Grok says: The Washington Consensus refers to a set of ten economic policy prescriptions promoted in the late 1980s and 1990s by institutions like the IMF, World Bank, and U.S. Treasury, primarily for developing countries. Coined by economist John Williamson in 1989, it emphasized free-market reforms to foster economic growth and stability. The core ideas include:
Fiscal discipline to avoid large deficits.
Redirecting public spending toward education, health, and infrastructure.
Tax reform to broaden the tax base and lower rates.
Market-determined interest rates.
Competitive exchange rates to boost exports.
Liberalizing trade by reducing tariffs and barriers.
Encouraging foreign direct investment.
Privatizing state-owned enterprises.
Deregulating markets to promote competition.
Strengthening property rights.
It was initially aimed at Latin American countries recovering from debt crises but became a broader template for global economic reform. Critics argue it prioritized markets over social welfare, often exacerbating inequality or ignoring local contexts. Supporters claim it helped stabilize economies and integrate them into global markets. The term is now sometimes used loosely to critique neoliberalism or U.S.-led economic influence.
