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Unformatted text preview: The Co-Evolution of the Washington Consensus and the Economic Development Discourse By Ravi Kanbur * www.people.cornell.edu/pages/sk145 Draft August 14, 2008 Contents 1. Introduction 2. Washington Consensus—Mutation of Meanings 3. The Economic Development Discourse since the Second World War 4. A New Consensus? 5. Conclusion References Abstract In this paper I give an account of development debates of the past two decades, focusing on the Washington Consensus and on the broader economic development discourse in historical context. Section 2 gives a basic account of the Washington consensus and how its meaning changed from the original formulation. Section 3 presents the evolution of the economic development discourse since the second- world-war, through the 1980s, up to the present. Section 4 asks if there is now a new consensus on economic development, in light of the recent report of the Commission on Growth and Development. Section 5 concludes. * Cornell University: T.H. Lee Professor of World Affairs, International Professor of Applied Economics and Management, and Professor of Economics. Paper prepared for the 2008 Macalester International Round Table, Macalester College, St. Paul, Minnesota, October 2-4, 2008. 1 1. Introduction The 1980s were a hell of a decade. They began with the reverberations of the second OPEC oil shock. They ended with the fall of the Berlin wall. In between, we had the Reagan-Thatcher-Kohl economic policy era in North America and Europe, the Volcker interest rate shock, the Latin American debt crisis, collapse in Africa, the start of rapid growth in China and in India, and on and on. Oh, and by the way, in 1989 John Williamson coined the term “Washington Consensus.” 1 The intellectual history of this term over the past two decades is intimately tied in with the economic history of this period, just as its origins were tied to the economic history of the 1980s. But the term and its meanings have also interacted with a broader discourse on economic development—in particular, how government policies and interventions can help or harm development. In fact, the Washington Consensus, the development discourse, and actual economic policy and outcomes, have all co- evolved over the past twenty years, each influencing and being influenced by the others. The 1990s and 2000s have been no less interesting and eventful than the 1980s, including: an acceleration in global integration in trade and financial flows, “shock therapy” in the formerly communist countries, the East Asian financial crisis, rapid growth in a number of Asian countries and spectacular growth in China with perhaps the most dramatic reduction in income poverty in history, sharp increases in inequality in rapidly growing countries, and so on....
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This note was uploaded on 09/26/2011 for the course ECONOMICS 1291 taught by Professor Sasami during the Spring '11 term at Aarhus Universitet.
- Spring '11