Eco. 362– 9-4-2021 (Online Discussion Quiz 2 on the Washington Consensus)

2014/191971
Economics

Economist John Williamson coined the term “Washington Consensus” in 1989, in reference to a set of 10 market-oriented policies that were popular among Washington-based policy institutions. These policies centered around fiscal discipline, market-oriented domestic reforms, and openness to trade and investment. These policies failed to improve socioeconomic conditions in African countries for several reasons due to, among others, the failure to account for political economy within countries, reforms that did not adequately emphasize the role of local ownership in domestic economic policy. The ability to implement pro-poor policies alongside market-oriented reforms played a central role in successful policy performance. Some of the key policy reforms of the Washington Consensus/SAP period of the 1980s and 1990s included privatization, fiscal discipline, and trade openness, that were introduced by IFIs as conditions for debt relief to highly indebted, economically constrained African countries. The expectation was that market-oriented reforms would correct domestic policy-induced distortions in prices, such as overvalued exchange rates, subsidies that led to artificially low agricultural commodity prices, high wage rates, low interest rates, and subsidized agricultural input prices, which introduced inefficiencies in resource allocation, worsening shortages and reducing economic output. Nigeria have adopted theses policies have show that these policies failed to improve economic conditions, as the politics of IFI conditionality worked to undermine the role of local ownership in shaping domestic economic policy. In addition, reductions in government spending often reduced spending on pro-poor programs, and the removal of agricultural subsidies made it difficult for farmers to compete on international markets. The results were increased unemployment and sociopolitical unrest. Reforms were successful in improving economic growth when policymakers had the state capacity to implement them, and when, crucially, reforms were paired with pro-poor policies, spearheaded by governments. A stable government and sociopolitical environment with a focus on pro-poor policies was an essential ingredient in implementing successful reforms. Crucially, concurrent efforts to minimize the potential negative welfare impacts of macroeconomic reforms on domestic populations are important to increase needed public support for reforms.
Research has show that while the country failed to show growth when these polies were implemented, there has been considerable improvement in the economy post 2000.Comparing the reform countries to non-reform countries, result shows that during the initial reform years, economic performance was worse for reformers, with average per capita real GDP growth declining in the 1980s and 1990s. In contrast, non-reform adopters experienced positive growth over this period. Between 2000 and 2019, average per capita GDP was higher than during the 1980s and 1990s for both reformers and non-reformers. However, the increase in growth was even higher for reform adopters.

Uta-Daniel Nneoma Blossom
2017/249592
Economics
The Washington consensus as coined by John Williamson in 1989 are set of reforms policy makers believed would help developing countries.
Many features in Nigeria’s economy combined with other non-economic factors have produced a weak private sector that is largely oriented towards distributive activities. The productive and technological base is weak, outdated, narrow, inflexible and externally dependent. Furthermore, infrastructure is poor, inadequate and lacks maintenance. Thus, the effectiveness of incentives has been generally low, giving rise to inadequate utilization of the factors of production. The paper blames the country’s overdependence on single product export-crude oil-without profound efforts to diversify the economy as a key weakness. As such, the country should develop a class of entrepreneurs that possess the tacit knowledge required for rapid industrialization and development of the manufacturing sector.
In my opinion, the Washington consensus has not really worked in Nigeria mostly because of corruption in public offices(e.g tax reform)

EKPECHI AFOMA K
2015/249546
DEPARTMENT OF ECONOMICS
The Washington Consensus refers to a set of broadly free market economic ideas, supported by prominent economists and international organisations, such as the IMF, the World Bank, the EU and the US.
Essentially, the Washington consensus advocates, free trade, floating exchange rates, free markets and macroeconomic stability.
The ten principles originally stated by John Williamson in 1989, includes ten sets of relatively specific policy recommendations.
1) Low government borrowing. Avoidance of large fiscal deficits relative to GDP;
2) Redirection of public spending from subsidies (“especially indiscriminate subsidies”) toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment;
3) Tax reform, broadening the tax base and adopting moderate marginal tax rates;
4) Interest rates that are market determined and positive (but moderate) in real terms;
5)Competitive exchange rates;
6) Trade liberalization: liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs;
7) Liberalization of inward foreign direct investment;
8) Privatization of state enterprises;
9) Deregulation: abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudential oversight of financial institutions;
10)Legal security for property rights.
The Washington consensus was important for determining policy towards economic development in Latin America, South East Asia and other countries. Some implications of the Washington consensus.

Implications of Washington Consensus
Support of free trade through WTO and NAFTA – reduce tariff barriers.
IMF bailouts tended to involve free market reforms as a condition of receiving money.
Belief in free trade suggests countries, should specialise in goods/services where they have a comparative advantage. This may mean developing economies need to stick with producing primary products.
Criticisms of the Washington Consensus
1. Strategic trade theory. Some economists argue that free trade is not always in the best interest of developing economies. A strict adoption of free trade and comparative advantage can leave developing economies producing low-income growth and volatile priced primary products. If countries promoted new industries, it might require both selective tariffs on cheap imports and also government subsidies. For example, the Brazilian government’s support and development of Embraer, helped Brazil become successful in airline manufacturing.

2. Low government borrowing is not always appropriate. Implementing fiscal rules can cause unnecessary economic hardship if the government cuts spending at an inappropriate time. For example, fiscal consolidation during the great recession has caused low growth rates, and a failure to reduce debt to GDP ratios. If governments are pressured to cut spending it can also cause welfare support programmes to be hit, increasing poverty. However, in the long term, most economists would suggest it is prudent to reduce structural borrowing to manageable levels.

3. The Chinese approach. An interesting development in recent years is that Chinese firms have invested substantial sums in developing economies, such as Africa and Latin America. An FT report, suggests China has lent $110 bn to developing countries in past two years – more than the World Bank. The interesting thing about the Chinese approach is that it involves substantial investment in infrastructure and public sector investment – showing that for economic development, an interventionist approach can have a bigger return than leaving it to free markets.

4. Problems of privatisation. Privatisation can increase efficiency and improve the quality of the product/service. However, for key public sector industries, privatisation may mean companies ignore wider social objectives. For example, in the 1990s, under World Bank pressure, Bolivia privatised its water industry. But, this led to water supplies being cut off from the poorest members of society. (politics of water in Bolivia at the Nation)

5. Mis-interpretation. The second point about redirecting of public spending towards public sector initiatives like primary education, primary health care and infrastructure investment, has often been ignored. Instead the ‘Washington Consensus’ has come to refer to more market oriented policies, which have focused on less government intervention.

6. The macro-economic crisis of Latin America in the 1980s and South East Asian crisis in 1990s made these free market policies unpopular in the countries where they were implemented. (see: Criticisms of IMF)

7. Credit crisis and instability of free markets. The credit crisis beginning in 2007 has illustrated the potential for free markets to create instability and high unemployment. Financial deregulation has created the potential for financial instability.Washington Consensus policies were applied for more than two decades in such diverse contexts as Africa, Latin America and Asia, as well as in countries emerging from real socialism in Eastern Europe and Central Asia. There were usually two major stages of intervention: the first focused on macroeconomic stability and structural adjustment programs, and the second included such objectives as improving institutions, reducing corruption or dealing with infrastructure inefficiency (Naim, 1999). The conditionality exercised by the Bretton Woods institutions and wealthy countries played a crucial role in indebted countries’ decisions to push through macroeconomic stabilization reforms and structural adjustment programs. The debt crisis that first affected a number of Latin American countries and then African and Asian countries, in the 1970s and 1980s, further increased their dependence on external loans, leaving them no other option than to follow the prescriptions that enabled them to access financing.

What Exactly Went Wrong?
6
Washington Consensus policies have been criticized since the 1990s by a significant number of leading economists. Most notably, Joseph Stiglitz, chief economist at the World Bank from 1997 to 2000, criticized the policies prescribed by the IMF in response to the financial crises in Russia and Asia (Stiglitz, 2003); Paul Krugman was in favor of Asian governments imposing controls on capital flows in 1997-98. The debate generated over the response to the crisis provided a good illustration of the deep divide between leading economists, who either supported or opposed the IMF. The Washington Consensus purists insisted on the importance of stabilizing exchange rates in times of crisis through public budget cuts, higher taxes and interest rates and other recessive measures. Their opponents criticized such policies, arguing that they would lead to recession (Naim, 1999). Stiglitz called attention to the fact that sharp increases in interest rates would contribute towards the deepening of the crisis (Stiglitz, 2003).

It is now commonplace to say that structural adjustment (SAP) and macroeconomic stabilization programs had a disastrous impact on social policies and poverty levels in many countries. Following the first wave of reforms undertaken by debt-affected African and Latin American countries – which included public expenditure cuts, introduction of charges for health and education, and reductions in industrial protection, leading to high unemployment, poverty rise and unequal income distribution – UNICEF published the report Adjustment with a Human Face (1987), which called for “meso-policies” to be redirected towards protecting social and economic sectors that were essential to the survival of the poor, through the introduction of social protection programs.

NAME: MBAH CHIEBONAM
REG NO: 2017/249525
DEPT: ECONOMICS

Did the policy reforms of the Washington Consensus really help Nigeria? Or what is actually wrong with Nigeria.

The Washington Consensus was coined by John Williamson in 1989 for improving economic performance in Latin American Countries. The Washington Consensus is a set of ten economic policy prescriptions considered to constitute the standard reform package promoted for crisis-wracked developing countries by Washington, D.C.-based institutions such as the International Monetary Fund (IMF), World Bank and United States Department of the Treasury. These standard reforms includes; Trade Liberalization which is the removal of all trades barriers between and among counties, Tax reforms, Interest Rate Flexibility or Liberalization, Privatization of state-owned properties and enterprises, Competitive Exchange Rate, Fiscal Discipline which deals with the government revenue and expenditure. The main aim of these Washington consensus policy on developing countries was to help developing countries improve on their economic growth and development of their nation.
In Nigeria, there is obviously poor implementation of these policies due to some facts such as political instability; each government brings new policy scraping off the already existing one thereby causing the Washington Consensus not to function effectively in our economy. Also there is no stable government and a sociopolitical environment in Nigeria and this is needed for the Washington Consensus to work in an economy.
The Fiscal discipline policy has suffered due to corruption in Nigeria; the people in power only think about themselves ,their personal interest and gain regarding nothing the interest of the masses which worsened the situation and the consensus reforms wouldn’t survive.

ALI CHUKWUEMEKA JAPHET

2017/242427

The concept and name of the Washington Consensus were first presented in 1989 by John Williamson, an economist from the Institute For International Economics, an international economic guru based in Washington, D.C. He used the term to summarize commonly shared themes among policy advice by Washington-based institutions at the time, such as the International Monetary Fund, World Bank, and U.S. Treasury Department, which were believed to be necessary for the growth of developing countries such as Nigeria.

The policy tended to achieve macro-economic discipline, market economy and trade liberalisation.

However, these consensus seems to be non-effective in Nigeria due to the following reasons:

1. Bad governance and corruption: Everything rises and falls on the leadership. Nigeria have been missing it big time when it comes to the issue of good governance. We have leaders who have no interest of the masses at heart. They initiate policies that will only solve their private need. Thus, leading to embezzlement and mismanagement of public funds.

2. Weak institutions/ Poor implementation of policies; Most times when policies are being enacted, it seems to not be actualised because of weak institutions to implement such policies.

These few points are the main reason why it seems that the good intentions of Washington consensus is not being seen in Nigeria.

The Washington Consensus is a set of ten economic policy prescriptions considered to constitute the “standard” reform package promoted for crisis-wracked developing countries by Washington, D.C.-based institutions such as the International Monetary Fund (IMF), World Bank and United States Department of the Treasury. John Williamson who was the first used this term in 1989 saw it as a set of reform policies to see how developing countries could advance to be like developed countries.
Some of these policies include: the prescriptions encompassed free-market promoting policies in such areas as macroeconomic stabilization, economic opening with respect to both trade and investment, interest rate flexibility, tax reforms and the expansion of market forces within the domestic economy.

This consensus has really helped lots of developing countries become better and some even developed as a result of this consensus.

However, this was not effective in Nigeria because of the instability in the implementation of policies. Another key reason why these policies were not properly implemented is because of the level of corruption in the Nigerian government. Knowing that these policies are favorable to the nation but not favorable to some government officials. Moreover, these officials know that if these policies were implemented some major gateways to their corrupt activities will be completely shut so they rather do what is favorable to them and their activities than what is favorable to the nation as a whole.

Name: Ijara Peter Elochukwu
Reg no: 2017/249513
Department : Economics department
petochris86@yahoo.com

The Washington Consensus was developed by John Williamson and his team was a set of reform policies on how developing countries could develop like their developed counterparts. They include: Trade Liberalization (removal of all trades barriers between and among counties), Tax reforms, Interest Rate Liberalization, Privatization of state-owned properties and enterprises, Competitive Exchange Rate, Fiscal Discipline. All these and others were good reform policies as it worked for some developing countries then.
It has however not yielded the desired results in Nigerian due to Fiscal indiscipline on the part of government. Over the years the Nigerian government has borrowed more and more money for recurrent expenditures not capital expenditures that will lay the foundation for development.
In conclusion, corruption has however stalled the effects of this policies in Nigeria. Nigerian leaders pursue policies that favour the ruling class and embezzle public supposed to be used for capital projects to set the economy in motion.
This above is my honest opinion.

Name: Nkwocha Ikechukwu BonaventureHistory
Reg No: 2017/249530
Dept: Economics Major
Topic: THE WASHINGTON CONSENSUS MADE A LOT OF INTERESTING PRESCRIPTION FOR DEVELOPING COUNTRIES. IN YOUR OPINION,DO YOU THINK THE PRECRIBED POLICY REFORMS HAVE REALLY HELP NIGERIA OF WHAT IS ACTUALLY THE PROBLEM WITH NIGERIA
INTRODUCTION
Washington Consensus is set of policies prescription for developing countries to see how carry them along in the things of development as this countries were fear distanced from development.
MAIN ARGUMENT
The term Washington Consensus was first used by John Williamson the English Economist. The term Washington Consensus represent a set of 10 economic policies prescription by Washington, D. C – based institutions such as the World Bank, International Monetary Fund (IMF) and United States Department of the Treasury considered to constitute the “standard reform” package promoted for the crisis wracked developing countries, as the 10 prescription was titled under three major Sub-heads. The prescription encompasses policy in such areas as economic opening regarding to trade and investment, macroeconomic stabilization and expansion of market forces within the domestic
THE TEN PRESCRIPTION
1. Fiscal policy discipline, Government of this countries is required to avoid spending money on irrelevant things so as not run into large deficit. with avoidance of large fiscal deficits relative to GDP;
2. Redirection of public spending from subsidies (“especially indiscriminate subsidies”) toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment; because always provision of subsidy can also lead to market failure while efficiency is what the government should go for.
3. Tax reform, broadening the tax base and adopting moderate marginal tax rates;
4. Interest rates that are market determined and positive (but moderate) in real terms; to allow the forces of demand and supply to determine interest rates.
5. Competitive exchange rates; developing countries were urged to lower their currency so as to attract market from advanced countries.
6. Trade liberalization : liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs;
7. Liberalization of inward foreign direct investment;
8. Privatization of state enterprises; moving state enterprise into the hands of the private individual to foster competition and this leads to economic growth.
9. Deregulation: abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudential oversight of financial institutions;
10. Legal security for property rights. Ensure property rights are well enforced to encourage starters and upcoming.

