
George Soros ( name written in eastern order), (born György Schwartz, August 12, 1930) is a Hungarian-American businessman and philanthropist. , he had a net worth of US$8.6 billion, Note that this site is updated daily. having donated mo ...
and
Nobel Laureate
In English, the word laureate has come to signify eminence or association with literary awards or military glory. It is also used for recipients of the Nobel Prize, the Gandhi Peace Award, the Student Peace Prize, and for former music direc ...
Joseph E. Stiglitz
Joseph Eugene Stiglitz (; born February 9, 1943) is an American New Keynesian economist, a public policy analyst, and a full professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the ...
.
The Washington Consensus is also criticized by others such as some Latin American politicians and
heterodox economists such as
Erik Reinert
Erik Steenfeldt Reinert (born 15 February 1949) is a Norwegian economist, with development economics, economic history and history of economic policy as his specialties.
Biography
Reinert was born in Oslo, attended the University of St. Gallen ...
.
[Reinert, Erik S. (2000]
The Underdevelopment of Mongolia in the 1990s—Why Globalisation is one Nation's Food and the Other Nation's Poison
. The term has become associated with neoliberal policies in general and drawn into the broader debate over the expanding role of the
free market
In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any ot ...
, constraints upon the
state
State may refer to:
Arts, entertainment, and media Literature
* ''State Magazine'', a monthly magazine published by the U.S. Department of State
* ''The State'' (newspaper), a daily newspaper in Columbia, South Carolina, United States
* ''Our S ...
, and the influence of the United States, and globalization more broadly, on countries' national
sovereignty
Sovereignty is the defining authority within individual consciousness, social construct, or territory. Sovereignty entails hierarchy within the state, as well as external autonomy for states. In any state, sovereignty is assigned to the perso ...
.
Some US economists, such as
Joseph Stiglitz and
Dani Rodrik
Dani Rodrik (born August 14, 1957) is a Turkish economist and Ford Foundation Professor of International Political Economy at the John F. Kennedy School of Government at Harvard University. He was formerly the Albert O. Hirschman Professor of t ...
, have challenged what are sometimes described as the 'fundamentalist' policies of the IMF and the
US Treasury
The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing and ...
for what Stiglitz calls a 'one size fits all' treatment of individual economies. According to Stiglitz the treatment suggested by the IMF is too simple: one dose, and fast—stabilize, liberalize and privatize, without prioritizing or watching for side effects.
Besides the excessive belief in market fundamentalism and international economic institutions in attributing the failure of the Washington consensus, Stiglitz provided a further explanation about why it failed. In his article "The Post Washington Consensus Consensus",
he claims that the Washington consensus policies failed to efficiently handle the economic structures within developing countries. The cases of East Asian countries such as Korea and Taiwan are known as a success story in which their remarkable economic growth was attributed to a larger role of the government by undertaking
industrial policies and increasing domestic savings within their territory. From the cases, the role for government was proven to be critical at the beginning stage of the dynamic process of development, at least until the markets by themselves can produce efficient outcomes.
The critique laid out in the World Bank's study ''Economic Growth in the 1990s: Learning from a Decade of Reform'' (2005) shows how far discussion has come from the original ideas of the Washington Consensus. Gobind Nankani, a former vice-president for Africa at the World Bank, wrote in the preface: "there is no unique universal set of rules....
need to get away from formulae and the search for elusive 'best practices'...." (p. xiii). The World Bank's new emphasis is on the need for humility, for policy diversity, for selective and modest reforms, and for experimentation.
[World Bank, Economic Growth in the 1990s: Learning from a Decade of Reform, Washington, D.C., 2005]
The World Bank's report ''Learning from Reform'' shows some of the developments of the 1990s. There was a deep and prolonged collapse in output in some (though by no means all) countries making the transition from
communism
Communism (from Latin la, communis, lit=common, universal, label=none) is a far-left sociopolitical, philosophical, and economic ideology and current within the socialist movement whose goal is the establishment of a communist society, a ...
to market economies (many of the Central and East European countries, by contrast, made the adjustment relatively rapidly). Academic studies show that more than two decades into the transition, some of the former communist countries, especially parts of the former Soviet Union, had still not caught up to their levels of output before 1989. A 2001 study by economist
Steven Rosefielde
Steven R. Rosefielde (born 1942) is professor of comparative economic systems at the University of North Carolina at Chapel Hill. He is also a member of the Russian Academy of Natural Sciences.
