Economic policy
in the 90’s
A commentary concerning the
"Washington Consensus"
I. Introduction
Long before the beginning of 1990 -after the fall of the Berlin wall- real socialism was gradually questioned or given up as an economic approach. But it was then that certain economic groups tried to formulate a list of economic policies constituting a sole "paradigm" for the overconfident capitalistic economy. This list is supposedly meant especially to guide governments of developing countries and international organizations (International Monetary Fund and World Bank -from now on IMF and WB-) when it comes to estimating the progress of the former asking the latter for help, with reference to economic orthodoxy.
"Through a set of rules the Washington Consensus sets up an atmosphere of economic transparency also. These rules are there not only to hold transparency as an essential element but also because the very existence of prescriptions is like a mirror to look into when willing to estimate the economic activities of the various countries" (1).
For developed countries -and for the USA in particular- the formulation of this Consensus meant a challange too: the coalescence of policies to help developed countries to take up the chances and avoid the drawbacks of emerging new markets:
"The Washington Consensus seemed to many people the footmark of a decisive moment for world economic affairs. At the time when the mortmain of the State was beginning to withdraw from Third World economies and when investors were beginning to be aware of the enormous possibilities of profit from those economies, the world was ready for a long period of fast development in countries which had been poor before and for large-scale capital turnover from North to South. The issue was not whether the optimistic prospects regarding growth in large emerging markets would come true, but whether industrialized countries would be up to facing this new competitiveness and to availing themselves of the opportunities now offered by this growth" (2).
The rate of concern of international organizations or of the USA government regarding the framework of the Washington Consensus is liable to discussion (3). In any case, the conflicts which once shook the theory and practice of economics -mainly in Latin America questioned by the IMF and the WB- were considered finished. Unreasonable nationalism was laid aside; but the IMF and the WB had changed also and had embodied -by virtue of their practical ways- some social proposals in their compromise programmes (4). It was no longer a matter of global arguments setting planning against market, demand policies against supply policies, substitution of imports against liberalization of economies. Ideologies had come to an end.
"The end of those ideologies does not imply the end of useful arguments but rather the beginning. Nowaday discussions -such as the ones being held about the incentives or lack of them which unemployment systems might have or about the advantages and disadvantages of various provision systems of health and education welfare- are of a greater interest than the old discussions among the followers of some "models of society". Discussions are sharper nowadays and this makes them more useful, but also more difficult. To know one’s whereabouts is now harder than it was before..." (5).
Systematic global crises and quick-moving changes have caused supplementary economic problems in the 90s. In front of these crises -partly related with the expectations or fears of some economic agents- setting up an agreement and promoting a "culture of stability" would permit to make the most of the opportunities arising from emerging countries.
The economic facts of this last decade of the millennium have been complex and have raised a great variety of comments. In fact, in the year 1994-95 there was an economic and financial crisis in Mexico. In 1997-98 there was a second crisis starting in south-east Asia with effects in Latin America and Russia. Meanwhile inflation and macroeconomic unbalance have been under control in Europe and the USA, but unemployment is still a significant problem.
The following pages will deal first of all ("II. The formulations of the Washington Consensus") with the contents of the so called "Washington Consensus" which has undergone the attempt to be put forward as the only economic "paradigm" in the post-socialist era. Next ("III. The Washington Consensus problems") the drawbacks of this supposedly unique "paradigm" will be analysed and taken further starting from proposals originating from the economic praxis of the 90s ("IV. Beyond the Washington Consensus: new contents, new methods"). And finally (part V) the conclusions.
II. The formulations of the "Washington Consensus"
Williamson’s formulation in 1990
The first formulation of the so called "Washington Consensus" is due to John Williamson ("What Washington means by Economic Policy Reform") (6), and it was dated in 1990. The document specifies ten items on economic policy which -according to the author- "Washington" agrees on. "Washington" means the political-economic-intellectual complex made up of international organizations (IMF, WB), the Congress of the USA, the Federal Reserve, the Administration top Officials and groups of experts (7). The items on which there is supposed to be an agreement are (8):
- budgetary discipline;
- changes in priorities for public expenditure -from less productive areas to health care, education and infrastructures-;
- fiscal reform aiming at being out for broad taxable basis and moderate marginal rates;
- financial liberalization especially for interest rates;
- search and maintaining of competitive exchange rates;
- commercial liberalization;
- openness to the entry of direct foreign investments;
- privatizations;
- deregulations;
- safeguard of property rights.
