During that time, he was the project director for the united nations highlevel panel on financing for development in 2001. The washington consensus is a collective policy decision on how to allow for developing countries to enter into the global economic market. The original formulation of the washington consensus, propounded in 1990 by john williamson, was largely concerned with macroeconomics and. Democracy and the washington consensus visionary values.
Finding the right path, finance and development, september. The washington consensus did not necessarily reject the use of social policy, but its focus on efficiency and fiscal discipline often led to cuts in social spending. The author is indebted to colleagues at the institute for international economics for comments on a previous. Democracy and the washington consensus sciencedirect. In this article the author distinguishes between his original meaning as a. A critique of the washington consensus in the age of globalization benjamin g. The ideology of the washington consensus economics essay. The term, washington consensus, has been used as a synonym for what is often referred to as neoliberalism by those who have criticized the program. By john williamson, senior fellow institute for international economics paper prepared as a background to the world banks world development report 2000 july 1999 the author is indebted to the participants in a prem week session where an early version of the. This paper argues that there is a substantial body of economic advice, roughly summarized in the washington consensus, that deserves to. It is hard to overemphasize the practical and ideological importance of the washington consensus in latin america. For an updated, modified revision, see williamson 20045, pp.
The washington consensus, initially developed in 1989, as explained by his author john williamson was not meant to become a policy viewed as a universal growth and development prescription but it was his way of listing ten policies that were held in the city of washington aimed to set off the economic growth in the area of latin america. The acceptance of this framework by international organizations and by the governments of the world, were nearly unanimous. The term washington consensus was originally used to describe a list often reforms that i argued were practically universally agreed in washing. A short history of the washington consensus 14 john williamson 3. A short history of the washington consensus john williamson senior fellow, institute for international economics paper commissioned by fundacion cidob for a conference from the washington consensus towards a new global governance, barcelona, september 2425, 2004. Economic fluctuations and growth program, international finance and macroeconomics program, international trade and investment program. What should the world bank think about the washington consensus. The decalogue of consensus policies laid out by john williamson.
Creditor countnes, specifically the g7, dominate the imf. The phrase washington consensus has become a familiar term in development policy circles in recent years, but it is now used in several different senses, causing a great deal of confusion. He served as a senior fellow at the peterson institute for international economics from 1981 until his retirement in 2012. The rise and fall of the washington consensus as a paradigm. Thus, we find the more reformed and democratic countries in central europe, such as poland, hungary, the czech republic, slovakia, and slovenia, with somewhat smaller underground economies and greater macroeconomic stability. We do not take the view that the liberalization reforms of the past decade and a half, or globalization, can be held responsible for the regions renewed travails in recent years. The ten commandments of the washington consensus 1. From postwashington consensus to after the washington consensus john marangos department of economics, colorado state university, 1771 campus delivery, fort collins, co 05231771, usa the term washington consensus, as williamson the father of the term conceived it. The paper is intended to elicit comment on both the extent to which. The new economic policy, known as washington consensus. The paradox of neoliberalism a critique of the washington consensus in the age of globalization benjamin griffith april 28th, 2006 connecticut college, honors thesis. Washington consensus, washington contentious, and augmented washington. The evolution of the antiwashington consensus debate.
The washington consensus as policy prescription for. British economist john williamson, who coined the term washington consensus, and peruvian finance minister pedropablo kuczynski recently wrote. The new economic policy, known as washington consensus, consisted of a package of 10 structural change aiming to achieve full liberalization of global markets from any regulations which existed until then. Washington consensus may be summarized as follows williamson 1990 1. A short history of the washington consensus by john williamson. The rise and fall of the washington consensus as a. Differing interpretations of the washington consens us. Senior fellow, institute for international economics. The record here is howlearning from reform summarizes the surprises of the 1990s. Williamsons 1994 version is reproduced in appendix 1. The paradigmatic nature of the washington consensus is most clearly evident in the work of john williamson, 1990, williamson, 1993, williamson, 1997, who coined the name and also set out a specific formulation of the approach at the end of the 1980s. Institute for international economics, washington, dc. Unlike previous understandings of the consensus as either purely an intellectual framework or as a simple list of policies, babb defines it as a contested and evolving transnational policy paradigm. Dec 22, 2017 essentially, the washington consensus advocates, free trade, floating exchange rates, free markets and macroeconomic stability.
Washington consensus, a set of economic policy recommendations for developing countries, and latin america in particular, that became popular during the 1980s. Institute for international economics, washington, dc 1990. The term was first used in 1989 by english economist john williamson. Outline of remarks at the session democracy and reform in latin america. What should the world bank think about the washington. Consensus should be defined as the policies pursued by china williamson 2012a. He was referring to a set of policy expectations about latin american economic decisions that were shared by leaders in the united states government and the international financial institutions. First, there was an unexpectedly deep and prolonged collapse in output in countries mak. The term washington consensus was originally used to describe a list often reforms that i argued were practically universally agreed in washington to be desirable in most latin american countries as of 1989.