''Red Holocaust''
In ''Red Holocaust'', Rosefield ...
posits that there were 3.4 million premature deaths in Russia from 1990 to 1998, which he party blames on the
shock therapy
Electroconvulsive therapy (ECT) is a psychiatric treatment where a generalized seizure (without muscular convulsions) is electrically induced to manage refractory mental disorders.Rudorfer, MV, Henry, ME, Sackeim, HA (2003)"Electroconvulsive the ...
imposed by the Washington Consensus. Neoliberal policies associated with the Washington Consensus, including pension privatization, the imposition of a flat tax, monetarism, cutting of corporate taxes, and central bank independence, continued into the 2000s. Many
Sub-Saharan African's economies failed to take off during the 1990s, in spite of efforts at policy reform, changes in the political and external environments, and continued heavy influx of foreign aid.
Uganda
}), is a landlocked country in East Africa. The country is bordered to the east by Kenya, to the north by South Sudan, to the west by the Democratic Republic of the Congo, to the south-west by Rwanda, and to the south by Tanzania. The sou ...
,
Tanzania
Tanzania (; ), officially the United Republic of Tanzania ( sw, Jamhuri ya Muungano wa Tanzania), is a country in East Africa within the African Great Lakes region. It borders Uganda to the north; Kenya to the northeast; Comoro Islands ...
, and
Mozambique
Mozambique (), officially the Republic of Mozambique ( pt, Moçambique or , ; ny, Mozambiki; sw, Msumbiji; ts, Muzambhiki), is a country located in southeastern Africa bordered by the Indian Ocean to the east, Tanzania to the north, Malawi ...
were among countries that showed some success, but they remained fragile. There were several successive and painful financial crises in Latin America, East Asia, Russia, and Turkey. The Latin American recovery in the first half of the 1990s was interrupted by crises later in the decade. There was less growth in per capita GDP in Latin America than in the period of rapid post-War expansion and opening in the world economy, 1950–80.
Argentina
Argentina (), officially the Argentine Republic ( es, link=no, República Argentina), is a country in the southern half of South America. Argentina covers an area of , making it the second-largest country in South America after Brazil, th ...
, described by some as "the poster boy of the Latin American economic revolution",
came crashing down in 2002.
A significant body of economists and policy-makers argues that what was wrong with the Washington Consensus as originally formulated by Williamson had less to do with what was ''included'' than with what was ''missing''. This view asserts that countries such as Brazil, Chile, Peru and Uruguay, largely governed by parties of the left in recent years, did not—whatever their rhetoric—in practice abandon most of the substantive elements of the Consensus. Countries that have achieved macroeconomic stability through fiscal and monetary discipline have been loath to abandon it: Lula, the former President of Brazil (and former leader of the
Workers' Party of Brazil), has stated explicitly that the defeat of
hyperinflation
In economics, hyperinflation is a very high and typically accelerating inflation. It quickly erodes the real value of the local currency, as the prices of all goods increase. This causes people to minimize their holdings in that currency as t ...
was among the most important positive contributions of the years of his presidency to the welfare of the country's poor, although the remaining influence of his policies on tackling poverty and maintaining a steady low rate of inflation are being discussed and doubted in the wake of the Brazilian Economic Crisis currently occurring in Brazil.
These economists and policy-makers would, however, overwhelmingly agree that the Washington Consensus was ''incomplete'', and that countries in Latin America and elsewhere need to move beyond "first generation" macroeconomic and trade reforms to a stronger focus on
productivity
Productivity is the efficiency of production of goods or services expressed by some measure. Measurements of productivity are often expressed as a ratio of an aggregate output to a single input or an aggregate input used in a production proces ...
-boosting reforms and direct programs to support the poor. This includes improving the investment climate and eliminating
red tape (especially for smaller firms), strengthening institutions (in areas like justice systems), fighting poverty directly via the types of
Conditional Cash Transfer programs adopted by countries like Mexico and Brazil, improving the quality of primary and secondary education, boosting countries' effectiveness at developing and absorbing technology, and addressing the special needs of historically disadvantaged groups including
indigenous peoples
Indigenous peoples are culturally distinct ethnic groups whose members are directly descended from the earliest known inhabitants of a particular geographic region and, to some extent, maintain the language and culture of those original people ...
and
Afro-descendant
The African diaspora is the worldwide collection of communities descended from native Africans or people from Africa, predominantly in the Americas. The term most commonly refers to the descendants of the West and Central Africans who were e ...
populations across Latin America.
