The Policy Instruments And The International Monetary Fund

Consensus, general agreement among policymakers and scholars, is a difficult task to achieve; however, John Williamson in 1990 claimed that Washington based institutions such as the United States Government, think tanks, and the International Monetary Fund had formed a general consensus regarding economic development polices in Latin America (Williamson 1990). He outlined a framework and described ten policy instruments that policymakers agreed were necessary to aid developing countries. The ten reforms that he mentioned included: fiscal discipline, public expenditures focused on health, education, infrastructure, tax reform, liberalized interest rates, competitive exchange rates, free trade policies, privatization, liberalization of†¦show more content†¦However, I will maintain that the Washington Consensus is the combination of neoliberal policy preferences, which essentially is the â€Å"harnessing the power of markets† which was implemented by international finan cial institutions during the 1980s and 1990s (Birdsall 2010 pp.6 ). Additionally, to measure the success of the consensus it is proper to measure the economic growth and the poverty rates in the region of Latin America because this is the same region Williamson first noticed the Washington Consensus. In short, while the Washington Consensus may not be used in the same manner as Williamson intended it to be, the Consensus has failed to help developing economies grow — measured by GDP growth— and hasn’t reduced poverty. It is safe to say there is no longer a consensus among development policies; however, certain policy preferences and the end goal— integration in the global economy— will still be found in the next consensus regarding economic development (Nankani 2005 pp. xii). Additionally, from a theoretical level, the Consensus has failed to recognize the diverse problems of each nation-state, and various other factors such as the lack of insti tution building. The Case Against the Washington Consensus While there is plenty of scholarly debate and discourse regarding the correct definition of the