Question

What was the ‘Washington consensus’ and why did it end?

Answer 1

The Washington Consensus:- The Washinton Consensus is a body of ten economic policy suggestions considered to constitute the “standard” reform package to upgraded for crisis-wracked developing countries by Washington, D.C.- forme institutions such as the IMF, World Bank and United States Department of the Treasury. The IO economic policies of the Washington Consensus are following,

1. Fiscal Discipline.

2. Reorientation of Public Expenditures.

3. Tax reform.

4. Financial Liberalization.

5. Unified and Competitive Exchange Rates.

6. Trade Liberalization.

7. Openness to FDI.

8. Privatization.

9. Deregulation.

10. Secure Property Rights.

The reasons for end of the Washington Consensus:-

1. The term “Washington Consensus” got a negative reception and developed into an infamous catch phrase associated with the neoliberal, impericilist, market fundamentalist agenda.

2. Joseph Stiglitz pointed out the flows of Consensus and observes that the Washington Consensus is the implementation of fiscally conservative policies.

3. The Washington Consensus became the conditions for the IMF’s conditional loans.

4. The Washinton Consensus stuck in Neoliberal Ideology.

5. By the late 1990 it was clear that the results of the Washington Consensus were far from reality. Increasing Criticism led to a change in approach that shifted the focus away from a view of development, economic growth and toward poverty decreased.