The Washington Consensus in Latin America

Abstract

Washington Consensus policies evolved over time, both in Washington and among Latin American policymakers. These policies, involving trade liberalization and privatization (among other measures), were widely adopted in the region by the early 1990s. A generation of scholarly work sought to explain how and why Latin American countries embarked on economic reforms that governments had strongly resisted in the past. While many researchers focused on the top-down nature of the market-liberalization process, others called attention to its pluralist character and argued that the process had considerable public support. When the original Consensus ideas proved ineffective in promoting growth and improved living standards, technocratic Washington added new policies. By the early 2000s, Washington’s goal became that of reducing poverty while ensuring the completion of the original Washington Consensus reforms. In Latin America, however, there was a growing disillusionment with the original reform agenda and a strong challenge to key reforms. With the rise of social mobilization critical of neoliberal reforms and the election of left regimes challenging their main precepts, scholarship turned to a discussion of the nature of the new regimes and the extent to which their policies deviated from the Washington Consensus (both its original formulation and the later expanded version). While most scholars identify the left leaders of Ecuador, Bolivia, and particularly Venezuela, as offering the greatest challenges to neoliberalism, there is no consensus on the extent of the challenge to neoliberalism presented by Latin America’s left regimes. Research has also given attention to the rising demand of China for Latin American commodities as a key ingredient in the region’s left turn away from neoliberalism. The fall in commodity prices, however, set the stage for a resurgence of the political right, its business supporters, and the re-introduction of some key aspects of the original Washington Consensus.