All Bretton Woods institutions need a profound reform of economic thought; the prolongation of the capitalist planned economy will lead to ever greater failure of markets and the state. The attached presentation contains some important points for reforming economic policy.

Dear Stephen,

Thank you, one more time, for your important contribution.

AH

Me parece que ni antes y tampoco ahora el consenso de Washington ha sido de beneficio para los países del tercer mundo, en aquella en aquella época incluido México (eufemismo ahora, países en vías de desarrollo)

Si estoy de acuerdo en que ha sido de beneficio para Estados Unidos y su sistema capitalista aún dominado por la economía del dólar, mismo que cada vez está más débil por falta de respaldo real en oro.

It seems to me that neither before nor now has the Washington consensus been of benefit to the third world countries, in that time including Mexico (euphemism now, developing countries)

If I agree that it has been of benefit to the United States and its capitalist system still dominated by the dollar economy, which is increasingly weak due to lack of real support in gold.

Not sure will fallow the answers

Dear Dr. José Luis, Dr Monyer and Dr. Anand,

Thank you all for the insights.

Best regards.

AH.,

Greetings from Romania!

In my opinion, there is no "standard" reform package for all the countries, either developed or developing/emerging. Washington consensus is good for the US, Mumbai consensus is good for India and so on. Each country should adopt its own reform package, suitable for the internal situation at a given time.

All the best,

Monica

Absolutely not. The Washington Consensus basically replaced development, which meant growth and inclusiveness, and economic development with a new concept of adjustment. The adjustment programs of the WC (excuse me for the abbreviation) focused on stabilization of macroeconomic indicators without paying any attention to the needs and capacities of the developing countries or their poorer population.

The WC spoke of liberalization of trade at a time where developing countries where lacking production capacity. The WC never paid attention to the three pillars of the 2015 SDGs, economic development, social inclusiveness and environment.

The WC with the IMF as its implementation tool was to rescue the financial system and the bad debts they made to the developing countries without taking account of the creditworthiness of the countries they lent to and their capacity to pay. The financial system and the U.S. banks in particular were never blamed for their bad debts.

The same happened with the bad debts in real estate and the 2007/08 financial crisis which was again exported from the U.S. to the rest of the world. There is a major problem today with the lack of adequate regulations for the financial system and a financial organization to deal with it. The post-WWII institutions do not serve the financial system.

Essentially not in the way it is implemented by the IMF and the EU.

The onset of globalisation and emergence of economies in transition have brought into sharp focus the most appropriate paradigm to develop national welfare in both developed and developing economies. The influence of the International Monetary Fund, the World Bank and the G7 countries, led by The United States of America, has been important in setting the agenda. In the 1980’s and 90’s the neoliberal paradigm that was favoured as a recipe for success was epitomised by the use of the term “Washington Consensus” (WC) as a descriptor of the recommended template for economic success. The description was coined by Williamson (1989) and despite the fact that he claims that his paper has been misinterpreted by both supporters and detractors, it remains a useful means of explaining the influence of the International Finance Institutions (IFI) on the development of the world economic order (see Rodik 2006, Williamson 2008, Babb 2012).

The world is becoming a more unequal place with the alleviation of poverty moving at a pace, which brings into question the benefits of globalisation. The issues of inequality, poverty and the continuing belief in the paradigm of the Washington Consensus are questions which are not confined to emerging markets, but which resonate equally throughout the Western world (Held 2005). Within this belief lies the conflict of applying an international consensus to national problems, without consideration of politics, culture, religion, economic status or regional imperatives (Gore 2000). To this essentially economic and financial model was added the belief that Western democratic norms were an essential subset for successful implementation of reform (Dreher 2006).

The view emanating from the WC is that there is a universal panacea, which improves national welfare wherever it is implemented. This applies to both developed and developing countries and has been the source of controversy, with a number of critics claiming that it is primarily a device to protect creditors from default (Stiglitz 1999). There is a body of literature which uses the descriptor “post Washington Consensus”, however it is recognised that any change in the basic tenets or implementation of the programme is more of an augmentation evolutionary process than a paradigm shift (Rodik 2006. Babb 2012).

The WC programme is weighted towards conditionality lending and key elements of reform are the encouragement of trade liberalisation with its key elements of foreign direct investment (FDI), loan finance, privatisation and institutional development. Therefore regardless of the culture, politics, welfare and economic needs of the country if you want the cash you have to adopt the neoliberal agenda and this has proved problematical in Latin America particularly Mexico in the nineties, the Asian crisis during the same period and in the Eastern European transitional economies. An evolutionary institutional approach avoids the one size fits all approach of the WC programme (see Gabrisch and Holscher 2006).

Dear Dr. Iulia Monica,

Thank you for sharing your vision.

I really appreciate that.

All my best wishes.

AH.

Dear Magda,

In fact, the WC (good one!) is far behind the SDG´s.

It´s something to carefully think about.

Thanks for sharing your point of view.