Other formulations
There have been other formulations of the "Washington consensus". In a comment on Williamson’s document Fischer mentions four basic aspects: a sound macroeconomic frame; a smaller sized and more efficient public sector; an efficient and expanding private sector; and policies aiming at diminishing poverty (9). Krugman sums up the consensus like this: "...the Victorian virtue applied to economic policy: free market and strong currency" (10).
In 1993 Williamson himself remade and specified the ten items in another article ("Democracy and the ‘Washington Consensus’" (11)) in which he upholds once more the need of a consensus and specifies its length by distinguishing three kinds of economic policies (12):
a) those policies to which a consensus has been secured;
b) those policies about which there is a technical controversy having nothing to do with equity matters.
c) those policies about which there is a long lasting controversy because of the involvement of political values: equity problems mainly.
In fact Williamson -inspired by R. Feinberg- is ready to change the concept "Washington Consensus" into "universal convergence". The latter is less demanding and, besides, it permits to forget that sometimes "Washington" proclaims rather than carries out the policies enclosed in it.
However, "things" have been taking place between the year 1993 and the end of the decade: especially the Mexican and Asian crisis mentioned above. That is why Manuel Guitián and Joaquim Muns (13) suggest a reform of the consensus based on the hints arising from the G-7 meeting of October 1998.
Let us point out finally that it has been said that the economic policy regulations of the Maastricht Treaty are for the EU an adaptation of the "Washington Consensus" (14).
III. The "Washington Consensus" problems
Excluding important matters
The main problem with the Washington consensus is that the equity issue remains practically out of it. This omission is serious because Latin America is one of the places where compromise policies deriving from the Consensus and implemented by the IMF mostly apply. And this is the continent with the greatest inequality in the world: the GNP per capita of 20% of the wealthiest population is 18.7 times the GNP per capita of 20% of the poorest population, while in the OECD countries the ratio is 6.8 and the world average is 7.1 (15). In any case, in the year 1990 Williamson argued about the direct exclusion of equity problems as follows:
"I tried rather to describe what is usually regarded as wise than to explain my opinion. What I mean is that it was my intention to work out rather a positive list than a normative one (...). Deliberately I excluded the list of all things basically redistributive -not the things having equitable consequences as a subproduct of the search for efficiency claims- because I thought that Washington in the 80s was a very contemptuous city with regard to equality concern" (16).
Topics like development or ecology are also excluded. On the other hand, in a context of "success of capitalism" the proposals are rather liberalizing or anti-state, and very little is said about the need of governmental task to struggle for sustaining true conditions of competitiveness in the markets.
Williamson’s 1993 version of the Consensus confirms the exclusion of the equity issue, but it does not help much to solve it (17).
The methodical origin of this exclusion
The origin of the exclusions mentioned above has to do with the formulating method and verification of this Consensus.
For one thing, what Williamson includes in the word "Washington" is not very clear. According to the author it includes a list of institutions being in agreement on certain matters (18), but when he says "Washington not always carries out what is proclaiming" he is just talking about the USA Government (19). Besides, if he says that "Washington is a contemptuous city with regard to equality matters" he is excluding -as Fischer complains- the WB which at least is concerned about rationalizing social expenditure (20). Finally, Richard Feinberg argues about why the consensus put forward by Williamson should be in the USA Congress:
"After all, a little less than half the Congress would do away with all international finance institutions (I.F.C.) if the issue was put to the vote" (21).
The ambiguous meaning of the word "Washington" takes us to the core of the methodical question about the Consensus. Really speaking Williamson tries to formulate the economic policy paradigm starting from the mutual agreement among the "powers" which can dictate it. Williamson qualifies as "positive" the list of policies which he believes to be the outcome of this agreement... because it "describes" and because it excludes disagreements and more in particular equity problems. It is worthwhile repeating a quotation from Williamson himself:
"I tried to describe what is normally taken as correct rather than to set forth my own view. That is to say, I aimed at working out rather a positive list than a normative one" (22).