In a book edited with future
president of Peru
The president of Peru ( es, link=no, presidente del Perú), officially called the president of the Republic of Peru ( es, link=no, presidente de la República del Perú), is the head of state and head of government of Peru. The president is th ...
,
Pedro Pablo Kuczynski
Pedro is a masculine given name. Pedro is the Spanish, Portuguese, and Galician name for ''Peter''. Its French equivalent is Pierre while its English and Germanic form is Peter.
The counterpart patronymic surname of the name Pedro, meaning " ...
in 2003, John Williamson laid out an expanded reform agenda, emphasizing crisis-proofing of economies, "second-generation" reforms, and policies addressing inequality and social issues.
Nobel laureate
Michael Spence has defended the Washington Consensus, arguing "I continue to find that when properly interpreted as a guide to the formulation of country-specific development strategies, the Washington Consensus has withstood the test of time quite well."
According to Spence, "The Washington Consensus was never intended as a complete or a one-size-fits-all development program."
He does however note that the Washington Consensus "was vulnerable to misuse due to the absence of an accompanying and explicit development model."
Anti-globalization movement
Many critics of
trade liberalization
Free trade is a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade. In government, free trade is predominantly advocated by political parties that hold econ ...
, such as
Noam Chomsky
Avram Noam Chomsky (born December 7, 1928) is an American public intellectual: a linguist, philosopher, cognitive scientist, historian, social critic, and political activist. Sometimes called "the father of modern linguistics", Chomsky i ...
,
Tariq Ali
Tariq Ali (; born 21 October 1943) is a Pakistani-British political activist, writer, journalist, historian, filmmaker, and public intellectual. He is a member of the editorial committee of the ''New Left Review'' and ''Sin Permiso'', and con ...
,
Susan George, and
Naomi Klein
Naomi A. Klein (born May 8, 1970) is a Canadian author, social activist, and filmmaker known for her political analyses, support of ecofeminism, organized labour, left-wing politics and criticism of corporate globalization, fascism, ecofascism ...
, see the Washington Consensus as a way to open the
labor market of underdeveloped economies to exploitation by companies from more developed economies. The prescribed reductions in tariffs and other
trade barrier
Trade barriers are government-induced restrictions on international trade. According to the theory of comparative advantage, trade barriers are detrimental to the world economy and decrease overall economic efficiency.
Most trade barriers work o ...
s allow the free movement of goods across borders according to
market forces
In economics, a market is a composition of systems, institutions, procedures, social relations or infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering ...
, but labor is not permitted to move freely due to the requirements of a
visa
Visa most commonly refers to:
*Visa Inc., a US multinational financial and payment cards company
** Visa Debit card issued by the above company
** Visa Electron, a debit card
** Visa Plus, an interbank network
*Travel visa, a document that allows ...
or a work permit. This creates an economic climate where goods are manufactured using cheap labor in underdeveloped economies and then exported to rich First World economies for sale at what the critics argue are huge markups, with the balance of the markup said to accrue to large multinational corporations. The criticism is that workers in the
Third World
The term "Third World" arose during the Cold War to define countries that remained non-aligned with either NATO or the Warsaw Pact. The United States, Canada, Japan, South Korea, Western European nations and their allies represented the " First ...
economy nevertheless remain poor, as any pay raises they may have received over what they made before trade liberalization are said to be offset by inflation, whereas workers in the First World country become unemployed, while the wealthy owners of the multinational grow even more wealthy.
Despite macroeconomic advances, poverty and inequality remain at high levels in Latin America. About one of every three people—165 million in total—still live on less than $2 a day. Roughly a third of the population has no access to electricity or basic sanitation, and an estimated 10 million children suffer from malnutrition. These problems are not, however, new: Latin America was the most economically unequal region in the world in 1950, and has continued to be so ever since, during periods both of state-directed import-substitution and (subsequently) of market-oriented liberalization.
Some socialist political leaders in Latin America have been vocal and well-known critics of the Washington Consensus, such as the late Venezuelan President
Hugo Chávez, Cuban ex-President
Fidel Castro, Bolivian President
Evo Morales
Juan Evo Morales Ayma (; born 26 October 1959) is a Bolivian politician, trade union organizer, and former cocalero activist who served as the 65th president of Bolivia from 2006 to 2019. Widely regarded as the country's first president to c ...
