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Daniel Moss

The Uncomfortable Legacy of the ‘Washington Consensus’

John Williamson’s formula for helping Latin America through boom-bust cycles became shorthand for the free-market ideals that ultimately roiled Asia, much to his distress.   

He didn’t like it one bit.

He didn’t like it one bit.

Photographer: Joshua Paul/Bloomberg

In economics, the once heretical is now almost virtuous: central banks funding massive fiscal stimulus, deficits blowing out, de-emphasized inflation fears, and a degree of skepticism about markets. This isn’t limited to rich countries. A time traveler from the 1990s would scarcely recognize some emerging markets today.

Especially if that voyager was a proponent of the “Washington Consensus,” a view of reforms for ending boom-and-bust cycles in Latin America in the late 1980s. The notion became shorthand for market-friendly policies practiced in — some might even say prevailed upon — the developing world. John Williamson, the economist who formulated what became a controversial term, died over the weekend