The ten policy prescriptions of liberalization, privatization, and deregulation named by economist John Williamson in 1989 and imposed via IMF and World Bank structural adjustment loans on crisis-hit developing countries through the 1980s and 1990s.
The measurable outcomes were severe. Per the UN Economic Commission for Africa, in the post-communist “shock therapy” transition, real GDP fell by 15 percent in five Central European countries, 32 percent in South-East European states, 42 percent in the Baltic states, and 30 percent in the ex-Soviet republics between 1989 and 1993. Least-developed-country per-capita GDP fell from 30.5 percent of the all-developing-country average in 1980 to 22.8 percent by 1998. Economist Robert Pollin calculated that developing countries lost roughly 480 billion dollars per year in potential GDP during the 1980s and 1990s as a result of structural adjustment, losses that outstripped gains from aid by a factor of five. Joseph Stiglitz’s summary: the Washington Consensus did not provide the answer.
The Washington Consensus is the paradigm case of throughput-economics doctrine being imposed on peripheral economies during the late acceleration phase, and its outcomes are one of the primary empirical arguments that throughput logic degrades productive capacity when applied to systems that need retention mechanisms to build one.
Related terms
Sources
- Williamson, J. (1989); UN Economic Commission for Africa, “The New Post-Washington Consensus”; UN DESA, “From Washington Consensus to Inclusive Growth.”
Provenance
Borrowed from Williamson (1989). Extracted from Section 1 of the Research Brief: The S-Curve Thesis.