The problem is that in addition to not knowing very well
a) who are included in the word "Washington" (the group of individuals coming to the agreement) and
b) what exactly they agree on,
it follows furthermore that we can call in question the impartiality or the absence of self-interest among those who draw up this Consensus. Quoting Krugman again:
"The issue was not whether the optimistic prospects on growth of large emerging markets would come true, but whether industrialized countries would be able to deal with further competitiveness and make good use of the opportunities offered by this growth" (23).
But if on top of it this "positive list" which is meant to guide the macroeconomic policies of Latin America, excludes equity problems -...and ecologic problems- from the most unequal continent on earth, extra problems are still added to it. Because, although in Washington there might be no agreement on equity matters and although Washington of the 80s might have been "contemptuous with regard to equality concerns"... however, in Latin America there are people starving by the side of great millionaires. And if the new and sole paradigm of economic policy is not to consider this fact, then the problem turns out to be really serious (24).
Empirical verification of the Consensus performance
In any case, however, what eventually leads in positive matters is the empiric verification. If we follow Krugman, the "empirical verification" of the "positive list" has not quite produced very good results in the light of the 1994-95 Mexican crisis.
In fact Krugman explains how the contrast with the real facts of the Washington list has worked out and he foresaw -in July/August 1995 already- the problems which have really come up in the second half of this decade.
"... the five year long Washington Consensus supremacy can be considered in a very practical way as a kind of speculative bubble having an effect not only on the usual economic process by which an excessive optimism of the market may constitute a prophecy to come true by itself temporarily, but also a more subtle political process by which politicians’ and investors’ common believes will prove to be reciprocally strengthening. Unfortunately any self-strengthening process of these characteristics eventually has got to face a verification of facts and if it follows that facts are not as good as myth the bubble bursts. The Mexican crisis, from all its special characteristics, marks the beginning of the Washington Consensus deflation. This deflation guarantees that the second half of the 90s will be a much more problematic period for world capitalism than the first half" (25).
In the same article, in fact, professor Krugman thinks that the modest recovery of economic prospects at the beginning of the 90s -following the strong crises of the 80s- created a kind of "speculative bubble": investors started to invest in emerging markets and caused prices to raise gradually, boosted by the investors themselves. In the meantime the "Washington Consensus" was being worked out and gradually everybody began to believe in it . When the governments of emerging markets adopted the pack of policies put forward by the IMF based on the Consensus, investors relied on those countries even more and so they continued to invest in them. In the short term, therefore, the packs seemed to work.
"And in fact the packs worked and as a matter of fact they did surprisingly well at the beginning, although not necessarily because of their fundamental economic worth. Rather the unexpected improvement on the investor’s confidence was an immediate reward to the Washington Consensus reforms" (26).
But in the middle term the pack did not work so well. Large medicine packs usually hold certain drugs which may cause patients’ health to get worse... unless a good Doctor is near the patients. One of the drugs ingested by patients without a doctor’s prescription was commercial liberalization: this liberalization together with exchange policy led to the 1994-95 Mexican crisis. Liberalization of flows has been definitely a harmful drug which contributed to the 1997 Asian crisis.
At all events it was economic reality that did not let the IMF packs work in the Mexico affair. And the speculative-academic-political bubble favoured by the Washington Consensus burst.
Attention to institutional realities
It is not clear that Krugman’s prophecy with regard to "deflationary" prospects of the investors in the second half of the 90s has been fulfilled. On the contrary it seems that investments made with such a narrow mind moved from Latin America to South-East Asia so as to originate another "bubble" there which burst in 1997. And one more bubble also seems to be swelling in the USA itself after the Asian crisis. Money greed is a bad adviser.
It is not clear either to what extent the Mexican and the South-East Asian crises had an effect on the Washington Consensus. As a matter of fact Joaquim Muns is of the opinion that the Consensus has not been excessively affected and the conclusions of the G-7 meeting of October 1998 include the necessary changes in order to readjust the economic policies of the Consensus following these crises (Muns 19-22).
What certainly seems clear is that in as far as the Washington Consensus policies are reasonable they should not be overshadowed for lack of specific adaptation to each country where implemented. Precautions are important under two aspects:
a) Fully analyzing each drug in the pack in order to verify if it is suitable for the patients who are going to take it.
b) Keeping an eye on the combination of drugs so that they really help to heal the patients (27).
To sum up: the institutional contexts of these policies must be handled with care lest they had harmful effects because of their being received from political or cultural contexts other than the ones of those people by whom the policies were designed.
