basically, the washington consensus is the name for a set of economic policies that came out of washington, d.c., in the late 1980s. picture this: latin american countries were dealing with debt crises, inflation through the roof, and overall economic chaos. so, economists from places like the imf, world bank, and the u.s. treasury got together and said, "alright, here's the game plan to fix this."
the game plan boiled down to about ten policies, stuff like:
- cut government spending
- open up to international trade
- privatize state-owned companies
- encourage foreign investment
- deregulate industries
- keep taxes simpler and broader
the thinking was, if you let markets work freely, economies would stabilize and grow. in theory, it makes sense. in practice? mixed results.
some countries saw short-term growth and lower inflation. others ended up with higher unemployment, growing inequality, and economies that were basically built for foreign investors rather than local people. it often felt like the medicine was worse than the disease, especially when governments slashed spending on healthcare and education just to balance their books.
the name itself came from an economist named john williamson, who wrote it down as more of an observation than a commandment, but it took off because it perfectly described the economic "starter pack" washington was pushing at the time.
today, people use the term either as a neutral description of free-market reform or, more often, as a critique of globalization and how rich countries try to shape poorer ones in their image. if you ever hear someone complain about "neoliberalism," they're probably talking about some version of the washington consensus.
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