| |
Contributions from
the Column
Studies and reports
“Asia wants to protect itself from financial crises”
WTO bans politically motivated trade preferences
Poverty reduction must fail without women’s participation
“The ability to share must be acquired anew”
‘Washington Consensus’ was not meant to be a term for neoliberalism
2/2004 |
|
[ From a reform agenda to an ideological term ]
‘Washington Consensus’ was not meant to be a term for neoliberalism
John Williamson has not yet given up on Latin America – although following its lost decade of the 1980s the development economist now also describes the years 1997 to 2002 as a “lost half-decade”. Last year, the American academic published a book titled After the Washington Consensus (Institute for International Economics) together with the former Peruvian Economics Minister Pedro Pablo Kuczynski. The book develops a reform agenda for Latin America. The authors presented the Spanish language edition at a conference on ‘Institutions, Competitiveness and Growth’ at the Universidad Peruana de Ciencias Aplicadas in Lima in December.
That Williamson is welcome on the lecture circuit south of the Rio Grande these days is not a matter of course. The man who coined the term ‘Washington Consensus’ still advocates its core points, which for him include putting public budgets in order, trade liberalisation, privatisation and tax reform. By contrast, in Williamson’s view, minimal government or monetarism, which as part of the only moderately successful neoliberal agenda in Latin America have a bad name, were never part of the Washington Consensus. When he coined the term at a seminar in 1989, he says, he was thinking of a Latin American reform agenda which would be accepted by all important actors in Washington – from the World Bank and International Monetary Fund to the US Treasury. However, diverging from this definition the term became an ideological slogan that stands for the radical neoliberal policy which in many countries brought only meagre results.
Nevertheless, Williamson believes the reforms of the last decade have not failed completely as considerable successes were achieved at the macroeconomic level (particularly a drastic reduction of inflation). Yet intended impacts such as poverty reduction, job creation in the formal sector and political stability did not happen. The US economist traces the cause to the reform programme having been incomplete. In his view, such things as the building up of functioning institutions were neglected in many Latin American countries. Therefore, dogmatically implemented privatisation programmes often merely replaced government monopolies with private sector ones. In addition, Williamson complains, the reform-oriented economics ministers did not take account of the extremely unequal distribution of income in the countries, and thus did not develop consistent concepts for poverty reduction. That is why foreign trade shocks – such as the Asian crisis – hit the Latin American economies especially hard.
However, given that such shortcomings will be remedied, Williamson assesses Latin America’s prospects as relatively positive. He says direct foreign investment would once again flow more strongly into the region, its recession appears to have been overcome, and some countries would benefit from the high prices for commodities.
Markus Rühling
|