It is in this sense that "institutional development will become a more and more important component of development strategies in the 90s" (28).
It so happens that if the packs of policies deriving from the Washington Consensus are applied unwisely (29), this may lead us to fall into the same thing which we were trying to avoid: "ideology". "The end of these ideologies does not mean the end but the beginning of useful discussions", Fernández Ordóñez said. But unless each specific measure is adjusted and the block of policies is reviewed in every country where it is applied, there is the danger of falling back into "ideologies", in other words, into ideas making us blind (30).
IV. Beyond the "Washington Consensus", new contents, new methods
The World Bank: from Washington Consensus to Santiago Consensus
The World Bank is one of the institutions which most has called in question the "Washington Consensus". In spite of the Bank itself being comprised in the list of institutions included by Williamson in the word "Washington", its latest executives and economists are stepping out of the "Consensus" line.
For example, Joseph Stiglitz, the Bank Chief Economist until December 1999, says that the policies put forward by the Consensus may be necessary but not sufficient; and that besides some of them might not even be necessary. Indeed,
"Some countries have closely followed the dictates of the model, but have not seen especially strong economic performance. Other countries have ignored many of the dictates -at least with respect to the crucial details of sequencing- and have experienced some of the highest rates of sustained growth the world has ever seen. By focusing on too narrow a set of objectives -increasing GDP- other objectives, such as equity may have been sacrificed (...). On trying to force rapid transformation -often by imposing strong conditionality for the receipt of vitally needed assistance- not only were democratic processes undermined, but political sustainability was frequently weakened" (31).
According to Stiglitz, therefore, the objectives of economic policy cannot be reduced to an increment of the GNP. The following should be included (32):
- improvement on living standards (education and health care included);
- an ecologically and politically sustainable development to the effect that the policies applied may withstand the vicissitudes of the political process;
- an egalitarian development;
- a democratic development together with a conscious participation of citizens in collective decisions affecting them in so many ways.
Stiglitz also complains that the "Washington Consensus" did not stress sufficiently the need to reinforce competitiveness in the markets (33).
James Wolfensohn, the World Bank director, regards the "Washington Consensus" as good; but he suggests that it should be taken further by following the "Santiago Consensus". Sure enough, in 1998 at the "Summit of the Americas" in Santiago de Chile, the Heads of Latin American governments seemed to have accepted the "Washington Consensus", but they also agreed on other policies and on the convenience of carrying them out.
"Education is the first element of the Santiago Consensus, because it is the key to unlocking equal opportunity. Next is health care. Then comes infrastructure -especially rural roads because without them people cannot get to school. Then a justice system, because you cannot have equity without a legal system that works. The economic distortions created by crime and drugs must be eliminated. And civil safety must be ensured. Other important elements of the new Consensus are well-functioning financial systems, urban and rural strategies, and power, sanitation and communications services (34)".
New methods
But, in addition to the fact that the contents of the Santiago Consensus make the contents of the Washington Consensus more extensive, the need of having recourse to new methods towards implementing economic policies designed for the attainment of these new objectives is disclosed. Wolfensohn says that traditionally the government has been the key player. Today, however, it must be taken into consideration that no single leader is comprised inside the "government", but "a complex and changing combination of relations within the government setting" (35). And other agents also are to be included: civil society, private sector, and bilateral and multilateral institutions. All of them must work -according to Wolfensohn- as partners for progress in each and every country.
In the same sense, Stiglitz observes that in the last twenty years the World Bank has been having problems to implement changes owing to the various political cultures of the receiving countries. Hence, the success of these changes shows up when there is a genuine dialogue among local professionals and specialists of multilateral organizations:
"The mark of our success in capacity building over the past couple of decades is that there is a cadre of well trained professionals who are willing and able to engage in meaningful dialogue on issues of economic policy within most of the developing countries. They bring a local knowledge that even someone who has lived a year or two in a country cannot match -let alone someone flying in for a three week mission. To be sure, they may lack the cross-country experience that an outside adviser can bring, and it is from the marriage of these two knowledge bases that the most fruitful lessons can be drawn" (36).
