The Global Political Economy : A Washington Consensus A New Paradigm For Development

Now one must ascertain that such regulations would only be applied under certain governance systems- a good government; a government that is liable to the people. In such cases, there should be funds available for social programs. I will classify social programs as two types, based on how they should prioritizes allocation of funds:

WORLD BANK: governments play an important role in development, but there is no simple set of rules telling them what to do.

The argument can be made that economic freedom is a necessary precondition to political freedom, yet the unilateral focus of these reforms begs the question whether during the writing of the Washington Consensus, economic liberalization was solely a means to international development, or an end in itself. The historical support is for the latter, as John Williamson later reflects that there was, “a widespread attempt to tighten fiscal policy, extensive financial and trade liberalization, virtually universal elimination of restrictions on inward foreign direct investment, a lot of privatization, and quite a bit of deregulation. [But] the things that got most widely neglected were reforming public expenditure priorities, maintaining a competitive exchange rate, and extending property rights to the informal sector”

This essay will discuss the policies that were introduced and the impact that these

For many years, the U.S. has cut back on its promised obligations and responsibilities to help the cause of development aid. Between 1990 and 1993, U.S. exports to developed countries grew by 6.2%. In contrast, during that same period, U.S. exports to developing countries grew by a remarkable 49.8%, yielding 46 billion dollars more and 920,000 jobs in the United States (Atwood). Assistance cuts hurt America’s

Within the last 60 years, Third World development has been a global priority, at the top of virtually every Western agenda. And with the rise of the global population and poverty levels continuing to rise along with it, it is very easy to see why human development is becoming such a topic of focus and discussion among members of the academia. But one question that everyone wants the answer too is, how does Third World development fit into Globalization? Despite apparent compatibility, when closely examined it is clear to see that Globalization actually contradicts Third World development due to the conflict of agendas. Both Globalization and Development hold views concerning market reform, social structure and regulation, which are

The three chapters that we studied this week highlighted many important principles in the study of Economics. One of those concepts is the

According to William Easterly, the consensus on global development is an axiomatically wrong and ostentatious position. This is not new to Easterly, who spent a number of disenchanted years as a senior advisor at the World Bank. These tumultuous years would certainly help formulate Easterly’s austere perception of technocratic solutions to global poverty. Easterly’s contentious view of technocrats becomes a focused thesis in his book, The Tyranny of Experts. In this book, Easterly argues that poverty is not a “technical problem amenable to technical solutions” (Easterly 6). Instead, poverty is a manifestation of brutish leaders quashing the rights of individuals. While Easterly presents a cogent argument against top down development, the lack

I intend to, throughout this essay, explain these three different theories, evaluate them and also critically outline their main features.

This trend was popular in colonial times and has survived due to help from international organizations such as the IMF and the World Bank. One such way this that has been encouraged is through the Washington Consensus. The IMF and World Bank implemented the Washington Consensus, a set of fixed ideas about international trade and economic development, through structural adjustment programs which were mandatory for countries if they wished to borrow money from either of the organizations (Nederveen, 2004, p. 11). In conjunction with structural adjustments to continue the dependency theory, the United States uses both the IMF and the World Bank as tools to further their foreign policy and to support US aims and polices (Finnegan, 2003, p. 43). These programs were supposed to reduce poverty and facilitate growth but really just ended up screwing over many countries. Additionally, they were really just ways for America to assert their control under the guise of an international organization providing support to developing countries’ economies (Finnegan, 2003, p. 42). Ultimately structural adjustments were used to implement policies that the United States thinks is best for the world and promote American values (Manzo, 1999, p. 112). The World Bank and the IMF listen to the rich countries and implement policies that they believe are best for those countries that are in development while creating a situation that contributes to the continuation of a cycle of dependency (Manzo, 1999, p. 110). Ultimately neoliberalism has created a global regime that promotes dependency on the United States and allows them to decide what is best for countries that are still developing (Nederveen, 2004, p. 7). In the end, the fact that neoliberalism has many of the same contradictions that

Throughout, there is a keen sense that the IMF is completely guided by ideology which is focused on the free market and the markets’ ability to guide the economy properly at all times. It would seem that all those who work at the IMF are misguided and/or towing the party line in the form of the Washington Consensus. Moreover, of greater concern is perhaps that throughout this piece, it would seem that the World Bank could do no wrong. Stiglitz portrays himself and the World Bank as the white knight(s) who were championing the rights of those who could not fight for themselves against the US government, the US Treasury and even the Federal Reserve. He does so with little regard to any policies or actions that these organizations have done for positive reasons or with positive results. He displays unwavering support for governments to stimulate aggregate demand via social spending, so it is surprising that he is so punitive towards Western governments.

Joseph Stiglitz and Layna Mosley both discuss globalization in detail and both have similar views regarding globalization. In the chapter “The Political Economy of Globalization” Layna Mosley asks the question whether globalizations effect on government policy making has adverse effects on the state of the global economy or if governments retain autonomy in regards to policymaking despite globalization. She analyzes trends in globalization and the hypothesis of “the race to the bottom” as well as economic openness and if government are truly in control of capital markets. Joseph Stiglitz however analyzes globalization in a historical and current point of view and how the management of globalization has comparatively helped developed nations extensively more than developing/poor nations. Stiglitz’s supports his argument regarding the poor management of globalization by arguing that monopoly power created by patents and the TRIPs agreement has resulted in an unfair global market and is overall very critical of trade agreements. This paper will summarize and critically analyze these two readings and why both texts make strong a valid point in regards to the management of globalization and its effect on the global environment. Furthermore this paper will argue why the texts support the claim that globalization has not only prospered but also resulted in the end of the nation-state because of the increasing interdependence between countries all around the world. Globalization has

The rise of globalization following WWII generated three important factors that define today’s world. McNeill and McNeill agree with Pollard, Rosenberg, and Tignor that multiple economic changes, such as the creation of financial institutions like the International Monetary Fund (IMF) contributed to the globalization of the world economy. Carter and Warren further this argument by claiming that globalization has caused shifts in the modern economy, namely the rise of Asian economic powers. However, all three historians agree that the rise of globalization goes hand in hand with the rise of inequality in today’s world. Gaps in power, wealth, and access to information have only widened due to the trend of globalization. The final key factor defining our world today are the ongoing processes affecting development countries. McNeill and McNeill argue similarly to Carter and Warren that the end of imperialism generated new nations who quickly realized the free market was a pathway to stability. However, Pollard et al. and McNeill and McNeill place importance on financial institutions like the IMF forcing developing nations to reform their economies to be subservient to the world’s economy. Together, these historians argue that the trend of globalization following WWII caused factors like the modern global economy, the rise in inequality, and the development of new, decolonized nations to be key determiners in the world today.

this, I summarise their philosophies, compare them, and describe their approaches. The essay closes on

Globalization is defined as a worldwide development, the process of spreading ideas. More recently, globalization has become more focused on economics, the spreading of capitalism and opening international trade. Globalization through the past 50 years has developed a bad reputation, one that does not benefit countries the way people thought it would. Joseph E. Stiglitz, in his book, Globalization and Its Discontents, stresses that modern globalization is a good thing, but has not been done correctly in the past few decades. The ideas behind globalization have the potential to benefit the world, specifically developing countries. Stiglitz goes into detail about how the problem falls with the misguided attempts of the international economic institutions to solve developing countries’ economic problems. Something has gone very wrong with globalization, and the purpose of this book is to shed some light on where it went wrong. Stiglitz presents the problems with the international economic institutions’ damaging policies and their effects using ethnographic field work and historically comparative methods.