Washington Consensus

It was coined by the US economist John Williamson.

  • It was a set of ten economic policy reforms which aimed to promote for crisis-wracked developing countries by Washington DC-based institutions such as the International Monetary Fund (IMF), World Bank and United States Department of the Treasury.
  • The policy prescription led to processes which are known as Liberalization, Privatization and Globalization, thus cutting down the role of the State in the economy more so in the nations which got developmental funding from the WB and IMF in times of the Balance of Payment crises as in the case of India.
  • However, in coming times, the term became synonymous to neo-liberalism, market fundamentalism and even globalization across the world. It has often been used to describe an extreme and dogmatic commitment to the belief that markets can handle everything.
  • It is widely believed that this signifies a set of neoliberal policies that have been imposed on hapless countries by the Washing ton based international financial institutions such as World Bank, IMF and WTO that have led them to crisis and misery.
  • Countries like India, China, and Russia along others have been against the Washington Consensus. Also, several multilateral forums and Banks such as BRICS, AIIB, and New Development Bank have been set up in response to this.

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