chapter  4
10 Pages

Paradigms of transition

The Washington Consensus refers to a set of policy guidelines for most Latin American countries in the late 1980s for which, it was argued, a consensus was reached among Washington-based international agencies, the US government and mainstream economists. John Williamson of the Institute for International Economics, the person who coined the phrase, viewed these policy reforms as the lowest common denominator (or, as in his own words ‘the common core of wisdom’) of policy advice by ‘Washington’ to Latin American countries as of the late 1980s.3 The ten economic reforms focused primarily on structural adjustment policies of price and trade liberalisation, macroeconomic stabilisation and fiscal discipline, deregulation of entry barriers and privatisation of state-owned enterprises. Table 4.1 lists the ten policy reforms identified by the Washington Consensus.