onomi       e orms        6.3
     interventions in the economy. These governments               help the Euro-American countries to mitigate the
     were also suggested to take measures which could              crisis. The favour for the state intervention in the
     boost the aggregate demand in the economy (i.e.,              economy was being reversed by the Washington
     macroeconomic stability measures). The broad                  Consensus. But soon this consensus was also to be
     outlines of such a development strategy were                  replaced by another development strategy. More
     regarded as being inspired by the Washington                  detailed discussion on the Washington Concensus
     Consensus.2                                                   is given in Chapter 1.
          This consensus is broadly termed as the popular
     meaning of the ‘economic reform’ followed by                  3. mixeD economy
     almost all the socialist, communist and planned               By the mid-1990s, it had become increasingly clear
     developing economies during the 1980s in one                  that neither of the extremes—the Washington
     form or the other3—the term economic reform got               Consensus or the state-led planned economy—
     currency around the world during this period. The             were the ultimate strategies of development.5 The
     term was usually seen as a corollary for promoting            success achieved by the East Asian economies even
     ‘naked capitalism’, openness in the economy and               if we take into account their setback due to the
     an open attitude towards foreign investments, etc.            financial crisis of 1997–98, stands out in marked
     The governments of the developing economies                   contrast to the experiences of other economies
     were criticised by the political parties in the               of the time who were following the Washington
     opposition and the critiques for being soft to the            Concensus.6 The East Asian economies have not
     dictates of the IMF and the WB, and becoming a                only been able to propel higher growth rates,
     party to promote ‘neo-imperialism’.                           but they have been greatly successful in reducing
          But these policies, in many cases proved little          poverty, promoting education and healthcare, etc.
     better than the previous policies in promoting                      The East Asian economies had promoted
     economic growth over an extended period of time.              a development strategy, which had its most
     But somehow a mood in favour of the market                    distinctive feature as the balance they were
     economy had gained ground. The United Kindom                  able to strike between the role of the state/
     under Mrs. Thatcher had gone for politically most             government and the market/the private sector
     vocal privatisation moves without any political
                                                                   in their economies. This was really a new kind of
     debates (the only such example of privatisation
                                                                   mixed economy, which was never permanently
     moves among the democracies, till date).4 It should
                                                                   inclined towards either state intervention or the
     be noted here that after the Great Depression of
                                                                   free market, but always a balanced mix of the state
     1929 a ‘strong state intervention’ was suggested
                                                                   and the market according to the requirement of
     (by J. M. Keynes) and such a policy did really
                                                                   the socio-economic situation of the economy.
        2.  As the strategy was advocated by the IMF, the WB       The East Asian countries had pursued market-
            and the US Treasury (i.e., US Ministry of Finance) all oriented policies that encouraged development
            located in Washington, it properly came to be known
            as Washington Consensus.                               of the private sector—augmenting and governing
        3.  Without changing the broad contours of economic        the market, not replacing it.7
            policy, the Government in India had also come, under
            the in uence of this consensus, followed a great many      5.  World Bank, The East Asian Miracle: Economic
            liberal policies (during Rajiv Gandhi’s regime) in the         Growth and Public Policy. (Washington DC: Oxford
            1980s.                                                         University Press, 1993).
        4.  Collins Dictionary of Economics, Glasgow, 2006,            6.  Ibid.
            pp. 417–18.                                                7.  As is concluded by Stiglitz and Walsh, p. 800, op. cit.