washington consensus

The Washington Consensus refers to a set of ten economic policy prescriptions that were considered to be fundamental for developing countries, particularly in Latin America, during the late 20th century. The term was coined in 1989 by John Williamson, an economist, who articulated these policy recommendations as a standard reform package to be promoted by international financial institutions like the International Monetary Fund (IMF) and the World Bank. 

The ten components of the Washington Consensus are:

**Fiscal Discipline**: Maintaining a sustainable fiscal policy to avoid large deficits.
**Public Expenditure Priorities**: Shifting public spending from non-essential areas to essential services such as education, health, and infrastructure.
**Tax Reform**: Broadening the tax base and adopting moderate tax rates to increase revenue without discouraging investment.
**Liberalized Trade**: Reducing trade barriers and promoting free trade to encourage competition and economic growth.
**Foreign Direct Investment (FDI)**: Encouraging FDI by providing a stable and attractive environment for investors.
**Privatization**: Privatizing state-owned enterprises to enhance efficiency and promote competition.
**Deregulation**: Reducing regulations on businesses to foster a more competitive and dynamic economy.
**Secure Property Rights**: Enhancing legal protections for property rights to encourage investment and economic activity.
**Financial Sector Reform**: Developing a stable financial system with competitive markets and regulatory frameworks.
**Market-Determined Exchange Rates**: Allowing currency values to be determined by market forces rather than fixed exchange rates.

While the Washington Consensus was influential in shaping economic policies in various countries, it has also faced criticism. Critics argue that it often led to social dislocation and increased inequality, and some of the policies were seen as overly prescriptive and not accounting for the specific contexts of individual countries. In response to these criticisms, a broader set of policy frameworks, often referred to as the "Post-Washington Consensus," has emerged, emphasizing more significant roles for social considerations, institutional development, and inclusive economic growth.