The Washington consensus : assessing a damaged brand

Abstract

The authors analyze the Washington Consensus, which at its original formulation reflected views not only from Washington, but also from Latin America. Tracing the life of the Consensus from a Latin American perspective in terms of evolving economic development paradigms, they document the extensive implementation of Consensus-style reforms in the region as well as the mismatch between reformers’ expectations and actual outcomes, in terms of growth, poverty reduction, and inequality. They present an assessment of what went wrong with the Washington Consensus-style reform agenda, using a taxonomy of views that put the blame, alternatively, on (i) shortfalls in the implementation of reforms combined with impatience regarding their expected effects; (ii) fundamental flaws—in either the design, sequencing, or basic premises of the reform agenda; and (iii) incompleteness of the agenda that left out crucial reform needs, such as volatility, technological innovation, institutional change and inequality.Debt Markets,Emerging Markets,Economic Theory&Research,Achieving Shared Growth,Access to Finance