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Original Articles

Fads and fashion in economic reforms: Washington Consensus or Washington Confusion?

Pages 505-528 | Published online: 25 Aug 2010

References

  • Williamson , John . 1993 . 'Democracy and the Washington Consensus' . World Development , 21 (8) : 1331
  • Lipton , David and Sachs , Jeffrey . 1990 . 'Creating a market economy: the case of Poland' . Brookings Papers on Economic Activity , 1 : 75 – 147 .
  • Istvan , Abel and Bonin , John . 1992 . “ 'The "Big Bang" versus "slow but steady", a comparison of the Hungarian and Polish transformations' ” . CEPR Discussion Paper No 626 London
  • Portes , Richard . 'Transformation traps'' . Economic Journal , 104 (426) 1178 – 1189 .
  • Wyplosz , Charles . 1999 . 'Ten years of transformation: macroeconomic lessons' and Joseph Stiglitz 'Whither reform: ten years of transition'' . papers presented at the Annual World Bank Conference on Development Economics . April 28-30 1999 , Washington, DC . Recent examples of the two contrasting arguments are
  • Lloyd , John . 1999 . 'Who lost Russia?' . The New York Times Magazine , 15 August For a journalistic interpretation of the debate, see
  • 1999 . Foreign Policy Magazine , Fall
  • 1999 . Financial Times , 22, 27, 28 September
  • Williamson . “ 'Democracy and the Washington Consensus' ” . 1332 – 1333 .
  • Williamson , John . 1999 . 'What should the Bank think about the Washington Consensus' . paper presented at the World Bank's PREM meetings . July 1999 . pp. 3 (mimeo)
  • Ibid.
  • Edwards , Sebastian and Naim , Moises , eds. 1997 . Mexico 1994: Anatomy of an Emerging-Market Crash , Washington, DC : The Carnegie Endowment . In 1995 President Ernesto Zedillo said in a press conference; 'What we say is very simple: Mexico's economic crisis is a product of our country's domestic savings crisis' (FBIS-LAT-95-158, 16 August 1995). This was a conclusion echoed by the post-mortem reports on the crisis issued by the IMF, The World Bank, the IDB and most academic writers and journalists who reported on the issue. See
  • Furtado , Celso . 1963 . Development and Stagnation in Latin America: A Structural Approach , New Haven , CT : Yale University Press . A classic statement of this view is
  • Sunkel , Osvaldo . 1967 . 'El transfondo estructural de los problemas del subdesarrollo Latinoamericano' . El Trimestre Economico , 34 : 11 – 58 . For one of the early summaries of 'structuralist' analysis, see
  • Prebish , Raul . 1984 . “ 'Five stages in my thinking on development' ” . In Pioneers in Development , Edited by: Meier , G and Seers , D. Washington, DC : World Bank . See also
  • Kahler , Miles . 1990 . “ 'Orthodoxy and its alternatives: explaining approaches to stabilization and adjustment' ” . In Economic Crisis and Policy Choice , Edited by: Nelson , Joan M . 33 – 61 . Princeton , NJ : Princeton University Press .
  • Bauer , P T . 1984 . Reality and Rhetoric: Studies in the Economics of Development , 19 – 20 . Cambridge , MA : Harvard University Press .
  • Naim , Moises . 1994 . 'Latin America: the second stage of reform' . Journal of Democracy , 5 (4) : 32 – 48 .
  • World Bank . 1999 . Global Economic Prospects 1988-1999 , Washington, DC : World Bank .
  • Naim , Moises . 1993 . Paper Tigers and Minotaurs: The Politics of Venezuela's Economic Reforms , 119 Washington, DC : The Carnegie Endowment .
  • North , Douglass C . 1990 . Institutions, Institutional Change and Economic Performance , Cambridge : Cambridge University Press .
  • Williamson , Oliver . 1975 . Markets and Hierarchies , New York : The Free Press .
  • Williamson . 1985 . The Economic Institutions of Capitalism , New York : The Free Press .
  • Hirschman , Albert O . 1981 . Essays in Trespassing , Cambridge : Cambridge University Press .
  • Evans , Peter . 1992 . “ 'The state as problem and solution: predation, embedded autonomy and structural change' ” . In The Politics of Economic Adjustment , Edited by: Haggard , S and Kaufmann , R . Princeton , NJ : Princeton University Press .
  • Journal of Democracy , 5 (4) 32 – 48 . I first called attention to these two stages of market reforms in my 1993 book Paper Tigers and Minotaurs, p. 142ff and then extended the analysis in a 1994 article in the