From the after to the amended washington consensus. For these reasons both neoliberalism and the washington consensus are virtually dated in the beginning of the 21st century and the search began for their successors. Latin american political economy in the age of neoliberal reform and democracy. John williamson is senior fellow at the peterson institute for international. The decalogue of consensus policies laid out by john williamson in his 1989 landmark paper became in the minds of advocates and pundits alike a. Professor john williamson, who he still holds his british citizenship, has been involved since the beginning 1981, with the institute for international economics located in washington d. Essentially, the washington consensus advocates, free trade, floating exchange rates, free markets and macroeconomic stability. A misunderstood and poorly implemented development strategy july 17, 2005 july 20, 2006 coha the roots of the recent political upheaval in bolivia, where months of crippling protests and roadblocks prompted the ousting of president carlos mesa on june 6, were in large part economic. Marchapril 2011 47 programs in favor of strategies that emphasized economic e. Much of what one sees from this table fits the conventional wisdom of the washington consensus. 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 ten principles originally stated by john williamson in 1989, includes ten sets of relatively specific policy recommendations. This volume brings together many of the leading international figures in development studies, such as 2008 nobel prize in economics winner paul krugman, jose antonio ocampo, dani rodrik, joseph stiglitz, daniel cohen, olivier blanchard, deepak nayyer and john williamson to reconsider and propose alternative development policies to the washington consensus. Speeches and papers what washington means by policy reform by john williamson, peterson institute for international economics. As phillip arestis writes in his article washington onsensus and financial liberalization, the washington onsensus is actually composed of ten specific measures to ensure economic stability and growth. John williamson the phrase washington consensus has become a familiar term in development policy circles in recent years, but it is now used in several different senses, causing a great deal of confusion. Washington consensus harvards growth lab harvard university. Washington consensus represents the policies collectively pursued by the washingtonbased institutions that dispense advice to developing countries.
John williamson, the washington consensus, 1990 in the essay excerpted here, the economist john williamson coined term washington consensus. What the crisis did, however, was to underscore the instability inherent in capitalist systems even ones as developed and sophisticated as the united states. In each case an attempt is made to suggest the breadth of the consensus, and in some cases i suggest ways in which i would wish to see the consensus view modified. John williamson the strange history of the washington consensus abstract. In recent years, the return of democratic governance has led most latin american countries to abandon the failed neoliberal experiment, bringing renewed growth. Official pdf, 43 pages world bank documents world bank group. One such attempt was called the washington consensus presented by john williamson in 1989, which referred to a combination of principles adopted from various international policies unified in ten main steps as a way of creating a growth pattern for a country mostly developing and transitioning countries. The decalogue of consensus policies laid out by john williamson in his 1989 landmark paper became in the minds of advocates and pundits alike a manifesto for capitalist economic development. John williamson retired in 2012 as senior fellow at the peterson institute for international. President ronald reagan and british prime minister margaret thatcher had come to power in the late 1970s and 1980s attacking the modern.
Labeled the washington consensus by british economist john williamson, these policies failed to promote economic growth, but did dramatically widen the gap between rich and poor. The paradigmatic nature of the washington consensus is most clearly evident in the work of john williamson 1990,1993,1997, who coined the name and also set out a speci. A short history of the washington consensus by john. Avoidance of large fiscal deficits relative to gdp. Williamson born june 7, 1937, hereford, england is a britishborn economist who coined the term washington consensus.
The washington consensus reconsidered paperback narcis. It was right wing policy advice to correct failures of prior approaches to development. 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. From the washington consensus towards a new global governance 3 narcis serra, shari spiegel, and joseph e.
In 1990, john williamson codified this litany of praise for east asian economic management into ten commandments known collectively as the washington consensus to guide policymaking in latin america. 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 washington consensus was applied to structural crisis in other countries, including the transition economies cross and strachan, 2001, p. The ten commandments of the washington consensus balance. Washington does not, of course, always practice what it preaches to. They control voting power and they overwhelm the decisionmaking. Pdf on jan 1, 2014, alfredo saadfilho and others published politics of neoliberal development. Democracy and the washington consensus author links open overlay panel john williamson. Williamson 2004 a short history of the washington consensus. The term washington consensus usually refers to the level of agreement between the international monetary fund imf, world bank, and u. John williamson, the washington consensus, 1990 in the.
We do not take the view that the liberalization reforms of the past decade. The challenge then is to incorporate a broader range of the views of the developing countrtes and the borrower countrtes. The ten commandments of the washington consensus balance of. The washington consensus advocates the following policy stances. The washington consensus is a set of ten economic policy prescriptions considered to. Washington consensus definition and criticism economics help.
Washington consensus and postwashington consensus find, read and cite all the research you. The introduction of the washington consensus involved not simply a swing from. The washington consensus as policy prescription for development. Was shock therapy consistent with the washington consensus. Goodbye washington consensus, hello washington confusion. In this article the author distinguishes between his original meaning.
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