The Washington Consensus in Russia and the EU
Other economic and political contexts have revealed that a lack of "cadres of well trained professionals willing to dialogue" can produce disastrous results. The case of Russia is quoted as an example of "historical simplicity and ignorance which sometimes the Washington Consensus is upheld with" (37):
"Now nobody denies that the project -supported by North American Administration and displayed in the IMF packing- of turning Russia, in a few years, into a modern market economy based eventually on the model of Anglo-Saxon capitalism, has dramatically and spectacularly failed: the IMF payed out $26.000 million in the last six years, not just with no positive visible result but with an absolutely negative visible result: the Russian GNP today must be 50% what it was in 1991..." (38).
This fantastic swindle of the Russian leaders (a swindle to the "Americans", but also to multilateral organizations and above all to the Russian people) was possible due to the historical want of knowledge on the part of some North Americans with regard to realities beyond their boundaries. Paul Krugman ironically says:
"... what happens basically is that we North Americans think that the rest of the world does not exist. And so we find it hard to take seriously the existence of the rest of the world. Do not laugh, oh, don’t: I mean it. Ours is a great country with a dominant language, with a ruling culture, and so we have trouble paying attention to what is going on outside" (39).
On the other hand, in Part II ("The formulations of the Washington Consensus") it was pointed out that the economic policies of the Maastricht Treaty are, according to some, an adaptation of the Washington Consensus to the European Union (EU). It would take long to argue about the wisdom of these policies; but one observes that they were established at a moment -the beginning of the 90s- when liberal thought was very strong and this fact determined their contents. For example, the only objective of the Central European Bank is -according to Maastricht- to watch over prices stability; whereas the Federal Reserve of the USA includes also the objective of promoting occupation. Some economists consider this difference important when it comes to understanding why the European rate of unemployement is higher than the American rate (40).
Besides, the rate of growth in public deficit and public debt as demanded from the community of nations to join the Economic and Monetary Union has been criticized as arbitrary in part (41). This rate, does it not respond to the dictates of the most influential German politicians and academicians influenced, indeed, by the nation’s financiers and industrialists and by reminiscense of overinflation periods between wars?
At all events, when it comes to judge of the application of the Washington Consensus to Europe one realizes that the institutional analysis is important; and also that equity matters -specifically the problem of unemployment- fall behind when they should be in the forefront.
V. Conclusions
After the fall of real socialism the thought that the Consensus was important when implementing economic policies gathered strength; and the attempt was made to formulate this Consensus so that it may become the economic paradigm of post-socialism. The Washington Consensus as formulated and baptized by John Williamson was meant to be this paradigm. The most important coordinations of this Consensus have been reported here and the inadequacy of its contents as well as the formulating method have been questioned. Finally, the policies put forward by the Washington Consensus have been contrasted with the performance of economies in the 90s while paying special attention to developing economies. The lessons drawn in this process seem to be the following:
First of all, in spite of the shortcomings in the contents and method of the Consensus, an agreement on certain economic policies is possible when promoting a sound macroeconomic framework for the performance and development of economies. These policies can help towards
-encouraging "stability culture", so important to the promotion of trade and international investments.
-restraining corrupt local politicians while providing "political sustainability" (Stiglitz) in the process of economic reform;
-readjusting public expenditure from non-productive expenditure to health care and education.
But in the second place, let us bring out some theoretical problems deriving from Williamson’s specific attempt to come to that desirable agreement. These problems originate in the lack of precision of the word "Washington" as a group of institutions in support of the Consensus; in the doubtful impartiality of these institutions; and from the lack of accuracy for the specific policies on which an agreement has been reached.
A second block of problems has to do with the idea of "positivity" handled by Williamson, especially in the 1990 version of the Consensus: in fact, the need of an agreement on any policy is determinant to its inclusion in the "Consensus". Although the second formulation of the Consensus takes into account matters on which an agreement has not been reached because of the presence of opposed assessments, however, the policies deriving from the Consensus have practically excluded all corrections from the problem of inequality: a chronic problem in Latin America, for example.
A third block of theoretic problems has to do with the presence of a political-economic-academic phenomenon similar to a "speculative bubble" (Krugman): when governments of developing countries applied packs of IMF policies, stock markets invested in them and this phenomenon reinforced the Consensus and the prospects in the short term; but in the medium term real economies did not improve and so the bubble burst.
