The Washington Consensus and the Establishment of the (Neo) Liberal Creed

The conception of “Washington Consensus”, emerge in the international economy in recent years. Williamson John, this term inventor, claimed, that now this term is causing wide confusion, and the meaning isn`t that, which he at the start, invented. Conception original meaning is summary of lowest common denominator of policy advice addressed by the Washington based institutions (for example World Bank) to Latin American countries as of 1989., and the use of the term signify neoliberal or market – fundamentalist policies. Now term is used as a synonym for what is often called “neoliberalism” in Latin America, or what Geeorge Soros has called “market fundamentalism”. The original version of “Washington Consensus” argued, that the set of policy reforms most of official Washington thought would be good for Latin American countries, and those sets, proposition were: fiscal discipline, a redirection of public expenditure priorities toward fields offering both high economic returns and the potential to improve income distribution, such as primary health care, primary education, and infrastructure, tax reform (to lower marginal rates and broaden the tax base), interest rate liberalization, a competitive exchange rate, trade liberalization, liberalization of FDI inflows, privatization, deregulation (in the sense of abolishing barriers to entry and exit), secure property rights. This was like a keystone for economic reformation. About those propositions – Washington Consensus elements, some were widely accepted, some didn’t show good results. Williamson by his self has some doubts about some of those elements, expressed before in Washington Consensus. The main meaning of Washington Consensus, was, that this conception led to belief- markets can handle everything. Such belief created concern. When Williamson looked back on Washington Consensus, he emphasize, that in his version, Washington Consensus can be seen as an attempt to summarize the policies that were widely viewed as supportive of development at the end of the two decades when economists had become convinced that key to rapid economic development lay not in a country`s natural resources or even in its physical or human capital, but, rather, in the set of economic policies that it pursued. And this consensus is valid for all places and at all time in the practice, but theoretical must be different situation.