“The Washington Consensus has been dead for years,” said the World Bank President James D. Wolfensohn at the opening of a conference on ‘Scaling up Poverty Reduction' in Shanghai on 25 May, 2004. “It's been replaced by all sorts of other consensuses. But today we're approaching our discussions with no consensuses,” he added. More surprising than the content of the message is the messenger. Indeed the Washington Consensus has been the core of many debates and a controversial subject for a few years. So the fact that, once again, it can be condemned is not that surprising. Yet the fact that the President of the World Bank himself declares the death of the Washington Consensus is much more remarkable. In fact, this is what gives value to this declaration. The implications are twofold: first, it means that he acknowledges that the Washington Consensus did exist, and more, that it is no longer significant. However it seems that the current situation is less obvious than James Wolfensohn presumes. Obviously this particular way of thinking about the development has been more and more criticized over the past few years. Its failures have been more and more apparent. Its functioning has been denounced in reference to its lack of transparency, but also its lack of legitimacy. Its whole philosophy has been less and less accepted by a range of actors as broad as NGO's, citizens' movements in the developing world and even some people in developed countries. Yet, at the same time, the Washington Consensus has not fully disappeared and its death cannot be completely proclaimed. Indeed, some evidence shows that its end is relative since some of its policies are still inspired by the recommendations of the IMF and the World Bank and that these representative institutions are still strong and dominant.
What is the situation now? Are we facing a post Washington Consensus area? Or are we still under the neo-liberal domination? What evidence could make us understand the current state of the development policies? To what extent is the Washington Consensus dead?
In order to better understand this controversy, I will first describe the origins and the principles of the Washington Consensus. Next, I will present the evidence that demonstrates the disbanding of this way of thinking and what could possibly be the new paradigm in terms of development policies. I will finally present some limitations that illustrate the continued existence of the Washington Consensus.
[...] Therefore, the core question is no longer much state?' but rather ‘what kind of state?' The limitation of the Post Washington Consensus era Even though, over the past few years, we have observed a shift from extreme neo-liberal politics to more inclusive ones, it might be an overstatement to claim that we are definitely in a new way of thinking. Certainly, the way foreign assistance is managed is evolving and a new awareness is expanding. Still, the Post Washington Consensus is not fully established and it will need a few years more to become the dominant model. [...]
[...] To what extent is the Washington Consensus dead? In order to better understand this controversy, I will first describe the origins and the principles of the Washington Consensus. Next, I will present the evidence that demonstrates the disbanding of this way of thinking and what could possibly be the new paradigm in terms of development policies. I will finally present some limitations that illustrate the continued existence of the Washington Consensus. I The reign of the Washington Consensus We cannot wonder if we are facing a post neo-liberal era and analyze the transitional situation without clearly understanding and defining the Washington Consensus itself. [...]
[...] They are now considered as the major implementers of the Washington Consensus and of its neo- liberal policies. The neo-liberal measures applied by the IMF and the World Bank were primarily a response to the debt crisis. Actually, the oil crises in 1973 and 1979, which triggered a severe recession in the North, also precipitated the ‘debt crisis' in the developing world. After Mexico, soon followed by other countries, announced in 1982 that it could no longer service its official debt, Northern creditors feared that, if rapid counter- measures were not taken, there could be a ‘domino effect' among developing countries, one that could undermine the whole financial system. [...]
[...] What makes these criticisms so powerful is the fact that they come from the heart of the Washington Consensus institutions themselves. These voices therefore add credibility and an “insider” perspective to worldwide opposition to the destructive orthodoxies of the two institutions. In addition to such denunciations, other criticisms from influential people have also contributed to the debate, as was the case with Sachs or Sorros. In summary, the increasing awareness of the limitations of the Washington Consensus policies, combined with the rising criticism both external and internal, are the creators as well as poignant illustrations of the shift. [...]
[...] However, a progressive disillusionment occurred with this kind of policy and significant doubts were expressed as to the ability of the Washington Consensus to promote development. From that moment, great doubt arose within the international community in the North as in the South, and some people asked for, and even proclaimed the ‘death of the Washington Consensus'. What factors have led to this rethinking? What evidence proves that the opponents to the Washington Consensus are right in claiming its end? [...]
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