, and
Rafael Correa
Rafael Vicente Correa Delgado (; born 6 April 1963), known as Rafael Correa, is an Ecuadorian politician and economist who served as President of Ecuador from 2007 to 2017. The leader of the PAIS Alliance political movement from its foundation ...
, President of
Ecuador
Ecuador ( ; ; Quechua: ''Ikwayur''; Shuar: ''Ecuador'' or ''Ekuatur''), officially the Republic of Ecuador ( es, República del Ecuador, which literally translates as "Republic of the Equator"; Quechua: ''Ikwadur Ripuwlika''; Shuar: ' ...
. In Argentina, too, the recent
Justicialist Party government of
Néstor Kirchner
Néstor Carlos Kirchner (; 25 February 195027 October 2010) was an Argentine lawyer and politician who served as the President of Argentina from 2003 to 2007, Governor of Santa Cruz Province from 1991 to 2003, Secretary General of UNASUR and ...
and
Cristina Fernández de Kirchner
Cristina Elisabet Fernández de Kirchner (; born 19 February 1953), often referred to by her initials CFK, is an Argentine lawyer and politician who has served as the Vice President of Argentina since 2019. She also served as the President o ...
undertook policy measures which represented a repudiation of at least some Consensus policies.
Proponents of the "European model" and the "Asian way"
Some European and Asian economists suggest that "infrastructure-savvy economies" such as
Norway
Norway, officially the Kingdom of Norway, is a Nordic country in Northern Europe, the mainland territory of which comprises the western and northernmost portion of the Scandinavian Peninsula. The remote Arctic island of Jan Mayen and the ...
, Singapore, and China have partially rejected the underlying Neoclassical "financial orthodoxy" that characterizes the Washington Consensus, instead initiating a
pragmatist development path of their own based on sustained, large-scale, government-funded investments in strategic infrastructure projects: "Successful countries such as Singapore,
Indonesia
Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Guine ...
, and
South Korea
South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korean Peninsula and sharing a land border with North Korea. Its western border is formed by the Yellow Sea, while its eas ...
still remember the harsh adjustment mechanisms imposed abruptly upon them by the IMF and World Bank during the
1997–1998 'Asian Crisis' What they have achieved in the past 10 years is all the more remarkable: they have quietly abandoned the Washington Consensus by investing massively in infrastructure projects
this pragmatic approach proved to be very successful".
While opinion varies among economists, Rodrik pointed out what he claimed was a factual paradox: while China and India increased their economies' reliance on free market forces to a limited extent, their general economic policies remained the exact opposite to the Washington Consensus' main recommendations. Both had high levels of
protectionism
Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulatio ...
, no
privatization
Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...
, extensive industrial policies planning, and lax fiscal and financial policies through the 1990s. Had they been dismal failures they would have presented strong evidence in support of the recommended Washington Consensus policies. However they turned out to be successes.
According to Rodrik: "While the lessons drawn by proponents and skeptics differ, it is fair to say that nobody really believes in the Washington Consensus anymore. The question now is not whether the Washington Consensus is dead or alive; it is what will replace it".
Rodrik's account of Chinese or Indian policies during the period is not universally accepted. Among other things those policies involved major turns in the direction of greater reliance upon market forces, both domestically and internationally.
Subsidies for agriculture
The Washington Consensus as formulated by Williamson includes provision for the redirection of
public spending
Government spending or expenditure includes all government consumption, investment, and transfer payments. In national income accounting, the acquisition by governments of goods and services for current use, to directly satisfy the individual o ...
from subsidies ("especially indiscriminate subsidies") toward broad-based provision of key pro-growth, pro-poor services like primary education,
primary health care
Primary health care, or PHC, refers to "essential health care" that is based on scientifically sound and socially acceptable methods and technology. This makes universal health care accessible to all individuals and families in a community. PHC in ...
and infrastructure investment. This definition leaves some room for debate over specific public spending programs. One area of public controversy has focused on the issues of subsidies to farmers for fertilizers and other modern farm inputs: on the one hand, these can be criticized as subsidies, on the other, it may be argued that they generate positive externalities that might justify the subsidy involved.
Some critics of the Washington Consensus cite Malawi's experience with
agricultural subsidies
An agricultural subsidy (also called an agricultural incentive) is a government incentive paid to agribusinesses, agricultural organizations and farms to supplement their income, manage the supply of agricultural commodities, and influence the ...