All my best wishes.

AH.

Dear Peter,

You did an incredible explanation.

It´s very interesting to me, as I am a macroeconomic researcher, to receive different point of views. And yours really captured my atttention.

Thank you for sharing your vision.

I really appreciate that.

All my best wishes.

AH.

Very good responses, especially from Magda and Peter, of what was also known as WB-IFM Structural Adjustment Programs (SAP), which started being implemented after the 1970s financial crisis. As it has been said, the implementation of SAP was a condition for highly indebted countries to continue receiving financial assistance, while restructuring their economy to ensure the re-payment of the debt. However, as re-payment tool, this program was a failure given that it was a prescription to cure all economic and social illness of all indebted countries rather than being country specific. The WB and IFM later redressed the SAP and created the Heavily Indebted Poor Countries Initiative (HIPCI), which included similar measures and also included debt forgiveness if the countries met certain macro-economic conditions.

Having said that, the WC is still being the bases to prescribed economic policies in DCs. Some of the 10 policy prescription are key for economic development. Perhaps the problem is that is still being prescribed across the board rather than being adapted according to specific country conditions, which requires an in depth analysis of the macro- and micro-economy by well trained and experienced technical team to make sound policy recommendations that will boost development, taking in consideration the social, political, institutional and economic conditions of the country.

Otherwise, as a matter of question, what would be the alternative?

Dear Porfirio,

Liked very much your answer.

I strongly agree with you when you say " Some of the 10 policy prescription are key for economic development. Perhaps the problem is that is still being prescribed across the board rather than being adapted according to specific country conditions."

And, you said exactly what I am looking for: "what would be the alternative?"

Thank you very much.

All the best.

AH

Steady on Guys see links and references below. There is an argument to say that the evolutionary institutional approach is superior. See the following for a comprehensive review of the two programmes:

Gabrisch and Holscher 2006 "The Successes and Failures of Economic Transition

Transition: An evolutionary institutionalist perspective Gérard Roland (University of California, USA)

Dear Scientists,

While I work on my research projects, I share some parts with specialists to have some support and critics. I believe that it makes better the quality of my work.

Thank you to have participated actively in the discussions I proposed. Your vision is a very good contribution to me. The best way to make me a better scientist.

All the best for all of you.

AH

Dear Peter,

Your explanation is the best I ever had over the WC, influences, and consequences.

I totally agree that "an evolutionary institutional approach avoids the one size fits all approach of the WC programme". This has been the great battle between the supporters and detractors, always.

I´ll take a look at what you have cited.

Thank you for your attention and kindness.

All the best for you.

AH

Dear Aurelio

It has been a pleasure to converse with you.

My Best Wishes

Peter

Thank you Aurelio for your comment.

It may be difficult for most of us to think outside the box and come up with an alternative to the WC policies, considering that perhaps we all have been trained with the Chicago Boys type neo-liberal economic theory and mindset. Still, looking at WC policies somehow objectively, and after looking at the experience in some developing countries which have made advances in economic development, which is the aim of the WC (mind you that economic development do not necessarily equate social development), then we can say that such policies are still valid. Unfortunately, equity is not an issue under such theory.

Perhaps the argument should not be on whether the WC policies are still best or about looking for alternative set of policies, but we should be looking at how we can prioritize and come up with the right blend out of WC policies, according to the socio-economic, institutional and political conditions of a given country. More important yet, is to look at the underlying programs that emanate in support of such policies to make them more effective and address not only the economic agenda but also a social agenda.

Unfortunately, under the neo-liberal theory which emphasize on economics, there seem to be a trade-off between a social and economic agenda, and trying to do the opposite, emphasizing or simple give a higher weight to a social agenda, it run the risk of being labeled as socialism. And I believe it is there where the WC has failed.

With this response I end my participation. I wish you the best with your research.

Dear Porfirio,

Great participation.

Thank you very much for the insights.

All the best for you.

AH

I was talking to a friend the other day, who has been in both development banking and academia, about the fate of African development. We noted that although the 1960s was the great independence decade on the continent, many African countries were under military dictactorships, and on the road to economic ruin, barely 5 years after independence. The oil shocks of the early 1970s "finished the job."

The point I am making is that the "Brettonwoods consensus" and similar projects were symptoms of Africa's policy (political) malaise, not the causes. They reflected in the first instance domestic inadequacies, especially lack of a credible policy formulation and implementation strategy. Notably, the national development plans that countries launched every five years (with much funfare) were ultimately "works of fiction."

To overcome the "capture" that Prof. Hess is concerned about, African/low- income countries must admit that they have internal weaknesses and inconsistencies that must be addressed urgently. We can't credibly blame others i.e. IMF or World Bank decade after decade for our inadequacies. In the absence of efforts to rectify our development gaps, what is true for physics is true for policy: a vacuum has little say on what fills it. skm

The Washington Consensus was a set of policy recommendations supported by a number of international monetary institutions that included the International Monetary Fund (IMF), the World Bank WB). They were a set of economic recommendations that were established in developing countries to pay their debts.

