The “Washington Consensus”: Another Near-Death Experience?

Many times, since I first used the phrase in 1989, the “Washington Consensus” has been proclaimed dead, most recently by Prime Minister Gordon Brown of Britain at the press conference following the G-20 summit in London earlier this month. Yet most of the governments of the world seem to be determined to follow the precepts originally enshrined in my ten points under the Washington Consensus heading, irrespective of the ritual condemnations by their leaders.

Some of the critics have doubtless never troubled to read the original and therefore fallen prey to the populist reinterpretation of the Washington Consensus as a neoliberal tract, a reinterpretation endorsed in recent years by figures such as Joe Stiglitz and Naomi Klein. The problem with this interpretation is that there never has been a consensus in Washington or anywhere else in favor of monetarism, “supply-side economics,” belief in the ubiquity of perfect competition, the immorality of state action to redistribute income from rich to poor, and the other cranky right-wing doctrines that have been  grouped under neoliberalism. There have doubtless been individuals, and even administrations, that espoused such beliefs, but they are as representative of Washington in general—including such Washington-based institutions as the World Bank and International Monetary Fund—as is the neoconservative belief that it is smart policy to spread democracy by invading countries.

In introducing the communiqué of the London summit to the press, the UK Prime Minister Gordon Brown not only declared that the old Washington Consensus was dead but also that it had been superseded by a new consensus achieved in London. This suggests that it is worth doing two things: First, examining Mr. Brown’s record on the ten specific points that I included in the original statement of the Washington consensus. (I ignore the populist reinterpretation, which remains—thankfully—as dead as the critics assert.) Second, trying to distill the London consensus of which Brown spoke and comparing it to the original consensus.

To turn to the first of those tasks, my ten points were as follows.

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