The Consensus Evolves

in Behind the Development Banks

Published by University of Chicago Press

Published in print June 2009 | ISBN: 9780226033648
Published online March 2013 | e-ISBN: 9780226033679 | DOI:
The Consensus Evolves

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This chapter investigates the political and intellectual trends in the 1990s that contributed to the erosion of the original Washington Consensus and the expansion of policy-based lending into new areas. The core of the Consensus survived a significant shift in Washington politics: the Democratic Clinton administration both endorsed policy-based lending and assumed market liberalization as the main object of reform. Governance reforms became more attractive as it became increasingly clear that the Baker Plan was failing to deliver its promised results. The Clinton Treasury disagreed vehemently with most of the Meltzer Commission's recommendations. The evolution of the Washington Consensus mattered for the multilateral development banks (MDBs) because Washington was remarkably good at getting its way. It is noted that the two core tenets of the Baker Plan survived through the George Bush Snr. and Clinton administrations and never encountered any serious opposition in Congress.

Keywords: Washington Consensus; policy-based lending; Washington politics; Clinton administration; market liberalization; governance reforms; Baker Plan; Clinton Treasury; Meltzer Commission

Chapter.  12315 words.  Illustrated.

Subjects: Political Economy

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