Doctor Essay

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By Didula Rajapaksha International Relations – University of colombo By Didula Rajapaksha International Relations – University of colombo Washington Consensus: A Dead Concept? Washington Consensus: A Dead Concept? Table of Contents Introduction 2 Background 3 Fiscal Policy 6 Redirection of Public Spending 6 Tax Reform 6 Moderate Interest Rates 7 Exchange Rates 7 Trade Policy 8 Privatization 8 Deregulation 8 Property Rights 8 Implications of Washington Consensus 9 Main reasons to breakdown the system of Washington Consensus 9 Consequences 11 Factors in defence of the Washington Consensus 12 Conclusion 13 Bibliography 15 Introduction The concept and name of the Washington Consensus were first presented in 1989 by John Williamson, an economist from the Institute for International Economics, an international economic think tank based in Washington, D.C (Williamson, John: What Washington Means by Policy Reform, Institute for International Economics 1989) Williamson used the term to summarize commonly shared themes among policy advice by Washington based institutions at the time, such as the International Monetary Fund, World Bank, and U.S. Treasury Department, which were believed to be necessary for the recovery of countries in Latin America from the economic and financial crises of the 1980s. This is the set of 10 policies that the US government and the international financial institutions based in the US capital believed were necessary elements of “first stage policy reform” that all countries should adopt to increase economic growth. At its heart is an emphasis on the importance of macroeconomic stability and integration into the international economy - in other words a neo-liberal view of globalization. These reforms have since come under heavy criticisms and subsequent alterations have been made to the proposed policy

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