HISTORY.
The concept and name of the Washington Consensus were first presented in 1989 by John Williamson, an economist from the Institute for International Economics, an international economic think tank based in Washington, D.C. Williamson used the term to summarize commonly shared themes among policy advice by Washington-based institutions at the time, such as the International Monetary Fund, World Bank, and U.S. Treasury Department, which were believed to be necessary for the recovery of countries in Latin America from the economic and financial crises of the 1980s.[ citation needed ]
HAVE THIS 10 PRESCRIPTION HELP NIGERIA OR WHAT IS THE PROBLEM WITH NIGERIA.
Mr. President Sir, I personally say NO to whether the ten Washington Consensus prescription have helped us looking at its percentage of achievement, evaluation of the ten prescription from fiscal discipline, our government spends money without an answer to the question “THE VALUE FOR MONEY” so our budget deficit every year only is almost half of what we earn and it continues to increase every year currently. Privatization for example PHCN that the federal government privatised, no change in their service even now its worse, go to some villages that had light or is it interest rates, you can say that the federal government or Central Bank of Nigeria to allow the forces of demand and supply to determine interest rates it will be a death trap for the poor masses.
Only on liberalization can we say some achievement have been made intense of we importing things at low cost but we don’t export much so in this expecting we are still losing.
The 10 present present prescription is recognized in Nigeria, as some are in practice like privatisation and liberalization while some are not like interest rates and fiscal discipline. Mr present president, our country Nigeria actual problem is because political interest ( individualism ) is more important than economic state interest ( nationalism ) and to me the question we need ask ourselves is how can we have solve the problems of political power because it every powerful in Nigeria and individuals have taken advantage of that to feed their bags.

NAME: IJE VORDA GOODNESS
DEPARTMENT: ECONOMICS
REG NO: 2017/249514
Email: vordagoodness78@gmail.com

The Washington consensus consists of ten prescriptions ranging from low government borrowing, redirection of public spending, tax reforms ( broadening tax base and adopting moderate marginal tax rate), trade liberation, competitive exchange rate, privatization of state enterprises, deregulation of the economy to ease barriers to entry and exit etc. However development in developing countries has not being corresponded with the prescriptions.

In Nigeria there’s has been widespread privatization of state owned enterprises but this has only further widened the gap between the rich and the poor as the people who are able to acquire them see it as a means to exploit the people.
High fiscal indiscipline has further dampened the effects of the Washington consensus prescriptions. Nigeria over the years has borrowed more and more money and has failed to use this loans and funds for what it’s meant for. The weak institutions in the country allows the mismanagement of funds and corruption that don’t let the country to develop.
The prescription of trade liberation meant that the industries in developing countries remained agricultural because they cannot compete with their counterparts in developed economies.
Hopefully with great fiscal discipline and stronger institutions Nigeria will experience greater economic growth that is in line with the Washington consensus.

Ugwoke Cornelius Esomchi
2017/249581

The Washington Consensus brought up by John Williamson was a set of reform policies on how developing countries could advance or become or grow to be like the developed countries. Some of which include: Trade Liberalization (removal of all trades barriers between and among counties), Tax reforms, Interest Rate Flexibility or Liberalization, Privatization of state-owned properties and enterprises, Competitive Exchange Rate, Fiscal Discipline (dealing with the government revenue and expenditure, etc. All these and others were good reform policies as it worked for some developing countries then.
As regards the issue whether these reform policies have helped Nigeria or not, the reform policies have actually not be helpful or even working today the least in Nigeria.
This is mainly due to the fact that first, there is poor implementation of these policies. Like obviously, we have all these excellent, mouthwatering polices that are very much making a lot of sense, but the issue with this country is the poor implementation of these policies. The body with which would be saddled with the responsible of discharging these duties could be either not discharging them at all or not effectively and efficiently carrying them out as stated.
Second, I would say that the poor implementation problem could be due to fact that we suffer from political instability. Our government today could bring up a policy and then tomorrow’s government can come and scrap off that existing policy and which may sometimes have not even started started it’s work in the economy thereby causing us to suffer for it as such reform polices like the Washington Consensus would not even work in our economy.

Okoye Kingsley Chigozie
Economics
2017/249561
OkoyeKingsley93@gmail.com

The Washington Consensus refers to a set of broadly free market economic ideas, supported by prominent economists and international organisations, such as the IMF, the World Bank, the EU and the US .Essentially, the Washington consensus advocates, free trade, floating exchange rates, free markets and macroeconomic stability. The Washington consensus was important for determining policy towards economic development in Latin America, South East Asia and other countries. The Washington Consensus refers to a set of free-market economic policies supported by prominent financial institutions such as the International Monetary Fund, the World Bank, and the US. Treasury. A British economist named John Williamson coined the term Washington Consensus in 1989.The ideas were intended to help developing countries that faced economic crises. In summary, The Washington Consensus recommended structural reforms that increased the role of market forces in exchange for immediate financial help. Some examples include free-floating exchange rates and free trade. These are the ten specific principles originally set out by John Williamson in 1989:
1.Low government borrowing. The idea was to discourage developing economies from having high fiscal deficits relative to their GDP.
2.Diversion of public spending from subsidies to important long-term growth supporting sectors like primary education, primary healthcare, and infrastructure.
3.Implementing tax reform policies to broaden the tax base and adopt moderate marginal tax rates.
4.Selecting interest rates that are determined by the market. These interest rates should be positive after taking inflation into account (real interest rate).
5.Encouraging competitive exchange rates through freely-floating currency exchange.
6.Adoption of free trade policies. This would result in the liberalization of imports, removing trade barriers such as tariffs and quotas.
7.Relaxing rules on foreign direct investment.
8.The privatization of state enterprises. Typically, in developing countries, these industries include railway, oil, and gas.
9.The eradication of regulations and policies that restrict competition or add unnecessary barriers to entry.
10.Development of property rights.

CRITICISMS OF THE WASHINGTON CONCENCUS
a. Some economists argue that free trade is not always in the best interest of developing economies. Some strategic and infant industries have to be protected initially to provide long-term growth. These industries may also require protection in the form of subsidies or tariffs against imports.
b. Chinese firms, aided by the government, have been investing large sums in developing economies in Africa, Asia, and Latin America. These firms typically invest in infrastructure, creating opportunities for long-term trade and growth.
c. Privatization can increase productivity and enhance the quality of the product or service. However, privatization can often lead to companies ignoring certain low-income markets or the social needs of a developing economy.
d. The free market has its own faults and instabilities. As we saw with the Great Recession in 2008-2009, increased deregulation can lead to financial volatility that can infect the entire economy.
Critics have pointed out that the policies were unhelpful and imposed harsh conditions on the developing countries, others have defended the long-term positive impact of these ideas. Unfortunately, the Washington Consensus is strictly considered as a failed consensus by many major institutions and economists from group of Marxism, Dependency Theory and Structuralist after some economic crisis in Asia, Latin America, Africa, and lastly the global financial crisis in 2008. According to Stiglitz, the adoption of the Washington Consensus agenda in some Latin American and African countries has contributed to the economic crisis. In contrast, India and several East Asian countries like China, Taiwan and South Korea show a great development when they ignored the Washington Consensus and its representative institutions.Many critiques and debates have been addressed towards the Washington Consensus since last two decades which question the effectiveness of this consensus and its original sense.

The failure of the Washington Consensus has provided many lessons that can be learned by new government leaders in developing and less-developed countries to concern on their policies and international financial institutions to do a reform and create a new economic package or policies to boost global growth and development. The neo-liberalist people have to believe that the Washington Consensus has failed to give a solution for global development. However, it has given a bad experience for countries adopting the policy package from this consensus. As many interpretations of the Washington Consensus exist as there are regions in the world. For Africa, the panoply of reforms subsumed under the term has been useful as a guide to economic policymaking—with the main focus on fiscal discipline and privatization—even though it has proved difficult for most African countries to pursue all of them. Few countries anywhere have applied the reforms of the Washington Consensus completely, not least because some of them are culturally and historically sensitive. A larger difficulty, however, is that the reform agenda only partially addresses the growth constraints faced by many developing countries. Macroeconomic stabilization is critical for growth, but it is not clear that privatization is. Moreover, privatization and deregulation simply do not apply to African countries in the same way that they may in Latin American countries.

Nevertheless, most African states have made strong progress with many of the reforms, which helps explain, in part, the continent’s improved economic performance in recent years. Economic growth in Africa is expected to average 3.1 percent this year and 4.2 percent next year—more than twice the average in 1984–93 and marginally higher than the average for all developing countries. Macro-economic stability is being consolidated, with average consumer price inflation at 9.7 percent in 2002, down from 13.2 percent in 2001 and 54.6 percent in 1994. Underpinning the better inflation picture are lower fiscal deficits, which have declined from an average 5.2 percent of GDP in 1994 to 2.1

The Washington Consensus was foundered in the year 1989 by Williamson John. He made alot of prescriptions which he hope will be very helpful to developing countries which Nigeria is one of them.
One of his prescription is Tax Reform. According to him,if the tax system is restructured,foreign investors will be encouraged and the economy will be boosted.
He also prescribed that privatization of government owned companies will go a long way in improving the economy of the country. Although, Nigeria has gone a long way in privatization of industries but more still need to be done in order to achieve a better economy.
Liberation is also one of his prescription which implies that if companies are giving free hand,they will perform better than when under government watch.
Personally I believe that Nigeria will be better but then we need to tackle our problems as they come.

NAME: DORO YAHAYA ADAMU
REG NO: 2017/249490
DEPT: ECONOMICS

The Washington Consensus made alots of interesting prescription for developing countries In your opinion Do you Think The presciption policy reforms by Washington consensus have really helped Nigeria, or what is the problem with Nigeria?

The Washington consensus refers to a set of free market economic policies supported by prominent financial institutions such as, the international monetary fund, the World bank and U.S treasury. A British economist named John Williamson coined the term Washington consensus in 1989.
The ideas were intended to help developing countries that faced economic crisis. In short note, the Washington consensus recommended structural reforms that increased the role of market forces in exchange for immediate financial help. These are the ten specific principles set out by John Williamson in 1989;
1. Low government borrowing. The idea was to discourage developing economy from having high fiscal deficits relative to their GDP.
2. Diversion of public spending from subsidies to important long-term growth supporting sector like primary education, primary healthcare and infrastructures.
3. Implementing tax reform policies to broaden the tax base and adopt moderate marginal tax rate.
4. Selecting interest rates that are determined by the market. These interest rates should be positive after taking inflation into account (real interest rate).
5. Encouraging competitive exchange rates through free- floating currency exchange.
6. Adopting of free trade policies. This would result in the liberalization of imports, removing trade barriers such as tariffs and quotas.
7. Relaxing rules on foreign direct investment
8. The privatization of state enterprises. Typically in developing countries, these industries include railway, oil and gas.
9. The eradication of regulations and policies that restrict competition or add unnecessary barriers to entry.
10. Development of property right

The policies were intended to convert global apartheid perspective, which claimed that developing countries were not part of the orthodox economic world, but rather pursued a model of development that included inflation and import substitution.

In the case of Nigeria most of the Washington prescription remain inactive. The Washington prescription work and helped in many developing countries, but in Nigeria it only remain on paper. that is it can only be prescribe and published on paper. looking at the structural reforms in Nigeria for instance, prior to the recent reforms, the Nigerian public sector was underperforming and imposed significant drain on the treasury. Large public investments in state owned enterprises in previous decades had yield very few concrete benefits. For two decades prior to economic reform, Nigeria’s trade regime was viewed as complex, restrictive and opaque (WTO, 2005). The Nigerian banking sector was weak and fragmented, often financing short- term arbitrage opportunities rather than productive private investments.
Nigeria need a broad range of active structural reforms to improve the domestic business climate and enhance competitiveness to deregulate and reduce government activities in various economic sectors and to address various structural constraint to growth.

Washington concensus brought things like Anti corruption, secure of property rights, Tax reform etc
All these would have been evident in Nigeria but we are still undeveloped ,corrupt and the leaders are not passionate about the country.As long as we keep neglecting important issues such as the reform we will remain stagnant

Name: NWOBODO CHRISTIAN CHUKWUEMEKA
Reg No: 2017/241437
Department: Economics

The Washington Consensus is primarily a set of 10 recommendations identified by John Williamson in 1989 which postulates that when duly implemented will bring about considerable amount of economic development in developing nations.

In the case of Nigeria, the Washington Consensus may be considered ineffective to a great extent but certain policies like privatisation of state-owned entities like NEPA has to a great extent improved the experience of power supply in the country.
The economy has undergone series of deregulation to ease the barriers to entry into markets which increased Nigeria’s ease of doing business indices according to IMF.

Despite the negative narratives about the Nigerian economy, we are working towards a new and better Nigeria which in years to come these policies will be considerably more effective in the country.