Dear Steve,

It's Always good to know your opinion. Thanks for sharing.

AH

Dear Steve,

I´d like to clarify what I said. Why I like to know your opinions.

I research Sustainable Economic Development of/for BRICS. I live in Brazil, and we had to seek succor to BW institutions so many times in the near past. But the country keeps bad. And that´s why I think I can see what you say.

Your point "that the "Brettonwoods consensus" and similar projects were symptoms of Africa's policy (political) malaise, not the causes" works perfectly for Brazil. "They reflected in the first instance domestic inadequacies, especially lack of a credible policy formulation and implementation strategy."

And in Brazil´s 70th and 80th' decades - as you said about Africa - "the national development plans that countries launched every five years (with much fanfare) were ultimately works of fiction" works perfectly again for Brazil.

And one more time, as you said about African/low- income countries, Brazil "must admit that we have internal weaknesses and inconsistencies that must be addressed urgently."

We Brazilians did blame others for a long time, and bad politicians still use this to confound people. But now we are conscious that we "can't credibly blame others i.e. IMF or World Bank decade after decade for our inadequacies."

What I am saying is that EVERYTHING THAT YOU HAVE EXPLAINED ABOVE, WORKS PERFECTLY FOR MY COUNTRY. And that´s why I appreciate so much when you manifest your point of view. I believe that you have "excellent lens" to see what really happens.

Your opinion is been important to my research works.

Thank you very much.

Hope you keep commenting what I do.

All the best for you.

AH

Dear All,

Let me give you an example with some experience of Bosnia's economy and Washington consensus and its consequences....

Article Lessons from transitional economies’ failures: Why is B&H a ...

Why are some countries as Bosnia and Herzegovina destroyed by war need to follow the same Washington consensus path to economic growth as developed countries?

The main principles of Washington Consensus have become questioned. As a J. Stiglitz found Stabilization policies described as fiscal and monetary policies neither ensure economic growth nor stability. Countries that have followed strictly IMF’s doctrine (from Bolivia to Mongolia), were suspicious about gaining the benefits while Chile or China that took over something in their hands, have performed much better. Also, in open capital markets, unexpected changes in investors’ views and attitudes lead to massive outflows which eventually resulted in economic destruction.

Dear Dr. Ganic,

Very well pointed.

Thanks for sharing your valuable opinion.

Best wishes.

A. Hess

Sustainable development can have several meanings, and some of them are different from Washington consensus that describes only macroeconomic part. I agree with some criticism above (especially about failures in some transition economies) but will not discuss economic part now.

People from environment understand that economics is not independent but interacts with environment. It was probably first understood in 1970s in the works of Club of Rome (Meadows et al); see http://www.donellameadows.org/wp-content/userfiles/Limits-to-Growth-digital-scan-version.pdf . I have also this model of interaction between economics and nature as the 1st model in this paper, he 2nd is about urbanization as a tool to stabilize population of the Earth. See Conference Paper Low-Dimensional Nonlinear Dynamical Systems as a Tool for So...

Dear Yuri,

I will take a good look before commenting.

Thank you very much.

Hess

This recipe is a slogan. It is important to reach the time and how much it reaches

Interesting discussion...

With such an interesting discussion, I felt again the 'drang' to take. If Washington Consensus was not the cause but the symptom of Africa's malaise, it was certainly not the cure either.

With more public rather than private debts, the Washington Consensus was not designed for the African countries in the first place. WC was designed to the biggest private debtors of Latin American countries to make them pay their debts and salvage the financial system, particularly the American banks, which created havoc with their bad and mistaken decisions.

For purposes of comfort and ease, the WC was then considered as the 'panacea' for all ills, which did not work. The WC was a short-sighted attempt to deal with the now inflated problem of 'Financialization', for which to date they came to no cure and no one dare to address adequately, lest the whole system collapses.

The issue is not the adjustment of the developing countries, the issue is setting new rules and norms for the banking system. Financialization and not developing countries' adjustment is today's number ONE problem of the world economic order for which the WC is irrelevant and outdated.

Dear @ Shaho,

The question is:

The Washington Consensus is a set of 10 economic policy prescriptions considered to constitute the "standard" reform package promoted for crisis-wracked developing countries:

Do you agree with the 10 prescriptions? some of them? which ones?

The Washington Consensus was a set of 10 economic policy prescriptions, it was in 1989. Now the world has changed and economic policies too, Globalizations has its implications.

Interesting

Was Washington Consensus ever 'the best' for the lower income world? The jolt of minimalist state of the nineties is being exposed as imprudent by the present wave of PPP. See Article Public-Private Partnerships (PPP) on Moulding State Structur...

The Washington Consensus was in another economic, political and social context. The globalization of the economy was not very strong; rather, the Consensus was established so that developing countries that were heavily indebted could for the interests of the external debt.