, for example, as exemplifying perceived flaws in the package's prescriptions. For decades, the World Bank and donor nations pressed
Malawi
Malawi (; or aláwi Tumbuka: ''Malaŵi''), officially the Republic of Malawi, is a landlocked country in Southeastern Africa that was formerly known as Nyasaland. It is bordered by Zambia to the west, Tanzania to the north and northeas ...
, a predominantly rural country in Africa, to cut back or eliminate government fertilizer subsidies to farmers. World Bank experts also urged the country to have Malawi farmers shift to growing cash crops for export and to use foreign exchange earnings to import food.
[New York Times, 2007 December 2,]
Ending Famine, Simply by Ignoring the Experts
" For years, Malawi hovered on the brink of famine; after a particularly disastrous corn harvest in 2005, almost five million of its 13 million people needed emergency food aid. Malawi's newly elected president
Bingu wa Mutharika
Bingu wa Mutharika (; born Brightson Webster Ryson Thom; 24 February 1934 – 5 April 2012) was a Malawian politician and economist who was President of Malawi from May 2004 until his death in April 2012. He was also President of the Demo ...
then decided to reverse policy. Introduction of deep fertilizer subsidies (and lesser ones for seed), abetted by good rains, helped farmers produce record-breaking corn harvests in 2006 and 2007; according to government reports, corn production leapt from 1.2 million metric tons in 2005 to 2.7 million in 2006 and 3.4 million in 2007. The prevalence of acute child hunger has fallen sharply and Malawi recently turned away emergency food aid.
In a commentary on the Malawi experience prepared for the
Center for Global Development
The Center for Global Development (CGD) is a nonprofit think tank based in Washington, D.C., and London that focuses on international development.
History
It was founded in November 2001 by former senior U.S. official Edward W. Scott, direc ...
,
development economists
Development economics is a branch of economics which deals with economic aspects of the development process in low- and middle- income countries. Its focus is not only on methods of promoting economic development, economic growth and structural ...
Vijaya Ramachandran and Peter Timmer argue that fertilizer subsidies in parts of Africa (and Indonesia) can have benefits that substantially exceed their costs. They caution, however, that how the subsidy is operated is crucial to its long-term success, and warn against allowing fertilizer distribution to become a monopoly. Ramachandran and Timmer also stress that African farmers need more than just input subsidies—they need better research to develop new inputs and new seeds, as well as better transport and energy infrastructure. The World Bank reportedly now sometimes supports the temporary use of fertilizer subsidies aimed at the poor and carried out in a way that fosters private markets: "In Malawi, Bank officials say they generally support Malawi's policy, though they criticize the government for not having a strategy to eventually end the subsidies, question whether its 2007 corn production estimates are inflated and say there is still a lot of room for improvement in how the subsidy is carried out".
Alternative usage vis-à-vis foreign policy
In early 2008, the term "Washington Consensus" was used in a different sense as a metric for analyzing American
mainstream media coverage of U.S.
foreign policy generally and Middle East policy specifically. Marda Dunsky writes, "Time and again, with exceedingly rare exceptions, the media repeat without question, and fail to challenge the "Washington consensus"—the official mind-set of US governments on Middle East peacemaking over time." According to syndicated columnist
William Pfaff
William Pfaff (December 29, 1928 – April 30, 2015) was an American author, op-ed columnist for the ''International Herald Tribune'' and frequent contributor to ''The New York Review of Books''.
Early life
Pfaff was born in Council Bluffs, Iowa ...
, Beltway centrism in American mainstream media coverage of foreign affairs is the rule rather than the exception: "Coverage of international affairs in the US is almost entirely Washington-driven. That is, the questions asked about foreign affairs are Washington's questions, framed in terms of domestic politics and established policy positions. This invites uninformative answers and discourages unwanted or unpleasant views."
[Vicki O'Hara, Reaction to the Greater Middle East Initiative, which encourages democracy in Arab countries, ]NPR
National Public Radio (NPR, stylized in all lowercase) is an American privately and state funded nonprofit media organization headquartered in Washington, D.C., with its NPR West headquarters in Culver City, California. It differs from other ...
/Morning Edition
''Morning Edition'' is an American radio news program produced and distributed by NPR. It airs weekday mornings (Monday through Friday) and runs for two hours, and many stations repeat one or both hours. The show feeds live from 5:00 to 9:00 A ...