Name: Ojigwe Shalom Chinaza
Reg No: 2017/249549
Department: Economics
The Concept and name of the Washington Consensus were first presented in 1989 by John Williamson, an economist from the Institute for International Economics, an international economic think tank based in Washington, D.C. Williamson used the term to summarize commonly shared themes among policy advice by Washington-based institutions at the time, such as the International Monetary Fund, World Bank, and U.S. Treasury Department, which were believed to be necessary for the recovery of countries in Latin America from the economic and financial crises of the 1980s.
The consensus as originally stated by Williamson included ten broad sets of relatively specific policy recommendations:
• Fiscal policy discipline, with avoidance of large fiscal deficits relative to GDP
• Redirection of public spending from subsidies (“especially indiscriminate subsidies”) toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment;
• Tax reform, broadening the tax base and adopting moderate marginal tax rates;
• Interest rates that are market determined and positive (but moderate) in real terms;
• Competitive exchange rates;
• Trade liberalization: liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs;
• Liberalization of inward foreign direct investment;
• Privatization of state enterprises;
• Deregulation: abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudential oversight of financial institutions;
• Legal security for property rights.
The Washington Consensus primarily believed that developing countries needed the above policies so that growth and development could exist.
They believed that developing countries needed foreign interference to boost their economy. Now, using Nigeria as a case study; it is safe to say that all these policies did not play out well in the country. For example, foreign direct investment cannot exactly yield the necessary results when there are no established infrastructure such as electricity, good roads and a workable environment. An industry would need other basic necessities in other to produce effectively, which apparently Nigeria does not provide at affordable prices.
Also, trade liberalization has done more harm than good in Nigeria. Trade liberalization has made Nigeria a dumping ground for various goods and services, Nigeria is now the place where goods are dumped in. Also, Nigerians would rather patronize foreign industries rather than the domestic ones. All these factors affect the local industries negatively because production and sales are not being made, down-sizing occurs leading to unemployment which affects the economy negatively.
Also, privatization of industries has done more harm than good in Nigeria, because the private industries no longer focus on the social objective but now aim at minimizing costs and maximizing profits . This makes basic amenities become inaccessible to the poor masses. This does not encourage growth. Also, the high level of corruption in Nigeria cannot support the legal security of property rights as well as liberalization of foreign direct investment.
It is safe to say that due to the nature of our leaders, laissez faire attitude of policy makers; the Washington Consensus did not aid Nigeria, and could be almost said to be useless.

Eric-nnaji Chiamaka Ngozi
2017/249499
Economics Department

The Washington Consensus helped Nigeria in the sense that it gave the country a sense of direction in order to develop it’s economy better but it hasn’t helped in actually making the economy better. The policies are not to blame for this but the structure of the Nigerian economy itself. There are no efficient enough entities to ensure that the policies are well carried out and the entities available have somehow been corrupted. There is also political instability in the country which would definitely hinder the effect of the policies in the country.
The large population of the country would also disrupt the implementation of the policies.
Non-cooperation from the citizens concerning the instructions of the government is another problem of the country.
The government of the country are already in huge debts for the first policy to be feasible.
Privatization of some public companies hasn’t really helped the country’s economy either for instance, even after the privatization of NEPA, the country still experience a lot of power disruptions.
In conclusion, the Washington Consensus policies should have been a great way to kickstart our Economic growth and development in Nigeria but the lack of a strong structural base has robbed us of the benefits.

The Washington Consensus relates to a set of broadly free market economic ideas, supported by prominent economists and international organizations, such as the IMF, the World Bank, the European Union and the United States. Essentially, the Washington Consensus advocates free trade, floating exchange rates, free markets, and macro economic stability. The implications of Washington Consensus support of free trade through the WTO and NAFTA is to reduce the tariff barriers. IMF bailouts tended to involve free market reforms as a condition of receiving money. The criticisms of the Washington Consensus include: strategic trade theory, low government borrowing is not always appropriate, the chinese approach, the problem of privatisation, misinterpretation, the macro economic crisis and credit crisis and instability of free markets. The policy reform actually has not helped Nigeria.

The Washington Consensus relates to a set of broadly free market economic ideas, supported by prominent economists and international organizations such as the IMF, the World Bank, the European Union and the United States. Essentially, the Washington Consensus advocates for free trade, floating exchange rates, free markets, and macro economic stability. The implications of Washington Consensus support of free trade through WTO and NAFTA is to reduce tariff barriers. IMF bailouts tended to involve free market reforms as a condition of receiving money. The criticisms of the Washington Consensus include: Strategic trade theory, low government borrowing is not always appropriate, the Chinese approach, the problem of privatisation, misinterpretation, the macro economic crisis and credit crisis and instability of free markets. The policy reform actually has not helped Nigeria.

Eke promise chinaza
2017/241531
Economic Education

Washington Consensus
This article includes a list of general references, but it remains largely unverified because it lacks sufficient corresponding inline citations. Please help to improve this article by introducing more precise citations. (May 2015).
The Washington Consensus is a set of ten economic policy prescriptions considered to constitute the “standard” reform package promoted for crisis-wracked developing countries by Washington, D.C.-based institutions such as the International Monetary Fund (IMF), World Bank and United States Department of the Treasury.The term was first used in 1989 by English economist John Williamson.The prescriptions encompassed policies in such areas as macroeconomic stabilization, economic opening with respect to both trade and investment, and the expansion of market forces within the domestic economy.
Subsequent to Williamson’s use of the terminology, and despite his emphatic opposition, the phrase Washington Consensus has come to be used fairly widely in a second, broader sense, to refer to a more general orientation towards a strongly market-based approach (sometimes described as market fundamentalism or neoliberalism). In emphasizing the magnitude of the difference between the two alternative definitions, Williamson has argued that his ten original, narrowly defined prescriptions have largely acquired the status of “motherhood and apple pie” (i.e., are broadly taken for granted), whereas the subsequent broader definition, representing a form of neoliberal manifesto, “never enjoyed a consensus [in Washington] or anywhere much else” and can reasonably be said to be dead.
Discussion of the Washington Consensus has long been contentious. Partly this reflects a lack of agreement over what is meant by the term, but there are also substantive differences over the merits and consequences of the policy prescriptions involved. Some critics take issue with the original Consensus’s emphasis on the opening of developing countries to global markets, and/or with what they see as an excessive focus on strengthening the influence of domestic market forces, arguably at the expense of key functions of the state. For other commentators, the issue is more what is missing, including such areas as institution-building and targeted efforts to improve opportunities for the weakest in society.
History
Original sense: Williamson’s Ten Points
The concept and name of the Washington Consensus were first presented in 1989 by John Williamson, an economist from the Institute for International Economics, an international economic think tank based in Washington, D.C. Williamson used the term to summarize commonly shared themes among policy advice by Washington-based institutions at the time, such as the International Monetary Fund, World Bank, and U.S. Treasury Department, which were believed to be necessary for the recovery of countries in Latin America from the economic and financial crises of the 1980s.
The consensus as originally stated by Williamson included ten broad sets of relatively specific policy recommendations:
Fiscal policy discipline, with avoidance of large fiscal deficits relative to GDP;
Redirection of public spending from subsidies (“especially indiscriminate subsidies”) toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment;
Tax reform, broadening the tax base and adopting moderate marginal tax rates;
Interest rates that are market determined and positive (but moderate) in real terms;
Competitive exchange rates;
Trade liberalization: liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs;
Liberalization of inward foreign direct investment;
Privatization of state enterprises;
Deregulation: abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudential oversight of financial institutions;
Legal security for property rights.
Origins of policy agenda
Although Williamson’s label of the Washington Consensus draws attention to the role of the Washington-based agencies in promoting the above agenda, a number of authors have stressed that Latin American policy-makers arrived at their own packages of policy reforms primarily based on their own analysis of their countries’ situations. Thus, according to Joseph Stanislaw and Daniel Yergin, authors of The Commanding Heights, the policy prescriptions described in the Washington Consensus were “developed in Latin America, by Latin Americans, in response to what was happening both within and outside the region.”[4] Joseph Stiglitz has written that “the Washington Consensus policies were designed to respond to the very real problems in Latin America and made considerable sense” (though Stiglitz has at times been an outspoken critic of IMF policies as applied to developing nations).[5] In view of the implication conveyed by the term Washington Consensus that the policies were largely external in origin, Stanislaw and Yergin report that the term’s creator, John Williamson, has “regretted the term ever since”, stating “it is difficult to think of a less diplomatic label.”
Kate Geohegan of Harvard University’s Davis Center for Russian and Eurasian Studies credited Peruvian neoliberal economist Hernando de Soto for inspiring the Washington Consensus.[6] Williamson partly credited de Soto himself for the prescriptions, saying his work was “the outcome of the worldwide intellectual trends to which Latin America provided” and said that de Soto was directly responsible for the recommendation on legal security for property rights.
A 2010 paper by Nancy Birdsall, Augusto de la Torre, and Felipe Valencia Caicedo likewise suggests that the policies in the original consensus were largely a creation of Latin American politicians and technocrats, with Williamson’s role having been to gather the ten points in one place for the first time, rather than to “create” the package of policies.
In Williamson’s own words from 2002:
It is difficult even for the creator of the term to deny that the phrase “Washington Consensus” is a damaged brand name (Naím 2002). Audiences the world over seem to believe that this signifies a set of neoliberal policies that have been imposed on hapless countries by the Washington-based international financial institutions and have led them to crisis and misery. There are people who cannot utter the term without foaming at the mouth.

My own view is of course quite different. The basic ideas that I attempted to summarize in the Washington Consensus have continued to gain wider acceptance over the past decade, to the point where Lula has had to endorse most of them in order to be electable. For the most part they are motherhood and apple pie, which is why they commanded a consensus.
Broad sense
Williamson recognizes that the term has commonly been used with a different meaning from his original prescription; he opposes the alternative use of the term, which became common after his initial formulation, to cover a broader market fundamentalism or “neoliberal” agenda.
I of course never intended my term to imply policies like capital account liberalization (…I quite consciously excluded that), monetarism, supply-side economics, or a minimal state (getting the state out of welfare provision and income redistribution), which I think of as the quintessentially neoliberal ideas. If that is how the term is interpreted, then we can all enjoy its wake, although let us at least have the decency to recognize that these ideas have rarely dominated thought in Washington and certainly never commanded a consensus there or anywhere much else…
More specifically, Williamson argues that the first three of his ten prescriptions are uncontroversial in the economic community, while recognizing that the others have evoked some controversy. He argues that one of the least controversial prescriptions, the redirection of spending to infrastructure, health care, and education, has often been neglected. He also argues that, while the prescriptions were focused on reducing certain functions of government (e.g., as an owner of productive enterprises), they would also strengthen government’s ability to undertake other actions such as supporting education and health. Williamson says that he does not endorse market fundamentalism, and believes that the Consensus prescriptions, if implemented correctly, would benefit the poor. In a book edited with Pedro-Pablo Kuczynski in 2003, Williamson laid out an expanded reform agenda, emphasizing crisis-proofing of economies, “second-generation” reforms, and policies addressing inequality and social issues.
As noted, in spite of Williamson’s reservations, the term Washington Consensus has been used more broadly to describe the general shift towards free market policies that followed the displacement of Keynesianism in the 1970s. In this broad sense the Washington Consensus is sometimes considered to have begun at about 1980. Many commentators see the consensus, especially if interpreted in the broader sense of the term, as having been at its strongest during the 1990s. Some have argued that the consensus in this sense ended at the turn of the century, or at least that it became less influential after about the year 2000. More commonly, commentators have suggested that the Consensus in its broader sense survived until the time of the 2008 global financial crisis. Following the strong intervention undertaken by governments in response to market failures, a number of journalists, politicians and senior officials from global institutions such as the World Bank began saying that the Washington Consensus was dead. These included former British Prime Minister Gordon Brown, who following the 2009 G-20 London summit, declared “the old Washington Consensus is over”. Williamson was asked by The Washington Post in April 2009 whether he agreed with Gordon Brown that the Washington Consensus was dead. He responded:
It depends on what one means by the Washington Consensus. If one means the ten points that I tried to outline, then clearly it’s not right. If one uses the interpretation that a number of people—including Joe Stiglitz, most prominently—have foisted on it, that it is a neoliberal tract, then I think it is right.
After the 2010 G-20 Seoul summit announced that it had achieved agreement on a Seoul Development Consensus, the Financial Times editorialized that “Its pragmatic and pluralistic view of development is appealing enough. But the document will do little more than drive another nail into the coffin of a long-deceased Washington consensus.”
Context
The widespread adoption by governments of the Washington Consensus was to a large degree a reaction to the macroeconomic crisis that hit much of Latin America, and some other developing regions, during the 1980s. The crisis had multiple origins: the drastic rise in the price of imported oil following the emergence of OPEC, mounting levels of external debt, the rise in US (and hence international) interest rates, and—consequent to the foregoing problems—loss of access to additional foreign credit. The import-substitution policies that had been pursued by many developing country governments in Latin America and elsewhere for several decades had left their economies ill-equipped to expand exports at all quickly to pay for the additional cost of imported oil (by contrast, many countries in East Asia, which had followed more export-oriented strategies, found it comparatively easy to expand exports still further, and as such managed to accommodate the external shocks with much less economic and social disruption). Unable either to expand external borrowing further or to ramp up export earnings easily, many Latin American countries faced no obvious sustainable alternatives to reducing overall domestic demand via greater fiscal discipline, while in parallel adopting policies to reduce protectionism and increase their economies’ export orientation.
Many countries have endeavored to implement varying components of the reform packages, with implementation sometimes imposed as a condition for receiving loans from the IMF and World Bank.
Effects
The Washington Consensus would result in socioeconomic exclusion and weakened trade unions in Latin America, resulting with unrest in the region. Countries who followed the consensus initially alleviated high inflation and excessive regulation, though economic growth and poverty relief was insignificant. The consensus resulted with a shrinking middle class in Latin America that prompted dissatisfaction of neoliberalism, a turn to the political left and populist leaders by the late-1990s, with economists saying that the failure of the consensus established support for Hugo Chávez in Venezuela, Evo Morales in Bolivia and Rafael Correa in Ecuador.
Williamson has summarized the overall results on growth, employment and poverty reduction in many countries as “disappointing, to say the least”. He attributes this limited impact to three factors: (a) the Consensus per se placed no special emphasis on mechanisms for avoiding economic crises, which have proved very damaging; (b) the reforms—both those listed in his article and, a fortiori, those actually implemented—were incomplete; and (c) the reforms cited were insufficiently ambitious with respect to targeting improvements in income distribution, and need to be complemented by stronger efforts in this direction. Rather than an argument for abandoning the original ten prescriptions, though, Williamson concludes that they are “motherhood and apple pie” and “not worth debating”. Both Williamson and other analysts have pointed to longer term improvements in economic performance in a number of countries that have adopted the relevant policy changes consistently, such as Chile (below).
Speaking at a fundraiser for the James A. Baker III Institute for Public Policy in November 2018, Barack Obama acknowledged that globalization and the policies associated with the Washington Consensus exacerbated economic inequality which helped fuel the rise of the alt-right. According to a 2020 study, the implementation of policies associated with the Washington Consensus significantly raised real GDP per capita over a 5- to 10-year horizon.
Argentina
1998–2002 Argentine great depression and Argentine debt restructuring.
Police responding to the December 2001 riots in Argentina
The Argentine economic crisis of 1999–2002 is often held out as an example of the economic devastation said by some to have been wrought by application of the Washington Consensus. Argentina’s former Deputy Foreign Minister Jorge Taiana, in an interview with the state news agency Télam on August 16, 2005, attacked the Washington Consensus. There never was a real consensus for such policies, he said, and today “a good number of governments of the hemisphere are reviewing the assumptions with which they applied those policies in the 1990s”, adding that governments are looking for a development model to guarantee productive employment and the generation of real wealth.
Many economists, however, challenge the view that Argentina’s failure can be attributed to close adherence to the Washington Consensus. The country’s adoption of an idiosyncratic fixed exchange rate regime (the convertibility plan), which became increasingly uncompetitive, together with its failure to achieve effective control over its fiscal accounts, both ran counter to central provisions of the Consensus, and paved the way directly for the ultimate macroeconomic collapse. The market-oriented policies of the early Menem-Cavallo years, meanwhile, soon petered out in the face of domestic political constraints (including Menem’s preoccupation with securing re-election).
In October 1998, the IMF invited Argentine President Carlos Menem, to talk about the successful Argentine experience, at the Annual Meeting of the Board of Governors. President Menem’s Minister of Economy (1991–1996), Domingo Cavallo, the architect of the Menem administration’s economic policies, specifically including “convertibility”, made the claim that Argentina was at that moment, “considered as the best pupil of the IMF, the World Bank and the USA government”:
On the second semester of 1998 Argentina was considered in Washington the most successful economy among the ones that had restructured its debt within the Brady’s Plan framework. None of the Washington Consensus’ sponsors were interested in pointing out that the Argentine economic reforms had differences with its 10 recommendations. On the contrary, Argentina was considered the best pupil of the IMF, the World Bank and the USA government.
The problems which arise with reliance on a fixed exchange rate mechanism (above) are discussed in the World Bank report Economic Growth in the 1990s: Learning from a Decade of Reform, which questions whether expectations can be “positively affected by tying a government’s hands”. In the early 1990s there was a point of view that countries should move to either fixed or completely flexible exchange rates to reassure market participants of the complete removal of government discretion in foreign exchange matters. After the Argentina collapse, some observers believe that removing government discretion by creating mechanisms that impose large penalties may, on the contrary, actually itself undermine expectations. Velasco and Neut (2003) “argue that if the world is uncertain and there are situations in which the lack of discretion will cause large losses, a precommitment device can actually make things worse”. In chapter 7 of its report (Financial Liberalization: What Went Right, What Went Wrong?) the World Bank analyses what went wrong in Argentina, summarizes the lessons from the experience, and draws suggestions for its future policy.
The IMF’s Independent Evaluation Office has issued a review of the lessons of Argentina for the institution, summarized in the following quotation:
The Argentine crisis yields a number of lessons for the IMF, some of which have already been learned and incorporated into revised policies and procedures. This evaluation suggests ten lessons, in the areas of surveillance and program design, crisis management, and the decision-making process.
Mark Weisbrot says that, in more recent years, Argentina under former President Néstor Kirchner made a break with the Consensus and that this led to a significant improvement in its economy; some add that Ecuador may soon follow suit. However, while Kirchner’s reliance on price controls and similar administrative measures (often aimed primarily at foreign-invested firms such as utilities) clearly ran counter to the spirit of the Consensus, his administration in fact ran an extremely tight fiscal ship and maintained a highly competitive floating exchange rate; Argentina’s immediate bounce-back from crisis, further aided by abrogating its debts and a fortuitous boom in prices of primary commodities, leaves open issues of longer-term sustainability. The Economist has argued that the Néstor Kirchner administration will end up as one more in Argentina’s long history of populist governments. In October 2008, Kirchner’s wife and successor as President, Cristina Kirchner, announced her government’s intention to nationalize pension funds from the privatized system implemented by Menem-Cavallo. Accusations have emerged of the manipulation of official statistics under the Kirchners (most notoriously, for inflation) to create an inaccurately positive picture of economic performance. The Economist removed Argentina’s inflation measure from its official indicators, saying that they were no longer reliable.
In 2003, Argentina’s and Brazil’s presidents, Néstor Kirchner and Luiz Inacio Lula da Silva signed the “Buenos Aires Consensus”, a manifesto opposing the Washington Consensus’ policies. Skeptical political observers note, however, that Lula’s rhetoric on such public occasions should be distinguished from the policies actually implemented by his administration. This said, Lula da Silva paid the whole of Brazil’s debt with the IMF two years in advance, freeing his government from IMF tutelage, as did Néstor Kirchner’s government in 2005.
Venezuela