In the third place, there are also problems of implementation of policies deriving from the Consensus. If policies are applied in bulk and not very cautiously when adjusting each policy to the reality of the country and when foreseeing the coherence of the whole of the policies, then the Washington Consensus becomes an ideology which is what one wants to avoid just when going in for "useful discussions" is possible (Fernández Ordóñez). Therefore the "key actors" (Wolfensohn) in every country as well as the "marriage ties" (Stiglitz) among the officials of international organizations and the local professionals with a good training and availability should be taken into account. If this is not done, there will be "swindling" as in the case of the Russian élite in the IMF; and having to pay dearly for it will be the ending of the poorest sectors in every country... no matter how much the fight against poverty be the "a priori" object of the IMF policies (42).
Let us bear in mind that these wicked effects will occur regardless of the rate of good will in international institutions: the appropriate application of economic policies is a question beyond good or bad intentions. It has to do with the verification that "the rest of the world exists" (Krugman) and it works by means of non-reducible diagrams different than those in the academic, economic and political world of "Washington".
Even taking the good faith of "Washington" for granted, it seems that one can reasonably suspect that some interests are not very clear when policies of economic reform put so little practical emphasis on the protection of market competitiveness. The biassed applications of policy packs show interests not quite unselfish and they end up by producing wicked effects... especially on the most unprotected sectors of society.
At heart, going back to the question of the existance or not of a sole economic paradigm for post-socialism, I am of the opinion that there are several capitalisms; and this diversity exists on account of the physical, institutional and cultural characteristics of the country at issue. The "Washington Consensus" responds to a specific type of capitalism because of its theoretic formulation and the institutional network trying to implement it. And it pretended to prevail as the only form of economic organization. That is why it must be completed or adapted by each and every "Santiago Consensus" as needed, unless we want it to fall into an ideology or to cause wicked effects (43).
Finally, an open question stays: whether global capitalism in progress for the last few years will let these various desirable capitalisms exist, or the Anglo-Saxon model of capitalism -which has a certain "disdain with regard to equity matters"- will eventually prevail (Williamson). Just because it is dependent on people and institutions I believe that capitalism can still be diverse and keep moving in line with a greater equity. This believe, however, will call for the work from a lot of people and institutions in the first years of the new millennium.
Josep F. Mària i Serrano, S.J.
Member of the team "Cristianisme i Justícia"
Professor of ESADE.
NOTES
(1) cf. GUITIAN, M. MUNS, J. "La cultura de l’estabilitat i el consens de Washington" in GUITIAN, M. MUNS, J. (ed.) La cultura de l’estabilitat i el consens de Washington Servei d’estudis de La Caixa, Barcelona 1999, 18-19. In this sense Williamson thinks that a handful of lucid norms can help towards restraining problems derived from the following "political cycle": "The norms which cause public aid to be the exception rather than the rule, and wich require help to be lucid and to be based on accepted principles, will clip the wings of those politicians whose main objective is to get rich rather than to foster some sort of common good worth being represented in an action of acceptable social welfare". "Democracy and the Washington Consensus" in GUITIAN, M. MUNS, J. (ed.) op.cit. 121.
(2) KRUGMAN, P. "Les tulipes holandeses i els mercats emergents" (1995) in GUITIAN, M. MUNS, J. op.cit. 151-152.
(3) "If one attends just to the top people responsible for this policy [the one of IMF and the USA], one realizes where their interests come from: the Secretary of the American Treasury, Robert Rubin, comes from Wall Street like the previous secretaries, Roger C. Altman and Nicholas Brady under Bush Administration. All of them are now working in investment Companies. Ernest Stern, former President of the WB, is J.P. Morgan’s Director, just as the present Director -James Wolfensohn- worked previously in an investments Bank" BHAGWATI, J. "The IMF must pay for its mistakes in the crisis" El País. Negocios 11-10-98. And yet, Wolfensohn’s position has changed substantially in the last few years, as we shall see later on.
(4) Cf. FERNANDEZ ORDOÑEZ, M.A. "La convergència en les idees sobre política econòmica: de l’enfrontament al consens" in GUITIAN, M. MUNS, J. (ed.) op.cit. 146.
(6) A writing wholly reproduced in GUITIAN, M. MUNS, J. (ed.) op.cit. 67-79.
(7) Cf. WILLIAMSON, J. "El que Washington vol dir..." (1990) op.cit. 68.
(8) Cf. GUITIAN, M. MUNS, J. "La cultura de l’estabilitat..." op.cit. 14.
