The ten commandments of the washington consensus 1. The term was first used in 1989 by english economist john williamson. First of all, this argument can be justified by referring to the global economic and financial crisis of 20082011. Pros clear chain of responsibility people are used to it cons. Consensus decisionmaking pros and cons consider these significant issues before you make consensus decisions. This approach is often referred to as the beijing consensus bc as compared to the washington consensus wc.
Section 6 presents a typology views on what went wrong with the washington consensus and section 7 concludes. The washington consensus special problems of developing countries pros and cons of tariffsused by developing countries the infant industry argument primaryproduct specialization growth and exports import substitution pros and cons of subsidiesused by developed countries policy recommendations econ 340, deardorff. Pdf the term washington consensus, as williamson conceived it, was the lowest common. What are the pros and cons of ripples consensus as. The washington consensus as policy prescription for. Washington driven and washington dominated consensus, but a vibrant new debate, a debate that must involve the supposed beneficiaries of development workers, farmers, the urban poor, indigenous communities in determining the goals and policies of new paths to development. This was in the context of a region where almost all the countries had run large deficits that led to balance of payments crises and high inflation that hit mainly the poor because the rich could park their money abroad. The chapters in this book can be viewed as revisiting the washington con. May 15, 2016 nevertheless, the ideology of washington consensus can be forecasted to be on its way to become a history. This paper argues that there is a substantial body of economic advice, roughly summarized in the washington consensus, that deserves to be endorsed across the political spectrum.
That neoliberal model, dubbed by john williamson as the washington consensus, turned out to be more harmful than helpful to the countries that received loans from the. The rise and fall of the washington consensus by charles gore. Team pros and cons benefits attack bigger problems in a short period of time utilize the collective experience of everyone risks. Yet, the way these countries interpreted such ideas varied substantially, and how they chose to implement them did even more so. Focuses on large infrastructure projects prone to corruption, indebtedness and environmental degradation. The evolution of the antiwashington consensus debate. Washington consensus harvards growth lab harvard university. Nevertheless there are grounds for believing that the impact of the washington consensus on the region has been less positivesum than might be. This page analyzes the policies known as the washington consensus. It was right wing policy advice to correct failures of prior approaches to development. Apr 11, 2016 the washington consensus is a set of ten points outlined by john williamson summarising policy advice from washingtonbased institutions to latin america after the 1980s debt crisis. Probably the difference arises because the 1991 wdr was indeed aiming to present a full development strategy, while the washington consensus is a list of what williamson thought. A short history of the washington consensus 14 john williamson 3. This means that developing countries should take steps to reduce fiscal deficit.
The rise and fall of the washington consensus as a paradigm. Consensus is a timeconsuming process, the stronger the difference, the greater the delay. Washington consensus, a set of economic policy recommendations for developing countries, and latin america in particular, that became popular during the 1980s. The washington consensus refers to a set of broadly free market. How can we better understand the ideology of washington. The rise and fall of the washington consensus as a. But of course one of the problems with trade liberalization in the 1990s. The present term paper is an attempt to explore and put forth the theoretical exposition of the two major development paradigms the marketoriented and the statecummarket centric development models, plausibly portrayed in terms of what is often phrased as the washington consensus and the postwashington consensus. A british economist named john williamson coined the term washington consensus in 1989.
The washington consensus reform resulted in economic collapse and. Some pros and cons of globalization cultural detective. World bankfor redirecting public expenditure in a propoor and progrowth way. The term washington consensus, as williamson the father of the term. Washington consensus the term washington consensus was coined by john williamson 1990 to encapsulate the set of policy reforms advocated with a reasonable degree of consensus by international. Requires highlevel skills, rapid skill improvement, and flexibility, thus it encourages education. The author is indebted to colleagues at the institute for international economics for comments on a previous draft. Consensus is a kind of compromise, and in a compromise, no section is fully satisfied. The washington consensus is structured on neoliberal economic policies, in particular, the reduction of. Ripple was designed by people who had the benefit of seeing exactly what bitcoin was doing and its strengths and weaknesses.
The washington consensus is a set of ten economic policy prescriptions considered to constitute the standard reform package promoted for crisiswracked developing countries by washington, d. What are the pros and cons of ripples consensus as compared. Africa and the washington consensus finding the right path. Dec 22, 2017 washington consensus definition and criticism 22 december 2017 25 april 2017 by tejvan pettinger the washington consensus refers to a set of broadly free market economic ideas, supported by prominent economists and international organisations, such as the imf, the world bank, the eu and the us. Liberalize as much as you can, privatize as fast as you can, and be tough in monetary and fiscal matters.
Of course, development was the main objective of the. The term washington consensus usually refers to the level of agreement between the international monetary fund imf, world bank, and u. Splitters 14 collapse original number of 1st cycle codes into smaller numbers reanalyze data find larger segments of text are better suited to just one key code rather than several smaller ones. The introduction of the washington consensus involved not simply a swing from stateled to. The ideas derived from the washington consensus had a huge influence on the economic reforms of many countries. Section 4 describes the extent of implementation of consensus style reforms during the 1990s and section 5 analyzes their economic outcomes.