Military response during the Caracazo
One notable instance of unrest against the consensus was the Caracazo in Venezuela in 1989. Carlos Andrés Pérez stated while campaigning for the 1988 Venezuelan general election that the IMF was a “neutron bomb that killed people but left buildings standing”. However after being elected into the presidency, President Andrés Pérez immediately implemented Washington consensus reforms. On the weekend of 25–26 February 1989, gasoline prices doubled while public transportation fares increased thirty percent. The price hikes, along with Andrés Pérez’s opulent spending and corruption, led to widespread looting in Venezuela’s capital Caracas.President Andrés Pérez orders a military crackdown and according to his government, 275 are killed, though the Venezuelan media reports at least 3,000 killed. Shortages of coffins were reported and many Venezuelans had to line up at government food distribution centers since markets were destroyed by rioters. Insurance estimates of damage caused during the rioting were $90 million USD ($120 million CAD) in 1989.
The Caracazo and previous inequality in Venezuela leads to the rise of Hugo Chávez’s Revolutionary Bolivarian Movement-200 and the subsequent 1992 Venezuelan coup d’état attempts. Once elected, Chávez began to withdraw Venezuela from the prescriptions of the Washington consensus.
Criticism
As of the 2000s, several Latin American countries were led by socialist or other left wing governments, some of which—including Argentina and Venezuela—have campaigned for (and to some degree adopted) policies contrary to the Washington Consensus policies. Other Latin American countries with governments of the left, including Brazil, Chile and Peru, in practice adopted the bulk of the policies included in Williamson’s list, even though they criticized the market fundamentalism that these are often associated with.
General criticism of the economics of the consensus is now more widely established, such as that outlined by US scholar Dani Rodrik, Professor of International Political Economy at Harvard University, in his paper Goodbye Washington Consensus,
As Williamson has pointed out, the term has come to be used in a broader sense to its original intention, as a synonym for market fundamentalism or neo-liberalism. In this broader sense, Williamson states, it has been criticized by people such as George Soros and NobelLaureate Joseph E. Stiglitz. The Washington Consensus is also criticized by others such as some Latin American politicians and heterodox economists such as Erik Reinert. The term has become associated with neoliberal policies in general and drawn into the broader debate over the expanding role of the free market, constraints upon the state, and the influence of the United States, and globalization more broadly, on countries’ national sovereignt.
“Stabilize, privatize, and liberalize” became the mantra of a generation of technocrats who cut their teeth in the developing world and of the political leaders they counseled.
Some US economists, such as Joseph Stiglitz and Dani Rodrik, have challenged what are sometimes described as the ‘fundamentalist’ policies of the IMF and the US Treasury for what Stiglitz calls a ‘one size fits all’ treatment of individual economies. According to Stiglitz the treatment suggested by the IMF is too simple: one dose, and fast—stabilize, liberalize and privatize, without prioritizing or watching for side effects.
The reforms did not always work out the way they were intended. While growth generally improved across much of Latin America, it was in most countries less than the reformers had originally hoped for (and the “transition crisis”, as noted above deeper and more sustained than hoped for in some of the former socialist economies). Success stories in Sub-Saharan Africa during the 1990s were relatively few and far in between, and market-oriented reforms by themselves offered no formula to deal with the growing public health emergency in which the continent became embroiled. The critics, meanwhile, argue that the disappointing outcomes have vindicated their concerns about the inappropriateness of the standard reform agenda.
Besides the excessive belief in market fundamentalism and international economic institutions in attributing the failure of the Washington consensus, Stiglitz provided a further explanation about why it failed. In his article “The Post Washington Consensus Consensus”, he claims that the Washington consensus policies failed to efficiently handle the economic structures within developing countries. The cases of East Asian countries such as Korea and Taiwan are known as a success story in which their remarkable economic growth was attributed to a larger role of the government by undertaking industrial policies and increasing domestic savings within their territory. From the cases, the role for government was proven to be critical at the beginning stage of the dynamic process of development, at least until the markets by themselves can produce efficient outcomes.
The policies pursued by the international financial institutions which came to be called the Washington consensus policies or neoliberalism entailed a much more circumscribed role for the state than were embraced by most of the East Asian countries, a set of policies which (in another simplification) came to be called the development state.
The critique laid out in the World Bank’s study Economic Growth in the 1990s: Learning from a Decade of Reform (2005) shows how far discussion has come from the original ideas of the Washington Consensus. Gobind Nankani, a former vice-president for Africa at the World Bank, wrote in the preface: “there is no unique universal set of rules…. [W]e need to get away from formulae and the search for elusive ‘best practices’….” The World Bank’s new emphasis is on the need for humility, for policy diversity, for selective and modest reforms, and for experimentation.
The World Bank’s report Learning from Reform shows some of the developments of the 1990s. There was a deep and prolonged collapse in output in some (though by no means all) countries making the transition from communism to market economies (many of the Central and East European countries, by contrast, made the adjustment relatively rapidly). Academic studies show that more than two decades into the transition, some of the former communist countries, especially parts of the former Soviet Union, had still not caught up to their levels of output before 1989. A 2001 study by economist Steven Rosefielde posits that there were 3.4 million premature deaths in Russia from 1990 to 1998, which he party blames on the shock therapy imposed by the Washington Consensus.Neoliberal policies associated with the Washington Consensus, including pension privatization, the imposition of a flat tax, monetarism, cutting of corporate taxes, and central bank independence, continued into the 2000s. Many Sub-Saharan African’s economies failed to take off during the 1990s, in spite of efforts at policy reform, changes in the political and external environments, and continued heavy influx of foreign aid. Uganda, Tanzania, and Mozambique were among countries that showed some success, but they remained fragile. There were several successive and painful financial crises in Latin America, East Asia, Russia, and Turkey. The Latin American recovery in the first half of the 1990s was interrupted by crises later in the decade. There was less growth in per capita GDP in Latin America than in the period of rapid post-War expansion and opening in the world economy, 1950–80. Argentina, described by some as “the poster boy of the Latin American economic revolution”, came crashing down in 2002.
A significant body of economists and policy-makers argues that what was wrong with the Washington Consensus as originally formulated by Williamson had less to do with what was included than with what was missing. This view asserts that countries such as Brazil, Chile, Peru and Uruguay, largely governed by parties of the left in recent years, did not—whatever their rhetoric—in practice abandon most of the substantive elements of the Consensus. Countries that have achieved macroeconomic stability through fiscal and monetary discipline have been loath to abandon it: Lula, the former President of Brazil (and former leader of the Workers’ Party of Brazil), has stated explicitly that the defeat of hyperinflation was among the most important positive contributions of the years of his presidency to the welfare of the country’s poor, although the remaining influence of his policies on tackling poverty and maintaining a steady low rate of inflation are being discussed and doubted in the wake of the Brazilian Economic Crisis currently occurring in Brazil.
These economists and policy-makers would, however, overwhelmingly agree that the Washington Consensus was incomplete, and that countries in Latin America and elsewhere need to move beyond “first generation” macroeconomic and trade reforms to a stronger focus on productivity-boosting reforms and direct programs to support the poor. This includes improving the investment climate and eliminating red tape (especially for smaller firms), strengthening institutions (in areas like justice systems), fighting poverty directly via the types of Conditional Cash Transfer programs adopted by countries like Mexico and Brazil, improving the quality of primary and secondary education, boosting countries’ effectiveness at developing and absorbing technology, and addressing the special needs of historically disadvantaged groups including indigenous peoples and Afro-descendant populations across Latin America.
In a book edited with future president of Peru, Pedro Pablo Kuczynski in 2003, John Williamson laid out an expanded reform agenda, emphasizing crisis-proofing of economies, “second-generation” reforms, and policies addressing inequality and social issues.[11]
Anti-globalization movement
Many critics of trade liberalization, such as Noam Chomsky, Tariq Ali, Susan George, and Naomi Klein, see the Washington Consensus as a way to open the labor market of underdeveloped economies to exploitation by companies from more developed economies. The prescribed reductions in tariffs and other trade barriers allow the free movement of goods across borders according to market forces, but labor is not permitted to move freely due to the requirements of a visa or a work permit. This creates an economic climate where goods are manufactured using cheap labor in underdeveloped economies and then exported to rich First World economies for sale at what the critics argue are huge markups, with the balance of the markup said to accrue to large multinational corporations. The criticism is that workers in the Third World economy nevertheless remain poor, as any pay raises they may have received over what they made before trade liberalization are said to be offset by inflation, whereas workers in the First World country become unemployed, while the wealthy owners of the multinational grow even more wealthy.
Despite macroeconomic advances, poverty and inequality remain at high levels in Latin America. About one of every three people—165 million in total—still live on less than $2 a day. Roughly a third of the population has no access to electricity or basic sanitation, and an estimated 10 million children suffer from malnutrition. These problems are not, however, new: Latin America was the most economically unequal region in the world in 1950, and has continued to be so ever since, during periods both of state-directed import-substitution and (subsequently) of market-oriented liberalization.
Some socialist political leaders in Latin America have been vocal and well-known critics of the Washington Consensus, such as the late Venezuelan President Hugo Chávez, Cuban ex-President Fidel Castro, Bolivian President Evo Morales, and Rafael Correa, President of Ecuador. In Argentina, too, the recent Justicialist Party government of Néstor Kirchner and Cristina Fernández de Kirchner undertook policy measures which represented a repudiation of at least some Consensus policies.
Proponents of the “European model” and the “Asian way”
Some European and Asian economists suggest that “infrastructure-savvy economies” such as Norway, Singapore, and China have partially rejected the underlying Neoclassical “financial orthodoxy” that characterizes the Washington Consensus, instead initiating a pragmatist development path of their own[66] based on sustained, large-scale, government-funded investments in strategic infrastructure projects: “Successful countries such as Singapore, Indonesia, and South Korea still remember the harsh adjustment mechanisms imposed abruptly upon them by the IMF and World Bank during the 1997–1998 ‘Asian Crisis’ What they have achieved in the past 10 years is all the more remarkable: they have quietly abandoned the Washington Consensus by investing massively in infrastructure projects this pragmatic approach proved to be very successful”.
While opinion varies among economists, Rodrik pointed out what he claimed was a factual paradox: while China and India increased their economies’ reliance on free market forces to a limited extent, their general economic policies remained the exact opposite to the Washington Consensus’ main recommendations. Both had high levels of protectionism, no privatization, extensive industrial policies planning, and lax fiscal and financial policies through the 1990s. Had they been dismal failures they would have presented strong evidence in support of the recommended Washington Consensus policies. However they turned out to be successes. According to Rodrik: “While the lessons drawn by proponents and skeptics differ, it is fair to say that nobody really believes in the Washington Consensus anymore. The question now is not whether the Washington Consensus is dead or alive; it is what will replace it”.
Rodrik’s account of Chinese or Indian policies during the period is not universally accepted. Among other things those policies involved major turns in the direction of greater reliance upon market forces, both domestically and internationally.
Subsidies for agriculture
The Washington Consensus as formulated by Williamson includes provision for the redirection of public spending from subsidies (“especially indiscriminate subsidies”) toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment. This definition leaves some room for debate over specific public spending programs. One area of public controversy has focused on the issues of subsidies to farmers for fertilizers and other modern farm inputs: on the one hand, these can be criticized as subsidies, on the other, it may be argued that they generate positive externalities that might justify the subsidy involved.
Some critics of the Washington Consensus cite Malawi’s experience with agricultural subsidies, for example, as exemplifying perceived flaws in the package’s prescriptions. For decades, the World Bank and donor nations pressed Malawi, a predominantly rural country in Africa, to cut back or eliminate government fertilizer subsidies to farmers. World Bank experts also urged the country to have Malawi farmers shift to growing cash crops for export and to use foreign exchange earnings to import food. For years, Malawi hovered on the brink of famine; after a particularly disastrous corn harvest in 2005, almost five million of its 13 million people needed emergency food aid. Malawi’s newly elected president Bingu wa Mutharika then decided to reverse policy. Introduction of deep fertilizer subsidies (and lesser ones for seed), abetted by good rains, helped farmers produce record-breaking corn harvests in 2006 and 2007; according to government reports, corn production leapt from 1.2 million metric tons in 2005 to 2.7 million in 2006 and 3.4 million in 2007. The prevalence of acute child hunger has fallen sharply and Malawi recently turned away emergency food aid.
In a commentary on the Malawi experience prepared for the Center for Global Development, development economists Vijaya Ramachandran and Peter Timmer argue that fertilizer subsidies in parts of Africa (and Indonesia) can have benefits that substantially exceed their costs. They caution, however, that how the subsidy is operated is crucial to its long-term success, and warn against allowing fertilizer distribution to become a monopoly. Ramachandran and Timmer also stress that African farmers need more than just input subsidies—they need better research to develop new inputs and new seeds, as well as better transport and energy infrastructure. The World Bank reportedly now sometimes supports the temporary use of fertilizer subsidies aimed at the poor and carried out in a way that fosters private markets: “In Malawi, Bank officials say they generally support Malawi’s policy, though they criticize the government for not having a strategy to eventually end the subsidies, question whether its 2007 corn production estimates are inflated and say there is still a lot of room for improvement in how the subsidy is carried out”.
Alternative usage vis-à-vis foreign policy
In early 2008, the term “Washington Consensus” was used in a different sense as a metric for analyzing American mainstream media coverage of U.S. foreign policy generally and Middle East policy specifically. Marda Dunsky writes, “Time and again, with exceedingly rare exceptions, the media repeat without question, and fail to challenge the “Washington consensus”—the official mind-set of US governments on Middle East peacemaking over time.” According to syndicated columnist William Pfaff, Beltway centrism in American mainstream media coverage of foreign affairs is the rule rather than the exception: “Coverage of international affairs in the US is almost entirely Washington-driven. That is, the questions asked about foreign affairs are Washington’s questions, framed in terms of domestic politics and established policy positions. This invites uninformative answers and discourages unwanted or unpleasant views.” Like the economic discussion above the foreign policy usage of the term has less to do with what is included than with what is missing.
A similar view, though by a different name, is taken by Fairness & Accuracy in Reporting (FAIR), a progressive media criticism organization. They note “Official Agendas” as one of nine ‘issue areas’ they view as causing ‘What’s Wrong With the News?” They note: “Despite the claims that the press has an adversarial relationship with the government, in truth U.S. media generally follow Washington’s official line. This is particularly obvious in wartime and in foreign policy coverage, but even with domestic controversies, the spectrum of debate usually falls in the relatively narrow range between the leadership of the Democratic and Republican parties.