, March 23, 2004
See also
*
American imperialism
American imperialism refers to the expansion of American political, economic, cultural, and media influence beyond the boundaries of the United States. Depending on the commentator, it may include imperialism through outright military conques ...
*
Beijing Consensus
The Beijing Consensus ( zh, 北京共识) or China Model ( zh, 中国模式), also known as the Chinese Economic Model, is the political and economic policies of the People's Republic of China (PRC)Zhang Weiwei,"The allure of the Chinese model", ...
*
Bretton Woods system
*
Central America Free Trade Agreement (CAFTA)
*
Democratic capitalism
*
Economic growth
* ''
The End of History and the Last Man
''The End of History and the Last Man'' is a 1992 book of political philosophy by American political scientist Francis Fukuyama which argues that with the ascendancy of Western liberal democracy—which occurred after the Cold War (1945–1991) ...
''
*
Andre Gunder Frank
Andre Gunder Frank (February 24, 1929 – April 25, 2005) was a German-American sociologist and economic historian who promoted dependency theory after 1970 and world-systems theory after 1984. He employed some Marxian concepts on politi ...
*
Gross domestic product
Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is oft ...
*
Hyperinflation
In economics, hyperinflation is a very high and typically accelerating inflation. It quickly erodes the real value of the local currency, as the prices of all goods increase. This causes people to minimize their holdings in that currency as t ...
*
Immanuel Wallerstein
Immanuel Maurice Wallerstein (; September 28, 1930 – August 31, 2019) was an American sociologist and economic historian. He is perhaps best known for his development of the general approach in sociology which led to the emergence of his wor ...
*
Lima Consensus
*
Macroeconomics
*
Mumbai Consensus
The Mumbai Consensus is a term used to refer to India's particular model of economic development, with a "people-centric" approach to managing its economy which may be taken up by other developing nations in time. Indian model of economic growth, ...
*
North American Free Trade Agreement (NAFTA)
*
Poverty Reduction Strategy Paper Poverty Reduction Strategy Papers (PRSPs) are documents required by the International Monetary Fund (IMF) and World Bank before a country can be considered for debt relief within the Heavily Indebted Poor Countries (HIPC) initiative. PRSPs are als ...
*
Structural adjustment
*
World Systems Theory
Notes
References
Sources
Primary sources
* ''Accelerated Development in Sub-Saharan Africa: An Agenda for Action'', Eliot Berg, coord., (World Bank, 1981).
* ''The Spirit of Democratic Capitalism'', by Michael Novak (1982).
* ''El Otro Sendero (The Other Path)'', by Hernando de Soto (1986).
* ''Toward Renewed Economic Growth in Latin America'', by Bela Balassa, Gerardo M. Bueno, Pedro-Pablo Kuczynski, and Mario Henrique (Institute for International Economics, 1986).
* ''Latin American Adjustment: How Much Has Happened'', edited by John Williamson (Institute for International Economics, 1990).
* ''The Macroeconomics of Populism in Latin America'', edited by Rudiger Dornbusch and Sebastian Edwards (1991).
* ''Global Linkages: Macroeconomic Interdependence and Cooperation in the World Economy'', by
Jeffrey Sachs
Jeffrey David Sachs () (born 5 November 1954) is an American economist, academic, public policy analyst, and former director of The Earth Institute at Columbia University, where he holds the title of University Professor. He is known for his work ...
and
Warwick McKibbin
Warwick James McKibbin (born 21 April 1957 in Sydney) is an Australian Professor of Economics at the Australian National University who works across a wide range of areas in applied policy. He has published more than 200 scholarly articles and ...
(1991).
* ''World Development Report 1991: The Challenge of Development'', by Lawrence Summers, Vinod Thomas, et al. (World Bank, 1991).
* "Development and the "Washington Consensus"", in ''World Development'' Vol 21:1329–1336 by John Williamson (1993).
* "Recent Lessons of Development", Lawrence H. Summers & Vinod Thomas (1993).
* ''Latin America's Journey to the Market: From Macroeconomic Shocks to Institutional Therapy'', by Moises Naím (1994).
* ''Economistas y Politicos: La Política de la Reforma Económica'', by Agustín Fallas-Santana (1996).
* ''The Crisis of Global Capitalism: Open Society Endangered'', by George Soros (1997).
* ''Beyond Tradeoffs: Market Reform and Equitable Growth in Latin America'', edited by Nancy Birdsall, Carol Graham, and Richard Sabot (Brookings Institution, 1998).
