19 The Washington Consensus as Transnational Policy Paradigm: Its Origins, Trajectory and Likely Successor (2012)

Sarah Babb

Twenty years ago, the Washington Consensus was both widely blamed and widely commended for its role in the market revolution that was sweeping across the developing world. Under its influence, developing countries’ governments privatized state-owned industries, removed trade barriers and generally moved towards decreased reliance on state intervention in their economies (Williamson, 1990a, 1990b; Williamson, 1994). Today, however, a group of powerful emerging-market governments, organized within the Inter-governmental Group of 20 (G-20) and sometimes associated with the so-called BRICS countries (Brazil, Russia, India, China and South Africa), are endorsing more interventionist visions of how to empower developing economies. As Deutsche Bank analyst Markus Jaeger observed at the end of 2010, ‘[T]here is no denying that the “Beijing consensus” and its cousins in Brasilia, Moscow and New Delhi have thrown down the gauntlet to the … “Washington consensus”’ (Jaeger, 2010: 2).

What happened to the once-powerful Washington Consensus – and what seems to be taking its place? This article seeks to answer these questions through a historical excavation of the origins, nature and trajectory of the Washington Consensus. It draws on secondary literature on the Consensus and related topics, as well as some of my own research on the International Monetary Fund (IMF) ...

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