Uta-Daniel Nneoma Blossom
2017/249592
Economics

The Washington consensus is really helpful when it comes to economy development but then when there is corruption and mismanagement it doesn’t seem to work

NAME: OKONKWO FAITH MUNACHI
REG NO: 2017/242422
E-MAIL: faith.okonkwo.242422@unn.edu.ng

ANSWER:
WASHINGTON CONSENSUS: DOES IT APPLY IN NIGERIA?
The term “Washington Consensus” was coined in 1989 by the famous Economist, John Williamson. The concept was in reference to a set of ten(10) market-oriented policies that were popular among Washington-based policy institutions, as policy prescriptions for improving economic performance in Africa, Asia and Latin American countries. The Washington Consensus refers to a set of free-market economic policies supported by prominent financial institutions such as the International Monetary Fund, the World Bank, and the U.S. Treasury. These are the ten specific principles originally set out by John Williamson in 1989:
1. Low government borrowing. The idea was to discourage developing economies from having high fiscal deficits relative to their GDP.
2. Diversion of public spending from subsidies to important long-term growth supporting sectors like primary education, primary healthcare, and infrastructure.
3. Implementing tax reform policies to broaden the tax base and adopt moderate marginal tax rates.
4. Selecting interest rates that are determined by the market. These interest rates should be positive after taking inflation into account (real interest rate).
5. Encouraging competitive exchange rates through freely-floating currency exchange.
6. Adoption of free trade policies. This would result in the liberalization of imports, removing trade barriers such as tariffs and quotas.
7. Relaxing rules on foreign direct investment.
8. The privatization of state enterprises. Typically, in developing countries, these industries include railway, oil, and gas.
9. The eradication of regulations and policies that restrict competition or add unnecessary barriers to entry.
10. Development of property rights.
Generally, these policies centered on fiscal discipline, redirecting public expenditure, tax reform, financial liberalization, adoption of a single, competitive exchange rate, trade liberalization, elimination of barriers to foreign direct investment, privatization of state-owned enterprises especially in developing countries.
The consensus was supposed to help improve the Nigeria economy like it has done in other countries but other political and economic problems in Nigeria retarded the effects of these policies in Nigeria. This is mainly due to the fact that there is poor implementation of these policies. Like obviously, we have all these excellent, mouthwatering polices that are very much making a lot of sense, but the issue with this country is the poor implementation of these policies. The body with which would be saddled with the responsible of discharging these duties could be either not discharging them at all or not effectively and efficiently carrying them out as stated.

The Washington Consensus would not even work in our economy because of reasons such as political instability and poor execution of policies. One thing is to make policies and another is to make sure the policies are functioning. Since the policies in Nigeria are not usually functioning, the Washington consensus would not help the Nigerian economy grow since it’s not been executed. Also, the lack of consistency and the politicians’ greed are among the causes of the problems in the economy.

Name: Mmadu Joy Ukamaka
Dept: Economics
Reg No: 2017/249528
email:joymmadu5@gmail.com

How the prescriptions of the Washington’s Consensus has been able to help Nigeria

From my observation on the outlined prescriptions, the Washington’s Consensus has been able to help Nigeria in some aspects which they have inculcated what was prescribed but even at that due to the corrupt nature of the country most of the prescriptions were not able to be implemented and this has contributed to our state of underdevelopment.
However, starting with the Fiscal discipline which has to do with the wise spending of the government, Nigeria has failed to embrace discipline in the government expenditure
Nigeria’s potential for growth and poverty reduction is yet to be realized. A key constraint has been the recent conduct of macroeconomics, particularly fiscal and monetary policies. This has led to rising inflation and decline in real incomes. National economic management became a Herculean task as the economy has to contend with volatility of revenue and expenditure. The widespread lack of fiscal discipline was further exacerbated by poor co-ordination of fiscal policy among the three tiers of government. Also, there is a weak revenue base arising from high-marginal tax rate with very narrow tax base, resulting in low tax compliance. As a result of these and other factors, serious macroeconomic imbalances have emerged in Nigeria. A review of these macroeconomic indices shows that inflation has accelerated to double- digit levels in 2000 and 2001. It increased from 6.94 to 18.87,respectively. This double-digit inflation continued up to 2005, and decreased to single digit in 2006 and 2007. In 2008, the inflation rate reverted to double digit (11.58) and continued to increase, and in 2010, it was 13.72%(International Monetary Fund [IMF], 2011). Unemployment is a major political and economic issue in most countries. In Nigeria, the years of corruption, civil war, military rule, and mismanagement have hindered economic growth of the country.
Redirection of public spending fro subsidies (“especially indiscriminate subsidies”) toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment; however, the government spending on infrastructure in Nigeria seems to be a waste of scarce resources
and to the detriment of the taxpayers because the growth in the economy does not physically depict infrastructural development. For example, Nigeria
has failed in producing electricity nationwide. Food is costly. Drinkable water is scarce in many areasof the country. Moreover, the wellness statistics, such as poverty rates, are high.
Privatization of State owned Enterprise: In 1986, the inefficiency of state owned
enterprises became the launching pad of a global programme – Structural
Adjustment Programme (SAP) with the main objective of ensuring efficient and
effective resource allocation and utilization in Nigeria. Privatization was
then adopted to achieve this objective and formed an integral part of the SAP.
A positive effect of privatization in Nigeria, is the increase in the number
of companies listed on the Nigerian Stock Exchange by privatizing through
public offering and the attendant increments in public participation in
capital market activities. It is important to note that the Capital Market plays a
significant role and serves as a facilitator and stimulant for socioeconomic growth and
development through the mobilization of long-term funds.
Property Right for the informal Sector: In a 2014 report monitoring street vending, WIEGO suggested urban planners and local economic development strategists study the carrying capacity of areas regularly used by informal workers and deliver the urban
infrastructure necessary to support the informal economy, including running water and toilets, street lights and regular electricity, and adequate shelter and storage facilities.That study also called for basic legal rights and protections for informal workers, such as appropriate licensing and permit practices.
Liberalization of Inward Foreign Investment: Nigeria has been attracting strong inflows from American companies, including giants like Uber, and Facebook, as well as Emergent Payments, and Meltwater Group. China has also been investing considerably in the country, mainly in the textile, automotive and aerospace industries.
Trade Liberalization: The study carried out to examine the effects trade liberalisation will have on poverty in Nigeria using a Dynamic Computable General Equilibrium Model to analyse this issue has shown that the positively affected sectors are capital intensive therefore capital income improves over time while land and labour income reduce. This has positive implications for urban households and negative for rural households due to the dependence of the later on mostly land and labour income. As a result, urban poverty decreases in the short and long run while rural poverty increases in both periods. For trade liberalization to have a pro-poor effect, policies to improve the agricultural sector will have to be implemented before or concurrently with it. In this way the rural areas which obtain most of their income from this sector will respond more positively to trade liberalization.

OKOYE OBINNA CHIDIEBERE
2014/191864
ECONOMICS

The Washington Consensus refers to a set of broadly free market economic ideas, supported by prominent economists and international organisations, such as the IMF, the World Bank, the EU and the US. All shared the view, typically labelled neoliberal, that the operation of the free market and the reduction of state involvement were crucial to development in the global South.

The policy recommendations could have been a good means of bringing about a great turn around for Nigeria, but the huge flaws and incompetence of the Government has led to her stagnation. There is poor implementation and application of these policies as a result of poor leadership and incompetence of the body responsible for discharging these policies. The Nigeria Government is amongst others, characterized by Corruption, political instability, and fiscal irresponsibility. Our Government is characterized by self ambitious and greedy leaders who misappropriate and embezzles funds. Fiscal discipline would only be a “dream”, as the Government keeps spending (unnecessarily) above her “revenue ” and end up in debt. Unaccountability has become their identity.
We find favouritism and inequality play out explicitly, as the rich keep getting richer and the poor keep getting poorer. The Nigeria Government obviously do not have the interest of her citizens at heart, and therefore Could not have fully Implemented these reforms.

Also, political instability also contribute to the inability of the policies to be properly implemented because a new government can come into power and change the policies of the previous government. The present government can kick start the implementation of a policy reforms and be abandoned by the next government when it’s effect has not started it’s work in the economy thereby making the Economy miss out from such reform polices like the Washington Consensus.

Among many other problems, to solve the problems of poor policy implementation and the problems of Nigeria as a whole, there should be a presence of a stable, transparent, accountable government and sociopolitical environment with a focus on pro-poor policies was an essential ingredient in implementing successful reforms.

Francis Chibuezem David
2017/241445
francischibuezem247@gmail.com
The washington consensus is a very good set of reforms or recommendation that could build up and speed up the development of most developing countries if they had good governance.
The washington consensus took time to settle the financial and even infrastructural problems of developing countries with very good solutions, but this is not enough. Using Nigeria as an example, fiscal discipline has been partially followed to combat deficit, but that has not exactly stopped us from running into a recession. Just like this policy, many others have been practiced but yet without a substantial result.
So can these policy reforms help Nigeria? Yes it can, but Has it helped Nigeria? No it hasn’t. Because if it has, Nigeria would have been far better off than than where they are now. Now the question is Why is this so? What is really Nigeria’s problem? In a statement, I’ll call bad governance. This single statement is really a wide one but I’ll explain using the arms of government (Executive, Legislature, Judiciary)
The executive arm of government has the responsibility of implementing laws and enforcing these laws but corrupt officials have chosen to rather bend the laws to suit their taste and selfish desires, thereby causing the nation to suffer because they want what’s best for themselves alone. No Nation can make progress with such misconduct.
The legislative arm is in charge of law and policy making, infact they are the ones meant to add those policy reforms into the country’s policy but policies get enacted through lobbying, tribalistic and religious sentiments and other wrong reasons different from the interest of the nation and her people.
The Judiciary who is in charge of interpreting the law and sanctioning offenders are now infiltrated by bribery and corruption where offenders and law breakers have their way as long as they have some money to give and this is not meant to be.
In summary the washington consensus is a very good set of policy reforms majorly for financial and infrastructural restructure, but Nigeria needs far more than that, a good government will be starting point for this country.

