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.