«Washington Consensus" - a set of economic regulations macroeconomic policies set out by the English economist John Williamson in 1989.They are intended as basic guidelines to countries in need of assistance from the international economic organizations such as the World Bank and International Monetary Fund.The main emphasis was on the importance of macroeconomic stability and integration into the world economy, in other words, the neoliberal view of globalization.However, it has led to limited results, after having been applied in countries facing economic crises.
Over the years, the "Washington consensus" has been accused by a number of serious destabilization, especially in the Argentine crisis.John Williamson pointed out that in many cases the results of its implementation were disappointing, identified some shortcomings, but at the same time concluded that this policy has brought positive results - namely, economic growth, labor employment, poverty reduction in many countries.
ideas for the time they were formulated by Williamson, were not new.But they represented the quintessence of the common themes among the recommendations, which were defined by the International Monetary Fund, World Bank, US Treasury and other agencies lending.
The purpose of the standard package of reforms was that solve real problems existing in Latin America.His subsequent use in relation to other countries is criticized, even supporters of the rules.As pointed out by Williamson himself, a term coined by him for the ten specific recommendations on economic policy began to be used in a broader sense than in his original intention, he became associated with the neo-liberal market fundamentalism and politics in general.In this broad sense of the "Washington Consensus" was criticized by many economists, including from George Soresu, Nobel laureate Joseph Stiglitz, also Latin American politicians.
public around the world now convinced that this is evidence of a neo-liberal policies that the international financial institutions in Washington have created a number of specific measures with regard to the Latin American countries are experiencing economic crisis, which led to even greater losses.There are even people who can not pronounce the word "Washington consensus" and it does not come into a rage.
Ten reform, Williamson makes a list, actually represented a basic level.
1. Fiscal discipline.This was to be carried out in all countries where there was a large deficit, which led to balance of payments crises and high inflation that struck the poor classes, because the rich people can keep their cash assets abroad.
2. The redistribution of public spending in areas that offer high economic returns and the potential to improve income distribution (it's health care, basic education, infrastructure).
3. Tax reform (reduction in marginal rates, broadening the tax base).
4. The liberalization of interest rates.
5. A competitive exchange rate.
6. The liberalization of foreign direct investment.
7. Privatization.
8. Trade liberalization.
9. Deregulation.
10. Ensuring property rights.
adopted by many governments "Washington Consensus" was largely a reaction to the global economic crisis that hit most of Latin America and some other developing regions during the 1980s.The emergence of the crisis had a number of reasons: a sharp rise in prices for imported oil after the creation of OPEC in 1960, setting the level of external debt, the rise in the United States, and, consequently, interest rates in the world.As a result of these problems - the loss of access to additional foreign loans.
It should be noted that many other countries have tried to implement various items proposed package, sometimes it is used as a condition for receiving loans from the IMF and the World Bank.
However, the results of these reforms are a topic of much debate, as economists and politicians continue to analyze the causes and factors of economic crises, beginning with the time when there was the first world economic crisis in 1857, which had an impact even on Russia.The fact that Karl Marx began work on "Capital" in winter 1857-1858 year, and it was caused by the economic crisis that erupted in the autumn of 1857 Today, as we know, the theory of crises is associated with Marxist economics.