Name: Ifetayo Kosi Anwoluwa
Reg no: 2017/249343
Department: Economics
The Washington Consensus is a set of ten economic policy prescriptions considered to constitute the “standard” reform package promoted for crisis-wracked developing countries by Washington, D.C.-based institutions such as the International Monetary Fund (IMF), World Bank and United States Department of the Treasury. The Washington Consensus refers to a set of broadly free market economic ideas, supported by prominent economists and international organisations, such as the IMF, the World Bank, the EU and the US. The Washington consensus was important for determining policy towards economic development in Latin America, South East Asia and other countries.
Some implications of the Washington consensus.
1. Support of free trade through WTO and NAFTA reduce tariff barriers.
2. IMF bailouts tended to involve free market reforms as a condition of receiving money.
3. Belief in free trade suggests countries, should specialise in goods/services where they have a comparative advantage. This may mean developing economies need to stick with producing primary products.
Criticisms of the Washington Consensus
1. Strategic trade theory. Some economists argue that free trade is not always in the best interest of developing economies. A strict adoption of free trade and comparative advantage can leave developing economies producing low-income growth and volatile priced primary products. If countries promoted new industries, it might require both selective tariffs on cheap imports and also government subsidies. For example, the Brazilian government’s support and development of Embraer, helped Brazil become successful in airline manufacturing.
2. Low government borrowing is not always appropriate. Implementing fiscal rules can cause unnecessary economic hardship if the government cuts spending at an inappropriate time. For example, fiscal consolidation during the great recession has caused low growth rates, and a failure to reduce debt to GDP ratios. If governments are pressured to cut spending it can also cause welfare support programmes to be hit, increasing poverty. However, in the long term, most economists would suggest it is prudent to reduce structural borrowing to manageable levels.
3. The Chinese approach. An interesting development in recent years is that Chinese firms have invested substantial sums in developing economies, such as Africa and Latin America. An FT report, suggests China has lent $110 bn to developing countries in past two years – more than the World Bank. The interesting thing about the Chinese approach is that it involves substantial investment in infrastructure and public sector investment – showing that for economic development, an interventionist approach can have a bigger return than leaving it to free markets.
4. Problems of privatisation. Privatisation can increase efficiency and improve the quality of the product/service. However, for key public sector industries, privatisation may mean companies ignore wider social objectives. For example, in the 1990s, under World Bank pressure, Bolivia privatised its water industry. But, this led to water supplies being cut off from the poorest members of society. (politics of water in Bolivia at the Nation).

Izuchukwu Dominic Chinedu
2017/249522
The Washington Consensus, a term coined by John Williamson, identified a set of policy reforms which are popular among policymakers in the Washington DC. These policies, though they sound pleasant, didn’t take into consideration the peculiarities of the developing nations for whom they were made. These people are not in our shoes, they prepared the policies based on what they think will solve the problem of under development in Africa, Asia and Latin America (if at all their intentions were genuine)
Although, some of these policies(for example property right protection, liberalization of FDI, fiscal discipline, tax reforms) when properly implemented and managed yield the desired results. Some (like trade liberalization and privatization) on the other hand need some modifications.
I strongly believe that some of the policies in this Washington Consensus are part of our problem here in Nigeria.
Trade liberalization for instance includes policy measures to increase trade openness and trade openness is usually consider as an increase in the size of a country’s trade sector in relation to total output. This trade liberalization is in sharp contrast with the infant industry argument. The infant industry argument is an economic rationale for trade protectionism. The core of the argument is that infant industries often do not have the economies of scale that their older competitors from other countries may have and thus need to be protected until they can attain similar economies of scale. Trade protectionism has been a useful tool to the developed nations.
The United States of America practiced protectionism in the 19th century and it worked perfectly well for them. Coming to 20th century, the same United States of America and their policymakers adviced us to embrace trade liberalization. This alone is enough to show that there is something fishy about that consensus.
Nigerian government in August, 2019 closed her land border because of some reasons associated with smuggling of arms, importation of rice, transshipment etc. During this period, domestic producers of rice exploited their potential capacity to produce. If this should continue over a given period of time, domestic rice producers must have grown fit enough to feed the nation and have surplus for export.
Partial Autarky is necessary if a nation must experience rapid growth in the industrial sector. Partial because no man is an island. No nation is self-sufficient and so there is a need for international trade but a regulated one.
Again, privatization which is converting state owned enterprises to private hands is targeted to create efficiency. Nigeria had recorded some success in this aspect but in some cases, a total mess.
In 2013, the Nigerian power sector was privatised. Immediately it became clear that privatization would be no quick fix of the problem. Just in the very first month after the handover, the sector recorded decline in the generation of power.
Even the senate president Ahmed Lawan once said, ”I think the privatisation of the power sector has not worked. It has failed because the essence of privatization is to create efficiency”.
In African countries, the Washington Consensus inspired market-based reforms prescribed by international financial institutions (IFIs) like the World Bank and the International Monetary Fund (IMF), under “structural adjustment programs” (SAP). These reforms were often prerequisites for financial assistance to indebted African countries during the global recession and debt crisis of the 1980s, when the external debt rose sharply to unsustainable levels.
The story of how African countries got into a debt crisis that led to the introduction of structural adjustment programs is often told as follows: first, expansionary fiscal spending aimed at economic development spearheaded by newly independent African governments, struggling to recover from the ravages of European colonialism, increased government spending in the 1960s and 1970s. Governments also borrowed significantly to finance development expenditures over this time. Oil price shocks that significantly decreased the price of oil in 1980s led to declines in export revenue for many governments. This decline in export revenue, along with a collapse in world prices of primary agricultural commodities, which made up 88 percent of Africa’s exports, resulted in a shortfall in revenue that put enormous pressure on governments’ finances.
They know full well these problems and the only way they think they can help us is by giving us policies. When they see that this consensus is not working, why not find another way to help a country like Nigeria that specializes in exporting primary goods to add value to these raw materials and make much out of it.
I think it’s high time we learn our lessons, we shouldn’t blindly accept and implement everything in that consensus. We need to modify them in a way that will help our economy grow.

Name: Okwuchie Amos
Reg. no: 2017/249562
Dept: Economics
Email: okwuchieamos@gmail.com

EFFECT OF WASHINGTON CONCENSUS IN NIGERIA.

Some of the key policy reforms of the Washington Consensus/SAP period of the 1980s and 1990s included privatization, fiscal discipline, and trade openness, that were introduced by IFIs as conditions for debt relief to highly indebted, economically constrained African countries. The expectation was that market-oriented reforms would correct domestic policy-induced distortions in prices, such as overvalued exchange rates, subsidies that led to artificially low agricultural commodity prices, high wage rates, low interest rates, and subsidized agricultural input prices, which introduced inefficiencies in resource allocation, worsening shortages and reducing economic output. Several African countries adopted these policies, often under conditionality, in the 1980s and 1990s. Most early literature finds that the policies failed to improve economic conditions in these countries as the politics of IFI conditionality worked to undermine the role of local ownership in shaping domestic economic policy. In addition, reductions in government spending often reduced spending on pro-poor programs, and the removal of agricultural subsidies made it difficult for African farmers to compete on international markets. The results were increased unemployment and sociopolitical unrest in several African countries over this period. More recent literature has highlighted that reforms were successful in improving economic growth when policymakers had the state capacity to implement them, and when, crucially, reforms were paired with pro-poor policies, spearheaded by governments.

SUMMARY
In sum, we can agree that the prescription of the Washington consensus would have been the best reform that will bring the development that is sought after by the developing nation.
But our problem lies on the nature of government and her leadership style.
First, bad leadership. The arrogant and insensitive leaders that we have have made it difficult for us to achieve that which the concensus aimed at.
Again, corruption. A corrupt nation hardly achieve it’s goal because instead of pursuing that which can give them what they need, they keep embezzling and looting money that is meant to implement certain government policy.
On the other hand, l don’t care attitude of followers. Most of the citizens don’t contribute to the issue in the society. They live as if it doesn’t concern them. This makes the nation to keep going back because no tangible opinion is made to move it forward by her citizens.

Mr President, l think this prescribed policy would have helped in great way but the aforementioned problem is holding us back.
Thank you!

The Washington consensus formulated in 1989 by John Williamson has helped Nigerian economy and also not helped the economic Nigeria in other ways . Free trade policy under the consensus, is not encouraging for infant firms in the country as this will cause them to leave the market quickly due to competition across borders. As to the privatisation of government owned business, this has helped the economy so far . This is seen the privatisation of the power supply industry in Nigeria, I would say the sector has done better in private hands than in the hands of the government. It promoted quality and reliability. Nigeria has no where achieved low government borrowing under the Washington consensus. Year in year out our debts continue to rise due to increased expenditure. And we can’t borrow less because then this will affect the productivity of the economy. Most of the points under the consensus I would say it will take a while for the economy to achieve those .

Njoku Theddeus o
2017/241028
Education Eco

The debate on economic policy has developed significantly in the past decade. The so-called Washington Consensus, which dictated most of the solutions proposed by international financial organizations, began to be questioned when a large number of emerging economies reduced their reliance on multilateral debt. The crisis of 2008 and 2009 accelerated the process of reflection on the prescriptive nature of the policy proposals advocated by monetarists, with their insistence on a uniform view as if all situations were alike. This has been termed ideology, and the ideology associated with the Washington Consensus has failed even in its methodological principles, as clearly demonstrated by the internal debate within organizations such as the International Monetary Fund and the World Bank. This article reviews the various internal arguments of the international financial organizations, and provides a critique of preconstructed models involving a return to Keynesian economics. It ends with an optimistic view of the broadening and democratization of the debate on economic policies, termed the new post-Washington Consensus.

Okoye Felix Onyekachi
2017/241446
Felix.okoye.241447@unn.edu.ng

The Washington consensus is a set of policy prescriptions put forward by the Washington-based financial institutions and were recommended for the less-developed countries. This set of policies as believed by the proponents would help transform the economic outlook of most of the developing countries and prepare them for take-off into self-sustaining growth.
Sadly and despite much of the hype which accompanied this policies at the time they were formulated in the late eighties and early nineties, this set of policies has not yielded the expected result in some developing countries especially Nigeria. The arguments below could explain why this set of policies has not yielded positive result in Nigeria :
First, Nigeria’s political economy is bedevilled by pervasive corruption. This inherent corruption in Nigeria’s political system has been a great obstacle to achieving any developmental project carried out by the government in Nigeria. For example the first among the set of policies that constitute the Washington consensus advocates for fiscal policy discipline with avoidance of large fiscal deficit relative to GDP. But in Nigeria, this rule has been violated with reckless abandon as funds which are supposed to be invested in the critical sectors of the economy such as the railways, education etc often end up not being accounted for. The country’s debt profile over the years has been piling up and sadly this borrowed funds end up being looted.
Second, these neo-liberal policies which centers on trade liberalisation, market-oriented economy and privatisation might have negatively affected Nigeria’s economy. This is because, apart from Nigeria, a lot of economies which applied the IMF and World Bank prescriptions experienced retarded growth. For instance, a study carried out by Nwafor and Ononibu (2018) shows that Sub-saharan African countries experienced increasing unemployment rates, retarded GDP growth rate, declining exports, declining agricultural output, declining investment in the 1980’s and 1990’s after adopting the World Bank and IMF policies. Within this period also, Africa’s quota to world export declined significantly. In comparison, some countries in the East Asia and Pacific which did not adopt this policies fared much better. This drawbacks could have resulted from lack of managerial expertise on the part of the implementing countries nonetheless.

Name: Nnadi Chinwe Monica
2Reg. No. : 2017/241532
Blog: Chiebest.blogspot.com
E-mail: chinwe.nnadi.241532@unn.edu.ng
Dept: Education Economics

Washington Consensus: has it helped Nigeria? And what is the problem of Nigeria?

My view:

The policy of Washington Consensus has helped Nigeria as a developing country but the impact hasn’t been so much felt due to incompetence of the implementing body and the flauntuation in the political system where by every regime will not continue with the existing project(s) but starting a new one which might not be completed till the end of the regime.
The major problem of Nigeria is corruption, incompetency and political flauntuation.

NAME: UMELO CHIDERA NICOLE
REGISTERATION NUMBER: 2017/249589
MAIL: nicoleumelo@gmail.com
Personally, I believe the Washington consensus failed because it was no adapted for use in developing countries. it was made to fit into the economic system of latin America, and not that of developing countries. however, Nigeria still lacks in development due to problems including:
1. corruption
2. poor governance
3. illiteracy
4. inability to fashion models for Nigeria itself
5. political instability

MADUKO MAUREEN ADAEZE
2017/249049
ECONOMICS DEPARTMENT

The Washington consensus was originated by John Williamson in 1989 and the policies are as follows:
1.Low government borrowing. The idea was to discourage developing economies from having high fiscal deficits relative to their GDP.
2.Diversion of public spending from subsidies to important long-term growth supporting sectors like primary education, primary healthcare, and infrastructure.
3.Implementing tax reform policies to broaden the tax base and adopt moderate marginal tax rates.
4.Selecting interest rates that are determined by the market. These interest rates should be positive after taking inflation into account (real interest rate).
5.Encouraging competitive exchange rates through freely-floating currency exchange.
6.Adoption of free trade policies. This would result in the liberalization of imports, removing trade barriers such as tariffs and quotas.
7.Relaxing rules on foreign direct investment.
8.The privatization of state enterprises. Typically, in developing countries, these industries include railway, oil, and gas.
9.The eradication of regulations and policies that restrict competition or add unnecessary barriers to entry.
10.Development of property rights.

The truth is, Nigeria’s problems are beyond the implementation of these policies. The ability to implement pro-poor policies alongside market-oriented reforms plays a central role in successful policy performance. A stable government and sociopolitical environment with a focus on pro-poor policies is an essential ingredient in implementing successful reforms. However, this is not the case with Nigeria. Most institutions are weak. Corruption exist even at the lowest level of governance. Tribalism and nepotism have eaten deep into the fabrics of the average Nigerian. All these problems, and innumerable others, have to be tackled before the Washington Consensus prescriptions will eventually make significant impacts in Nigeria.