* ''The Third Way: Toward a Renewal of Social Democracy'', by Anthony Giddens (1998).
* ''The Lexus and the Olive Tree: Understanding Globalization'', by Thomas Friedman (1999).
"Fads and Fashion in Economic Reforms: Washington Consensus or Washington Confusion?" by Moisés Naím (IMF, 1999).
* ''Washington Contentious: Economic Policies for Social Equity in Latin America'', by Nancy Birdsall and Augusto de la Torre (Carnegie Endowment for International Peace and Inter-American Dialogue, 2001)
"Did the Washington Consensus Fail?" by John Williamson (Speech at PIIE, 2002).
*
**
* Implementing Economic Reforms in Mexico: The Washington Consensus as a Roadmap for Developing Countries by Terrence Fluharty (2007
Implementing Economic Reforms in Mexico: The Washington Consensus as a Roadmap for Developing Countries
Secondary sources
* Ip, Greg. (2021) "How Bidenomics Seeks to Remake the Economic Consensus: Declaring end to neoliberalism, new thinkers play down constraints of deficits, inflation and incentives
''Wall Street Journal'' April 7, 2021* Risen, Clay. (2021) "John Williamson, 83, Dies; Economist Defined the ‘Washington Consensus': A careful pragmatist, he regretted the way his term, aimed at developing countries, was misinterpreted by free-market ideologues and anti-globalization activists.
* Babb, Sarah, and Alexander Kentikelenis. (2021) "People have long predicted the collapse of the Washington Consensus. It keeps reappearing under new guises: 30 years later, global financial institutions still condition loans on policies like 'structural reforms’
''Washington Post'' April 16, 2021
* Kläffling, David. (2021) "Quick & New: Washington consensus 2.0? The Washington consensus has for long time been the symbol of market liberalism. Now, there may be a 'new Washington consensus', writes Martin Sandbu from the Financial Times based on what the International Monetary Fund and the World Bank argue in recent publications around their traditional spring meetings.
''New Paradigm '' (April 12, 2021)*
*
*
''Stability with Growth: Macroeconomics, Liberalization, and Development (Initiative for Policy Dialogue Series C) ; ''by Joseph E. Stiglitz, Jose Antonio Ocampo, Shari Spiegel, Ricardo Ffrench-Davis, and Deepak Nayyar; Oxford University Press 2006'']
* ''Economic Crisis and Policy Choice: The Politics of Adjustment in the Third World'', edited by Joan M. Nelson (1990).
* ''Crisis and Reform in Latin America: From Despair to Hope'', by Sebastian Edwards (1995).
* ''Fault Lines of Democracy in Post-Transition Latin America'', Felipe Agüero and Jeffrey Stark (1998).
* ''What Kind of Democracy? What Kind of Market? Latin America in the Age of Neoliberalism'', by Philip D. Oxhorn and Graciela Ducatenzeiler (1998).
* ''Latin America Transformed: Globalization and Modernity'', by Robert N. Gwynne and Cristóbal Kay (1999).
* ''The Internationalization of Palace Wars: Lawyers, Economists, and the Contest to Transform Latin American States'', by Yves Dezalay and Bryant G. Garth (2002).
* FONDAD: ''Diversity in Development: Reconsidering the Washington Consensus'', edited by Jan Joost Teunissen and Age Akkerman (2004).
The Washington Consensus as Policy Prescription for Development(World Bank)
What Should the World Bank Think about the Washington Consensus? by John Williamson.
by Adam Lent.
*
ttp://multinationalmonitor.org/mm2000/00april/interview.html Unraveling the Washington Consensus, An Interview with Joseph Stiglitz* Developing Brazil: overcoming the failure of the Washington consensus/
Luiz Carlos Bresser-Pereira
Luiz Carlos Bresser-Pereira (born 30 June 1934) is a Brazilian economist and social scientist. He teaches at the Getulio Vargas Foundation, in São Paulo. Since 1981, he has edited the ''Brazilian Journal of Political Economy''.
Bresser-Pereir ...
/ Lynne Rienner Publishers,2009
Bibliography
*
*
External links
*
*
Beyond the Washington Consensus by Jeremy Clift{{Portalbar, Business and economics, Political science, United States, Argentina
International macroeconomics
Latin America
Commercial policy
Economic globalization
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1989 neologisms
Neoliberalism
Neocolonialism