  • 1995 . Latin America's Journey to the Market: From Economic Shocks to Institutional Therapy , San Francisco , CA : International Center for Economic Growth . See Table 1 for charts comparing the content, characteristics and the politics of the two stages. Reforms in the second stage are also often referred to as 'second generation reforms'
  • Graham , Carol and Naim , Moises . 1998 . “ 'The political economy of institutional reform in Latin America' ” . In Beyond Trade-Offs: Market Reforms and Equitable Growth in Latin America , Edited by: Birdsall , Nancy , Graham , Carol and Sabot , Richard . Washington, DC : The Brookings Institution .
  • Acuna , Carlos and Tomassi , Mariano . 1999 . “ 'Some reflections on the institutional reforms required from Latin America' ” . Buenos Aires : CEDI . In some instances the advice about institutional reform may have even been counterproductive. During the early and mid-1990s it became fashionable to prescribe the decentralisation of public services as a remedy for poor performance. Some of the experiences with this approach show that decentralisation has lowered even more the quality and availability of public services while also creating grave fiscal distortions. In some countries, raising the admittedly low public salaries as a means to increase the quality of the public sector has backfired, as the higher salaries made it harder and more costly to dismiss poorly performing employees, while not being high enough to attract the needed talent or curb corruption. See
  • Sachs , Jeffrey . 1999 . 'Creditor panics: causes and remedies' . Cato Journal , 18 (3) : 377 – 390 . Turkey, Venezuela, Argentina, Mexico, Indonesia, South Korea, Malaysia, Philippines, Thailand, Russia and Brazil. See
  • 1999 . 'Asia and the dollar' . The International Economy , January-February : 18 – 23 . For a typical example of the strikingly different advice leading experts offered Asian countries, see
  • 1999 . 'Should there be five currencies or one hundred and five? . Foreign Policy , 116 Fall : 65 – 79 . Ricardo Hausmann offers an overview of the different positions of a group of respected academic economists in
  • Blinder , Alan . 1999 . 'Eight steps to a new financial order' . Foreign Affairs , September-October : 57
  • Krugman , Paul . 1998 . 'saving Asia: it's time to get RADICAL' . Fortune , 7 September
  • Krugman . 1999 . The Return of Depression Economics , 145 – 146 . New York : W W Norton .
  • Council on Foreign Relations . 1999 . Safeguarding Prosperity in a Global Financial System: The Future International Financial Architecture , New York : CFR .
  • Edwards , Sebastian . 1998 . 'Barking up the wrong tree' . Financial Times , 7 October
  • Eichengreen , Barry and Mussa , Michael . 1998 . Capital Account Liberalization , Washington, DC : IMF .
  • 1997 . World Bank News , 6 November : 5
  • 1998 . Financial Times , 3 December
  • 1998 . The Economist , 12 September : 24
  • 1998 . 'The confidence game' . New Republic , 5 October
  • 1998 . 'Meltdown post-mortem: rude surprises, valuable lessons and dumb ideas in the aftermath of the Asian crisis' . The International Economy , November-December : 70
  • IMF . 1999 . International Capital Markets: Development, Prospects and Policy Issues Washington, DC
  • Biecker , Robert A . 1999 . Taming Global Finance , Washington, DC : Economic Policy Institute . These categories are from forthcoming, ch. 3
  • Birdsall , Nancy . 1998 . 'Life is unfair: inequality in the world' . Foreign Policy , 111
  • 21 January 1999 . “ 'A proposal for a comprehensive development framework' ” . 21 January , www.worldbank.org
  • Hirschman , Albert O . 1981 . “ 'The rise and decline of development economics' ” . In Essays in Trespassing , Edited by: Hirschman . Cambridge : Cambridge University Press .
  • Kapur , D , Lewis , J and Webb , R . 1997 . The World Bank: Its First Half Century , Vol 2 , 523 – 610 . Washington, DC : The Brookings Institution .
  • Sen , Amartya and Wolfensohn , James D . 1999 . 'Let's respect both sides of the development coin' . International Herald Tribune , 5 May

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