The Washington consensus was originated by John Williamson in 1989 and they are as follows
1.Low government borrowing. The idea was to discourage developing economies from having high fiscal deficits relative to their GDP.
2.Diversion of public spending from subsidies to important long-term growth supporting sectors like primary education, primary healthcare, and infrastructure.
3.Implementing tax reform policies to broaden the tax base and adopt moderate marginal tax rates.
4.Selecting interest rates that are determined by the market. These interest rates should be positive after taking inflation into account (real interest rate).
5.Encouraging competitive exchange rates through freely-floating currency exchange.
6.Adoption of free trade policies. This would result in the liberalization of imports, removing trade barriers such as tariffs and quotas.
7.Relaxing rules on foreign direct investment.
8.The privatization of state enterprises. Typically, in developing countries, these industries include railway, oil, and gas.
9.The eradication of regulations and policies that restrict competition or add unnecessary barriers to entry.
10.Development of property rights.

The truth is, Nigeria’s problems are beyond the implementation of these policies. The ability to implement pro-poor policies alongside market-oriented reforms plays a central role in successful policy performance. A stable government and sociopolitical environment with a focus on pro-poor policies is an essential ingredient in implementing successful reforms. However, this is not the case with Nigeria. Most institutions are weak. Corruption exist even at the lowest level of governance. Tribalism and nepotism have eaten deep into the fabrics of the average Nigerian. All these problems, and innumerable others, have to be tackled before the Washington Consensus prescriptions will eventually make significant impacts in Nigeria.

UGWU PERPERTUA ODINAKA
2017/244848
EDUCATION/ ECONOMICS
everlastinggift9507@gmail.com
ugwuodinakap.blogspot.com
ECO 362

THE EFFECTS OF THE WASHINGTON CONSENSUS IN THE NIGERIAN LABOUR MARKET
Deincentivizes Production: Trade liberalization makes the Nigerian economy dependent on imports to the point of absurdity. We import toothpicks and handkerchiefs. Because of this few venture capitalists are willing to take on the hard work of manufacturing goods moreso in a polity lacking infrastructural basics.
Sensitivity to Exchange Rates: This is a direct result of trade liberalization. When an economy heavily depends on foreign imports then devaluation of its currency pushes inflation. This is less true of countries with a favorable balance of trade. The recent glut in oil prices has adversely affected Nigeria’s income and made the dollar scarce driving its price up. This spilled over into locally-made goods like food, drinks etc since Nigerians depend heavily on imports example phones. Of course, jobs were lost in the ensuing recession.
Fiscal Discipline Hard to Enact: Fiscal deficits are almost impossible to avoid in Nigeria’s current administrative setup. All states with very few exceptions like Lagos rely heavily on the federal government to fund their economies. The bulk of funds are always wasted in recurrent expenditure. Not to mention a culture of corruption which makes it impossible.
Skyrocket Inflation: Indeed indiscriminate subsidies are unwanted but the subsidies Nigerians enjoy are well-deserved given an inept govt. For instance, one would think the fuel subsidy is indiscriminate. It isn’t. That more or less is what keeps inflation in the country from skyrocketing. Unlike developed countries, Nigeria and other developing countries rely heavily on fuel for transport and power.
Tax Reform Is Crucial to Nigeria’s Development: This is one of the few positives of the Washington consensus. The Nigerian government has gorged blindly on unstable petrodollars whilst ignoring the more reliable source of funds taxes are. This policy has shown remarkable success in Lagos and to lesser extent Edo and Ogun states which aggressively implemented it. Broad based tax reforms gave the government a wider, more stable pool of funds. In Lagos its success is such that the state can undertake huge projects like the Metroline Railway project to connect major towns by rail without needing FG funds.
In my own opinion, some of the Washington Consensus prescriptions such as Tax reform helped Nigeria while many other Washington prescriptions such as liberalization, fiscal adjustment, left Nigeria in overdependence on imports and wastage of resources.

KEY LESSONS FROM THE WASHINGTON CONSENSUS REFORMS IN AFRICA\NIGERIA
Economist John Williamson coined the term “Washington Consensus” in 1989, in reference to a set of 10 market-oriented policies that were popular among Washington-based policy institutions, as policy prescriptions for improving economic performance in Latin American countries and other developing countries. These policies centered around fiscal discipline, market-oriented domestic reforms, and openness to trade and investment.
The speed with which many of the reforms were carried out initially, especially domestic reforms like privatization of state-owned enterprises, without careful consideration of the environment of incomplete markets and the institutional challenges faced by African\ nigeria governments, affected the initial effectiveness of policy implementation and contributed to lower growth rates during the 1980 to 1999 reform period. The Washington Consensus framework contained some caveats that were subsequently lost in policy design, creating wedges between the theory of policy reform and the realities of implementation. It cautioned against capital account liberalization and, importantly, warned that privatization should occur with strict regulation only in competitive markets. They also advocated for pro-poor fiscal expenditures and advised against abolishing deregulation designed for safety or environmental reasons.
In practice,nigeria governments seeking immediate debt relief were often under significant pressure to quickly meet IFI policy measures under debt conditionality. The weakening of state apparatuses essential in implementing effective reform further reduced the ability of African/nigeria governments to effectively regulate the pace of policy adoption, with sometimes detrimental consequences for their populations in the initial reform period.
Finally, reforms should be a process of continuous reevaluation, adjustment, and recalibration over the reform period.
THE WASHINGTON CONSENSUS REFORMS AND SOCIOECONOMIC PERFORMANCE
Some of the key policy reforms of the Washington Consensus/SAP period of the 1980s and 1990s included privatization, fiscal discipline, and trade openness, that were introduced by IFIs as conditions for debt relief to highly indebted, economically constrained African countries. The expectation was that market-oriented reforms would correct domestic policy-induced distortions in prices, such as overvalued exchange rates, subsidies that led to artificially low agricultural commodity prices, high wage rates, low interest rates, and subsidized agricultural input prices, which introduced inefficiencies in resource allocation, worsening shortages and reducing economic output but we see that reverse is the case.

NAME: OBUTE CHISOM HELLEN
DEPT: ECONOMICS
REG NO: 2017/249539
EMAIL ADDRESS: hellytec4@gmail.com
BLOGGERS ADDRESS; obutechisomhellen.blogspot.

The Washington Consensus made a lot of interesting prescriptions for developing countries. In your opinion, do you think the prescribed policy reforms have really helped Nigeria or what is actually the problem with Nigeria?
DEFINITION OF WASHINGTON CONSENSUS
The Washington Consensus basically replaced development, which meant growth and inclusiveness, and economic development with a new concept of adjustment. The adjustment programs of the WC (excuse me for the abbreviation) focused on stabilization of macroeconomic indicators without paying any attention to the needs and capacities of the developing countries or their poorer population.
THIS PRESCRIBED POLICY REFORMS HAVE REALLY HELPED NIGERIA IN A WAY BUT IT AlSO CREATED MORE PROBLEMS.
I would say that this reforms did constituted more problems to Nigeria with the following points below. In the course, to reduce poverty, more consistent and rapid economic growth is required. One of the most important drawbacks of the Washington Consensus was that, while it provided a good mixture of reforms to both stabilize the economy and encourage private sector activity, it did very little to help resolve structural and institutional constraints on growth.
Strategic trade theory. Some economists argue that free trade is not always in the best interest of developing economies. A strict adoption of free trade and comparative advantage can leave developing economies producing low-income growth and volatile priced primary products. If countries promoted new industries, it might require both selective tariffs on cheap imports and also government subsidies.
Low government borrowing is not always appropriate. Implementing fiscal rules can cause unnecessary economic hardship if the government cuts spending at an inappropriate time. For example, fiscal consolidation during the great recession has caused low growth rates, and a failure to reduce debt to GDP ratios. If governments are pressured to cut spending it can also cause welfare support programmes to be hit, increasing poverty. However, in the long term, most economists would suggest it is prudent to reduce structural borrowing to manageable levels.
Problems of privatisation. Privatisation can increase efficiency and improve the quality of the product/service. However, for key public sector industries, privatisation may mean companies ignore wider social objectives. For example, in the 1990s, under World Bank pressure, Bolivia privatised its water industry. But, this led to water supplies being cut off from the poorest members of society. (politics of water in Bolivia at the Nation)
Mis-interpretation. The second point about redirecting of public spending towards public sector initiatives like primary education, primary health care and infrastructure investment, has often been ignored. Instead the ‘Washington Consensus’ has come to refer to more market oriented policies, which have focused on less government intervention.
The macro-economic crisis of Latin America in the 1980s and South East Asian crisis in 1990s made these free market policies unpopular in the countries where they were implemented. (see: Criticisms of IMF)
Credit crisis and instability of free markets. The credit crisis beginning in 2007 has illustrated the potential for free markets to create instability and high unemployment. Financial deregulation has created the potential for financial instability.

Asika joy ogechukwu
2017/242025
Economics dept
joy.asika.242025@unn.edu.ng

John Williamson coined the term “Washington Consensus” in 1989, he was referring to a set of ten market-oriented policies that were popular among Washington-based policy institutions, particularly as policy prescriptions for improving economic performance in Latin-American countries. These policies centered around fiscal discipline, market-oriented domestic reforms, and openness to trade and investment. In African countries, the Washington Consensus
inspired market-based reforms prescribed by international financial institutions (IFIs) like the World Bank and the International Monetary Fund (IMF), under “structural adjustment programs” (SAP). These reforms were often prerequisites for financial assistance to indebted African countries during the global recession and debt crisis of the 1980s, when the external debt rose sharply to unsustainable levels.

The story of how African countries got into a debt crisis that led to the introduction of structural adjustment programs is often told as follows: first, expansionary fiscal spending aimed at economic development spearheaded by newly independent African governments, struggling to recover from the ravages of European colonialism, increased government spending in the 1960s and 1970s. Governments also borrowed significantly to finance development expenditures over this time. Oil price shocks that significantly decreased the price of oil in 1980s led to declines in export revenue for many governments.
The tenets of the Washington Consensus are listed below
1. Avoidance of large fiscal deficits.
2. Redirection of public spending.
3. Tax reform
4. Market regulated interest rates
5. Competitive exchange rate.
6. Privatisation of state enterprises.
7. Deregulation
8. Trade liberation
9. Promotions of foreign direct investment
10. Legal security of property rights
The Washington Consensus would work to the economic growth of Nigeria but the main problem with the Nigerian economy is the visible unwillingness on the part of the government to implement the economic ideas of the consensus by their actions and inactions.

Over the year’s, after market-oriented structural reforms, termed “Washington consensus” policies, were first put to use, we revisit the evidence on policy adoption and the effects of these policies on socio-economic performance using Nigeria as a case Study. We focus on three key important reform policies which include
1.Fiscal discipline,
2.Trade openness
3.Privatization and
4.document significant improvements, in economic performance for reformers over the past two decades.
Following initial declines in per capita economic growth over the 1980s and 1990s, reform adopters experienced
notable increases in per capita real GDP growth in the post 2000 period. Notably, the ability to implement pro-poor policies alongside market oriented reforms played a central role in successful policy performance.

What is the WASHINGTON CONSENSUS?.
When economist John Williamson coined the term “Washington Consensus” in 1989, he was referring to a set of ten market-oriented policies that were popular among Washington-based policy institutions, particularly as policy prescriptions for improving economic performance in Latin-American countries. These policies centered around fiscal discipline, market-oriented domestic reforms, and openness to trade and investment. In African countries, the Washington Consensus inspired market-based reforms prescribed by international financial institutions (IFIs) like the World Bank and the International Monetary Fund (IMF), under “structural adjustment programs” (SAP). These reforms were often prerequisites for financial assistance to indebted African countries during the global recession and debt crisis of the 1980s, when the external debt rose sharply to unsustainable levels.

The story of how African countries got into a debt crisis that led to the introduction of structural adjustment programs is often told as follows: first, expansionary fiscal spending aimed at economic development spearheaded by newly independent African governments, struggling to recover from the ravages of European colonialism, increased government spending in the 1960s and 1970s. Governments also borrowed significantly to finance development expenditures over this time. Oil price shocks that significantly decreased the price of oil in 1980s led to declines in export revenue for many governments. This decline in export revenue, along with a collapse in world prices of primary agricultural commodities, which made up 88 percent of Africa’s exports, resulted in a shortfall in revenue that put enormous pressure on governments’ finances. Additionally, government featured largely in domestic financial institutions like the banking sector, with many African governments nationalizing foreign banks or creating new state-owned financial institutions.

Washington Consensus Policies and Structural Adjustment Programs.
A first step to understand the economic effects of Washington Consensus policy adoption is to examine the proposed reforms and the drivers of policy adoption across African countries. Washington Consensus reforms, as outlined in Serra and Stiglitz (2008), included the following 10 policy recommendations:
• “Fiscal discipline” focused on ensuring countries had relatively low primary fiscal deficits to
avoid balance of payment crises and high inflation;
• “Reordering public expenditure priorities” encouraged elimination of subsidies and increased
expenditure on pro-poor programs, including health care, education and infrastructure;
• “Tax reforms” emphasized the need for a broad-based tax base with moderate marginal tax
rates;
• “Interest rate liberalization” aimed at promoting market-determined interest rates and
achieving positive real interest rates;
• “Competitive exchange rates” to correct overvalued exchange rates;
• “Trade liberalization” to allow more openness to trade with varying views on the pace at which
to proceed;
• “Liberalization of Inward Foreign Direct Investment” to attract foreign capital but not including
capital account liberalization;
• “Privatization” highlighted the potential benefits of privatizing state-owned enter-prises by
either selling assets into a competitive market or regulating them properly;
• “Deregulation” aimed at easing barriers to entry and exit, but not abolishing regulations
designed for safety or environmental reasons or to govern prices in a non-competitive industry;
• “Legal security for property rights” to facilitate the acquisition of property rights, notably in the
informal sector.

The Washington Consensus Effect in Nigeria.
Of the three key reforms described in Section 3, Nigeria scored highly on two: domestic market oriented reforms around privatization and fiscal reforms aimed at improving the fiscal balance over the 1980 to 1999 period. Previous work has described the Nigerian economic experience post policy adoption in the 1980s as dismal by citing decreases in GDP growth rates from 6.9 percent pre-adjustment to -1.7 percent in the post-period. In Nigeria, the main determinant of adoption of World Bank-funded reforms was the pressure to reach agreements on debt rescheduling.

The second main determinant was the nature of leadership in power at the time and its commitment to the reform process. Nigeria has been a heavily oil commodity dependent country since the 1970s, with over 70 percent of government revenue from petroleum and petroleum exports as a share of total exports growing to over 90 percent in the 2000s. The heavy dependence on oil exports has made the country very vulnerable to external price shocks, with deleterious implications for the ability to finance public spending and debt. Following a drop in oil prices to between $8 and $10 per barrel in 1985-1987, and subsequent steep increases in the country’s debt to GDP ratio, Nigeria implemented policy reform in the form of structural adjustment programs with the support of the IMF and World Bank under then military president General Ibrahim Babangida.