(11) Also wholly reproduced in GUITIAN, M. MUNS, J. (ed.) La cultura de l’estabilitat..., 118-138.
(12) Cf. "La democràcia i el consens..." (1990) op.cit. 126.
(13) Op.cit. 19-22; and the document of the IMF reproduced in pages 23-34.
(14) Cf. ARGANDOÑA, A. "L’evolució de la "cultura de l’estabilitat" a Espanya" GUITIAN, M. MUNS, J. (ed.) op.cit. 217.
(17) Under "the leftist" viewpoint, some issues are recorded relating to priorities in public expenditure, taxation reform or financial liberalization. And in those issues Williamson presents the relation between efficiency and equity like a relation of replacement; but a more egalitarian distribution is often to the advantage of an increment of efficiency.
(19) Cf. commentary by S. Fischer in GUITIAN, M. MUNS, J. op.cit. 94.
(20) Cf. "La democràcia i el consens..." (1993) 120, note 3.
(24) Various conceptions regarding what is "positive" mingle here. Not pretending to enter into distinctions, we believe that what is "positive" in economic policy cannot ignore flagrant economic realities (inequality in Latin America). One way or the other, it is the economic reality of this continent what can give us the clue to whether the list derived from the "Washington Consensus" is or is not wise. This is what I am going to deal with next.
(27) Fernandez Ordoñez wrote: "A stable macroeconomic frame is not enough, nor an adequate frame of competitiveness, nor a State fashioned in the way described, but all the elements of the model must be applied together" (Fernandez Ordoñez 142-143).
(28) GUITIAN, M. MUNS, J. (ed.) op.cit. 97. The quotation is from Stanley Fischer.
(29) The Greek "phronesis" (prudence) is the virtue which hinders the vision of reality from being confused by one’s own interests.
(30) "Ideology", inasmuch as "positive", is a polysemic term. In this context it suits us to define it as the antonym of "prudence" (see previous note); or in the words of J. Muns: for him an ideologist is "...someone who knows the answer before having payed attention to the context of the problem" (113, note (*)). Colin Bradford, when arguing about "What Washington means ...", already warns about the danger of the "Washington Consensus" or the "universal convergence" becoming an "ideology" liable to generate a rejection of the global pack of policies proposed by the IMF. (Cf. GUITIAN, M. MUNS, J. (ed.) op.cit. 113-114).
(31) "Knowledge for Development: Economic Science, Economic Policy, and Economic Advice" THE WORLD BANK Annual World Bank Conference on Development Economics 1998-Washington 1999, 9-10.
(33) "Commercial privatization and liberalization should often be used as a means of obtaining these objectives [a strong definition of property rights and a strong competitiveness], but we must not forget that complementary reforms may be necessary. Turning the public monopoly into a private one, for example, is not quite liable to create a more dynamic market economy" Ibidem, 10.
(34) "Rethinking Development - Principles, Approaches, and Projects" THE WORLD BANK op.cit. 60.
(37) LINDE,L.M. "El ‘consenso de Washington’ y la economía global" Revista de libros marzo 1999, 5.
(39) ESTAPE TOUS,M. "Entrevista a Paul Krugman" La Vanguardia. Economía y negocios 11-9-99, 8.
(40) This is the opinion of O. Lafontaine and C. Müller who have pleaded for the political control of the CEB. See LAFONTAINE, O. MÜLLER, C. No hay que tener miedo a la globalización Biblioteca Nueva, Madrid 1998 and REIERMANN, C. "Attacke vom Hunnenkönig" Der Spiegel 2-XI-98, 128-130.
(41) This is, for example, the opinion of Paul Krugman (cf. ESTAPE TOUS, M. op.cit.)
(42) We observe that international organizations can do very little if these competent and honest local professionals are wanting in the countries, or if the private sector or civil society obstructs or corrupts certain policies. But verifying these limits is a first step towards finding more fitting solutions. The challenge of training professionals and instilling attitudes in civil society or in the private sector depends also on the people and the governments of developing countries.
(43) "Gray holds that a social and economic organization based on private property and the market -just what we call "capitalism"- should not be the same everywhere nor in the various cultures; and that attempting to lay just one model -made in the image and after the likeness of the one supported by the new Anglo-Saxon right wing- in the long run could bring about as acute a disaster as the very same ‘real socialism’". LINDE, L. M.op.cit. 5.
