“Washington Consensus”
• The “Washington Consensus,” a term coined by John
Williamson, is intended to represent the policy advice offered
by the World Bank, IMF, and US government (all located in
Washington, DC.)
• The “Washington Consensus” is closely associated with the
market-led theory of economic development.
• Hence the “Washington Consensus” emphasizes
• Private property rights
• Market prices (including interest rates)
• Economic openness
• (free trade and openness to direct foreign investment)
• Macroeconomic stability
• Critics charge that the “Washington Consensus” ignores the
active state role in the most successful late developing
countries.
“Beijing Consensus”
• The term “Beijing Consensus” was coined by Joshua Ramo to represent
an alternative set of policy prescriptions to the “Washington Consensus.”
• “It replaces the widely-discredited Washington Consensus, an economic theory
made famous in the 1990s for its prescriptive, Washington-knows-best approach to
telling other nations how to run themselves. The Washington Consensus was a
hallmark of end-of-history arrogance; it left a trail of destroyed economies and bad
feelings around the globe. China’s new development approach is driven by a desire
to have equitable, peaceful high-quality growth; critically speaking, it turns traditional
ideas like privatisation and free trade on their heads (Ramos 2004).”
• The Beijing Consensus is commonly associated with the state-led theory
of economic development.
• The “Beijing Consensus” emphasizes that there is no one right answer to
• Forms of property rights
• Reliance on market prices
• Degree and timing of economic openness
• Critics charge that the “Beijing Consensus” ignores the extent to which
the Chinese state has gradually introduced non-state (private and
foreign) ownership, market prices, and freer trade albeit combined with
an active state role in economic development.