Goodbye washington consensus, hello washington confusion. The washington consensus was important for determining policy towards economic development in latin america, south east asia and other countries. Democracy and the washington consensus john williamson institute for international economics, washington, dc summary. Oct 22, 2018 the washington consensus is a set of 10 economic policy prescriptions considered to constitute the standard reform package promoted for crisiswracked developing countries by washington, d. In particular, there are difficulties with the emphasis on privatisation and fiscal reform and trade liberalisation. The phrase beijing consensus was coined by joshua cooper ramo to frame chinas economic development model as an alternativeespecially for developing countriesto the washington consensus of marketfriendly policies promoted by the imf, world bank, and u. This report examines the precise nature of the required institutional reforms needed to achieve higher sustained rates of growth and to make a dent in poverty reduction and provides a framework for their design and implementation.
Jul 19, 2017 the beijing consensus could become an alternative to angloamerican neoliberalism, presented by some in the west as a onesizefitall model for all developing countries. The problems of the eu are related to difficulties of managing a single currency. The crisis of 2008 and 2009 accelerated the process of reflection on the. Conversely, price liberalization should be added as a policy. People have different views of the pros and cons of the wtos multilateral trading system.
When i hear people complain that their leaders are bordering on solicitous behaviors, being too concerned about including everyone in every decision, it makes me wonder. The washington consensus as i originally formulated it was not written as a policy prescription for development. Support of free trade through wto and nafta reduce tariff barriers. Consensus allows for a group approach with multiple experts sharing ideas to form consensus on topics ranging from appropriateness of procedures to research agenda development. The big advantage on the bitcoin side is that its technology is now wellproven.
The ten commandments of the washington consensus balance of. The new partnership for africas development nepad initiative is an attempt to overcome some of. Williamsons efforts at clarifying the meaning and implication of the washington consensus were not enough to compensate for the distortions resulting from the terms global popularity and its frequent misuse. Kolodko 1998 the bashing of the state that characterized the policy thrust of the washington. From the washington consensus towards a new global governance 3 narcis serra, shari spiegel, and joseph e. The washington consensus as policy prescription for development john williamson senior fellow, institute for international economics a lecture in the series practitioners of development delivered at the world bank on january, 2004.
The socalled washington consensus, which dictated most of the solutions proposed by international financial organizations, began to be questioned when a large number of emerging economies reduced their reliance on multilateral debt. The washington consensus had the following message. Avoidance of large fiscal deficits the washington consensus versus the beijing consensus 7. The washington consensus, sometimes synonymously used as the set of neoliberal economic policies or a universal policy package was originally designed by the key bretton woods institutions like world bank. Economic and intellectual antecedents to the consensus. Redirection of public spending the washington consensus. General criticisms the washington consensus john williamsons 10 guidelines 6.
This paper argues that there is a substantial body of economic advice, roughly summarized in the washington consensus, that deserves to. Dangers of consensus decisionmaking jurassic parliament. May 21, 2020 the washington consensus refers to a set of freemarket economic policies supported by prominent financial institutions such as the international monetary fund, the world bank, and the u. The washington consensus versus the beijing consensus. The debate on economic policy has developed significantly in the past decade. Aug 08, 2017 the washington consensus are set of rules which try to thrive globalization, liberalization and privatization by urging the states to abide by rules which endeavor to integrate the world economy.
Manias, panics, and crashes brad delongs grasping reality. Macroeconomic policy, propoor policies, inclusive growth, world bank, washington. Washington consensus politics in latin american context. Indeed, one of the most important reasons for having the system is to serve as a forum for countries to thrash out their differences on trade issues. Evolution of post cold war global economy washington consensus globalization different definitions pros and cons of globalization need for a globalization 3. Washington consensus definition and criticism economics help. The 2002 monterrey consensus, the 2002 johannesburg world summit on sustainable development, and the creation of the new partnership for africas development nepad a year earlier are deliberate attempts to change the donorrecipient relationship from aid as welfare to aid through partnerships.
What should the world bank think about the washington. The washington consensus as i originally formulated it was not written as a policy. Washington consensus what is international relations. Indeed, one of the most important reasons for having the system is to serve as a forum for countries to. Washingtondriven and washingtondominated consensus, but a vibrant new debate, a debate that must involve the supposed beneficiaries of development workers, farmers, the urban poor, indigenous communities in determining the goals and policies of new paths to development. This article analyzes the birth, evolution, implications, and controversy surrounding williamsons decalogue from a latin american standpoint. The 1991 wdr was started when i was chief economist, but the bulk of the work was done during larrys period in of. Here is a description of informal consensus from andy robinsons book, great boards for small groups. The consensus decision is to cut manufacturing costs and not do employee layoffs, but the result is a shoddy product that eventually causes the company to lose market share. Requires macroeconommic austerity, privatization, and a laissezfaire approach to economicsthe washington. The developing world needs more globalization, but reforms must be adapted to the political and economic context of each country in order to minimize the costs and to eliminate the roots of the political backlash. In determining which method to use, it is important to understand the pros and cons of the different approaches and how it will affect the overall input, approach. However, the fact that the post washington consensus builds on market reform and includes various other elements ignored by the washington consensus like institutional reform and good governance which are elements that extend the goals of the new consensus and enable it to promote sustainable, egalitarian, and democratic development.