1.12 ndian onom
high economic returns and the potential John Williamson9, says that audiences the world
to improve income distribution, such as over seem to believe that this signifies a set of neo-
primary health care, primary education, liberal policies that have been imposed on hapless
and infrastructure. countries by the Washington-based international
(iii) Tax reform (to lower marginal rates and financial institutions and have led them to crisis
and misery—there are people who cannot utter
broaden the tax base)
the term without foaming at the mouth. He
(iv) Interest rate liberalisation further adds that many people feel that it gives
(v) A competitive exchange rate the impression that the points outlined represent a
(vi) Trade liberalisation set of rules imposed on developing nations by the
(vii) Liberalisation of FDI inflows United States. Instead, Williamson always felt that
the prescription represented a consensus precisely
(viii) Privatisation
because they were so universal. Many proponents
(ix) Deregulation (in the sense of abolishing of the plan do not feel that it represents the hard-
barriers to entry and exit) line neo-liberal agenda that anti-free-trade activists
(x) Secure property rights say it does. They instead present it as a relatively
However, in coming times, the term became conservative assessment of what policies can help
synonymous to neo-liberalism (in Latin America), bring a country to economic stability.
market fundamentalism (as George Soros told in But the policy prescription led to processes
1998) and even globalisation across the world. It which are known as Liberalisation, Privatisation,
has often been used to describe an extreme and Globalisation, thus cutting down the role of the
dogmatic commitment to the belief that markets State in the economy—more so in the nations
can handle everything. which got developmental funding from the WB
or went to the IMF in times of the Balance of
But the reality has been different—the set of
Payment crises (as in the case of India which
polices was already being recommended by the
commenced its reform process in 1991 under the
IMF (International Monetary Fund) and the WB ‘conditions’ of the IMF). It was as if the Adam
(World Bank) together with the US Treasury, Smith’s prescription of ‘free market’ (liberalism)
especially during the period of the eighties and has taken its rebirth (in neo-liberalism).
early nineties.8 The prescription was originally Many scholars believe today that the recent
intended to address the real problems occurring financial crises of the US and the European
in Latin America at the time, and their use nations are somehow born out of the ideas rooted
later to handle a wide array of other situations in the Consensus. In the aftermath of the Great
has been criticised even by original proponents Recession (after the ‘US sub-prime’ crisis) in the
of the policies. The name of the Washington Western economies, it is believed that dependence
Consensus has often been mentioned as being on market to correct the growth and development
somewhat unfortunate, especially by its creator. may not sustain any longer—and the world might
agree in favour of a development state, as in the case
8. Stiglitz, J. E., Initiative for Policy Dialogue, a paper
presented at the conference From the Washington of the East Asian nations which never went for the
Consensus towards a new Global Governance,
Barcelona, September 2004. The conference was 9. Williamson, J., Did the Washington Consensus Fail?,
sponsored by the Ford Foundation, the MacArthur Institute for International Economics, Washington DC,
Foundation, and the Mott Foundation. 2002.