ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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The Washington Consensus and Beyond

The term `Washington Consensus', which emerged in 1989 as a by-product of a historically unusual degree of consensus that Latin American countries needed to stabilise, to open up their economies to trade and FDI and to liberalise, has proved controversial right from the start. Most opponents of the Washington Consensus appear to have used the term in recent years to mean universal application of the neoliberal interpretation of the term. Perhaps this usage was to some extent legitimised by the fact that at least for a period in the 1990s some of the Washington institutions - the IMF and key agencies of the US government like the Treasury - did indeed urge parts of this extended agenda, most damagingly a pace of capital account liberalisation that most people agree in retrospect to have been precipitate. But even if the Washington Consensus is absolved of responsibility for provoking crises, it is true that outcomes in Latin America have disappointed in the last decade, including in many countries that have stabilised, liberalised, and opened up. This suggested that the time was ripe for taking another look at the policy agenda of the region. The results of this effort are being published in After the Washington Consensus: Restarting Growth and Reform in Latin America [Kuczynski and Williamson 2003]. The focus is on Latin America, but the history of the Washington Consensus suggests that one needs to ask if the thoughts could be of wider relevance. Obviously they will need amending to suit the circumstances of a particular country. The author has classified the new reform agenda into four big themes: crisis-proofing; completing (and, where necessary, correcting) the `first-generation' liberalising reforms that constituted the core of the Washington Consensus; complementing them with `second-generation' (institutional) reforms; and broadening the reform agenda to include a concern with income distribution. This paper is devoted to sketching these four themes.

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