A key driver of reform adoption was pressure to reach agreements on debt rescheduling as mentioned earlier. The reform focused on fiscal tightening and privatization but also induced severe cuts in social spending on education and health which reduced the wellbeing of Nigerian citizens and increased hostility for the reforms in the 1980s and 1990s, contrary to the
Washington Consensus which emphasized reorientation of spending toward pro-poor programs. The reforms were subsequently abandoned by the Babangida regime and the country continued to be beset by poor macroeconomic policy over the following decades of military rule. As an illustration, Nigeria continued to borrow and accumulated up to $30 billion in debt to the Paris Club of Creditors even though the country earned more than $300 billion in crude oil revenues
over the 1970s-2001 period. The debt became incredibly difficult to service during periods of low oil prices in the mid-1980s. And while some of the oil revenue and borrowed money was invested in needed infrastructure, education and health, lack of monitoring of spending and opaque ad-hoc budgets meant there was a significant amount of spending on “white elephant” projects like unproductive steel mills.

Following the transition to democracy in 1999 and under the helm of then President Olusegun Obasanjo, Nigeria was faced with an unstable macroeconomic environment characterized by volatile exchange rates, double digit inflation (23 percent per year in 2003), a relatively high fiscal deficit (3.5 percent of GDP in 2003) and low GDP growth (2.3 percent on average for the previous decade). Nigeria embarked on macroeconomic reforms under then finance minister Ngozi Okonjo-Iweala
aimed at stabilizing the macroeconomic environment and improving social indicators and general economic performance. The focus of the reforms was on privatization, budget monitoring and, crucially, investment in education and health under the National Economic Empowerment and Development Strategy (NEEDS). As part of the NEEDS pol-icy and to reduce volatility in public finances, Nigeria adopted an oil price-based fiscal rule (OPFT) that used the long-run (10 year) average oil price to set government budgets and targets for spending. Based on the rule, the government would set aside some excess revenues from oil in the form of a savings account called the Excess Crude Oil Account (ECA) headquartered at the central bank. The fiscal rule, which was institutionalized in national law in the Fiscal Responsibility Act signed in 2007, linked savings to fiscal discipline around government spending, aiming for a fiscal deficit of 3 percent of GDP. The policy was successful both in building fiscal discipline and helping Nigeria weather shocks like the financial crisis of 2008-2010
when oil prices fell from over $140 to $40 per barrel.

Over this period, Nigeria was able to draw on savings from the ECA to implement a fiscal stimulus of around 0.5 percent of GDP and maintain public spending. Increased public savings between 2004 and 2006 as a result of policy reform had real positive effects on macroeconomic performance- leading to fiscal surpluses of 7.7 percent of GDP in 2004 and 10 percent of GDP in 2005. The increased public spending enabled Nigeria to pay off its external debt arrears of about $6 billion, increase its foreign reserves from $7 billion in 2003 to $46 billion by the end of 2006, and implement tighter monetary policy to reduce inflation from 21.8 percent in 2003 to 10 percent in 2004. The $6 billion in arrears was paid as part of debt relief of a $30 billion debt, of which $18 billion was completely written off by the Paris Club. This also helped to spur private sector investment. Growth averaged 8.1 percent a year from 2003 to 2006 and the share of spending on health and education rose to 5 percent and almost 10 percent, for health and education in 2007, respectively.

Reforms also targeted sectors that were large drains on public finances for privatization in the telecommunications sector, the downstream petroleum sector and the power sector, to name a few, with varying degrees of success. Nigeria also benefited from the increase in oil prices in the post 2000 period, and both the reforms and increases in prices combined to create an attractive environment for private investors in the country

NAME: OBODIKE LOVETH OGADIMMA
REG NO: 2017/ 249537
DEPARTMENT: ECONOMICS

INTERESTING PRESCRIPTIONS MADE BY THE WASHINGTON CONSENSUS TO DEVELOPING COUNTRIES AND WHAT HAS LED TO THE DRAWBACK IN OUR COUNTRY NIGERIA

The need for radical re-thinking on development strategy is imperative for African countries to be relevant in the global economy. This is further reinforced by the stark reality of extreme poverty in Africa. Over the years, the share of Africa in global trade remained insignificant despite the implementation of the policies that were recommended by international financial and development institutions, such as the International Monetary Fund (IMF) and the World Bank.
Available statistics revealed that Africa had largely under-performed when compared to other developing regions. Economic growth in Sub-Saharan Africa (SSA) had been low; with an average real gross domestic product (GDP) growth rate of 2.6 per cent in the 1980s compared to 6.7 per cent in developing Asia over the same period. The global oil price shocks that occurred in the early 1980s worsened the economic performance in most African economies and led to the adoption of economic measures in the spirit of the Washington consensus. Noteworthy, is the Structural Adjustment Program (SAP) with key policy measures designed to achieve economic stabilization and enhance efficiency in resource allocation mainly through economic restructuring and macroeconomic balance. During this period, the growth rate of SSA declined precipitously from 2.3 per cent in 1985 to 0.8 per cent in 1986, whereas Developing Asia recorded a growth rate of 6.1 per cent in 1986. In the 1990s, the economic performance of SSA declined further to an average of 2.4 per cent,

Comparing the reform countries to non-reform countries, we find that during the initial reform years, economic performance was worse for reformers, with average per capita real GDP growth declining in the 1980s and 1990s. In contrast, non-reform adopters experienced positive growth over this period, consistent with the earlier literature showing that the reforms failed to bring about short-run economic growth. Between 2000 and 2019, average per capita GDP was higher than during the 1980s and 1990s for both reformers and non-reformers. However, the increase in growth was even higher for reform adopters. When we examine these comparative statistics by reform category, the difference in performance between reformers and non-reformers is largely driven by the adoption of fiscal discipline and domestic market-oriented reforms. While it is difficult to draw definitive conclusions, the results point to a reversal of the economic fortunes of reform adopters in the last two decades, following their initial dismal economic performance during the 1980s and 1990s.

The Washington consensus contains ten rules namely, fiscal discipline, tax reform, re-ordering public expenditure priorities, competitive exchange rate, privatization, trade liberalization, liberalizing interest rates, deregulation, liberalizing of inward FDI and property rights. These rules mirrored the tenets of liberal market-oriented capitalism and policies of the then Ronald Reagan and Margaret Thatcher governments which, were strong promoters of capitalism and neo-liberal ideology. Neoliberal ideology derived its tenets from the work of 18th century Economist, Adam Smith, who advocated free trade among nations as a way of promoting global growth. The policy prescriptions of conditioning aid and compelling developing countries to open their capital accounts and promote unhindered movement of portfolio investment across international borders by the IMF and World Bank have close similarities to the tenets of the Washington consensus. Although, most African Countries have continued to apply the principles of both consensuses in their economic policies, the road to development remains bleak with very little consideration for their growth potentials. According to Manuel (2003), one of the most important drawbacks of the Washington Consensus was that, while it provided a good mixture of reforms to stabilize an economy and encouraged private sector activities, it did very little to help resolve structural and institutional constraints on growth. He noted that part of Africas growth problems were the incentives and disincentives embedded in the global environment, which had reduced the continent to mere exporter of primary commodities. The continents economic growth has been grossly inhibited by a global trade system inimical to the full exploitation of its comparative advantage. Furthermore, limited market access for low-cost textiles, cotton, and agricultural products and competition from heavily subsidized exports from industrialized economies has effectively prevented growth (Manual, 2003). Thus, unable to produce capital intensive goods, African countries have been reduced to net importers of finished products. Hence, for African economies to achieve their growth potentials, they should be able to utilize their export earnings to broaden their production base and productivity. The primary commodities that are sources of export earnings have become highly susceptible to price volatility and adverse shifts in the terms of trade. Price volatility has not only resulted from adverse weather conditions and other supply shocks, but also from the secular decline in real prices caused by structural oversupply in commodity markets from output in the advanced economies (Kahl, 2004). Furthermore, the lack of support for price stabilization through commodity agreements by the international community hinders favourable pricing. While the World Bank and IMF are constantly discouraging the use of subsidies in African countries in line with one of the tenets of the Washington Consensus, the developed countries have continued to use subsidies to stabilize their economy, particularly in critical sectors such as the agricultural sector.

Over three decades after market-oriented structural reforms, termed “Washington consensus” policies, were first implemented, we revisit the evidence on policy adoption and the effects of these policies on socioeconomic performance in sub-Saharan African countries. We focus on three key ubiquitous reform policies around privatization, fiscal discipline, and trade openness and document significant improvements in economic performance for reformers over the past two decades. Following initial declines in per capita economic growth over the 1980s and 1990s, reform adopters experienced notable increases in per capita real GDP growth in the post 2000 period. We complement aggregate analysis with four country case studies that highlight important lessons for effective reform. Notably, the ability to implement pro-poor policies alongside market oriented reforms played a central role in successful policy performance.

Even though there is no panacea when it comes to economic reforms, the following lessons provide a useful general guide going forward: First, while market-oriented reforms can be beneficial for growth, each reform policy needs to be carefully considered in the institutional contexts, initial conditions of development and socio-political environment, among others. Second, ownership of the reform agenda by local government with stakeholder buy-in is important to encourage support for the reforms and increase the likelihood of success. Third, the negative spill overs of reform policies need to be minimized. Investment in social safety nets is a crucial part of reforms to protect the most vulnerable populations within the countries. Fourth, where reforms aim to achieve macroeconomic stability, they should not trade away social investment in human capital like education and health. Finally, reforms should be a process of continuous re-evaluation, adjustment, and recalibration over the reform period. There is not and will never be a one-size-fits-all approach when it comes to economic development, and the reform agenda should be approached carefully and with flexibility. Most early literature finds that the policies failed to improve economic conditions in these countries as the politics of international financial institutions. conditionality worked to undermine the role of local ownership in shaping domestic economic policy. In addition, reductions in government spending often reduced spending on pro-poor programs, and the removal of agricultural subsidies made it difficult for African farmers to compete on international markets. The results were increased unemployment and socio-political unrest in several African countries over this period. More recent literature has highlighted that reforms were successful in improving economic growth when policymakers had the state capacity to implement them, and when, crucially, reforms were paired with pro-poor policies, spearheaded by governments.
The external problem is that the global economic environment makes it less likely that internal reforms will be either initiated or sustained. For example, reliance on exporting a single commodity partly reflects inadequate external incentives to diversify production. Reform of revenue management (broadening the tax base and lowering marginal rates) becomes difficult because there is heavy dependence on a few sources of tax revenue, such as export and import tariffs. This makes it more difficult and much more important to reform the public sector and public expenditure management or to agree to sweeping trade liberalization.
In order for Africa to succeed under the proposed new economic development paradigm, the continent must cultivate a sense of urgency in overcoming some of the likely challenges currently confronting it. These challenges include: Corruption The high incidence of corruption constitutes a major challenge to the successful implementation of any new development strategies in Africa. The effects of corruption are multi-dimensional. Corruption promotes the diversion, depletion and misallocation of scarce resources, as well as increase in the costs of production of goods and services. It results in inefficient state ownership, excessive private accumulation and widening inequalities. The lack of transparency and accountability associated with corruption prevents public participation in the decision-making process thus, limiting positive developmental outcomes. The multiplicity of functions and the wanton duplication of agencies in some African countries equally promote wastages and inefficiencies in the management of resources. Corruption also distorts fiscal discipline and impedes institution of good corporate governance practices. Market access Low level of inter-complementarity of African goods limits the ability of the continent to support a high level of intra-African trade. This results from the production of the same category of goods primary goods, in addition to the fact that they service the same international market. There is a strong need therefore for diversification of the production base in Africa. Market access is also greatly reduced by the existence of sanitary phytosanitory measures conditions under the WTO, which promotes conditions that African countries cannot meet. There is need for the revaluation of the international trade rules that have limited the bargaining power of the continent. Due to the weaknesses of the domestic production base, African countries are unable to reciprocate the most favourable nation status in countries with which they sign bilateral trade agreements, and also fully participate in preferential trade agreements such as the African Growth and Opportunity Act (AGOA) and Economic Partnership Agreement (EPA). Technological constraints The low technology base in Africa is a major constraint to development. Old technologies are often deployed with over-reliance on traditional methods of production which results in low productivity and competitiveness due to the lack of economies of scale. African countries have also been unable to develop cutting edge technologies owing to weak research and development. This results from poor funding of research institutes and science education. There is need therefore for better funding of research initiatives in order to stimulate technological advancements. Structural/institutional constraints The lack of critical infrastructure such as transport and communication networks does not support the growth of economic activities in Africa. The inadequate supply of electricity, for example, leads to increase in production costs thereby rendering products expensive. Most of the existing legal infrastructure that is vital for the enforcement of competition laws, bankruptcy and other commercial laws are weak and inadequate. Rule of law, property rights, among others must therefore be firmly rooted to provide the enabling legal environment for Africas development. Information/Data constraints Many development projects are poorly implemented due to lack of data, which often lead to insufficient knowledge on the magnitude developmental challenge. The poor data base is largely due to lack of adequate infrastructure and skills for data mapping and analysis. There is need to focus on addressing these challenges to aid effective policy formulation and implementation.

Obi prosper uche
2017/241318
Economics
The Washington Consensus refers to a set of broadly free market economic ideas, supported by prominent economists and international organisations, such as the IMF, the World Bank, the EU and the US. Washington Consensus, a set of economic policy recommendations for developing countries, and Latin America in particular, that became popular during the 1980s. The term Washington Consensus usually refers to the level of agreement between the International Monetary Fund (IMF), World Bank, and U.S. Department of the Treasury on those policy recommendations. All shared the view, typically labelled neoliberal, that the operation of the free market and the reduction of state involvement were crucial to development in the global South.

Essentially, the Washington consensus advocates, free trade, floating exchange rates, free markets and macroeconomic stability.
The ten principles originally stated by John Williamson in 1989, includes ten sets of relatively specific policy recommendations.
Low government borrowing. Avoidance of large fiscal deficits relative to GDP;
Redirection of public spending from subsidies (“especially indiscriminate subsidies”) toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment;
Tax reform, broadening the tax base and adopting moderate marginal tax rates;
Interest rates that are market determined and positive (but moderate) in real terms;
Competitive exchange rates;
Trade liberalization: liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs;
Liberalization of inward foreign direct investment;
Privatization of state enterprises;
Deregulation: abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudential oversight of financial institutions;
Legal security for property rights.
The Washington consensus was important for determining policy towards economic development in Latin America, South East Asia and other countries. Some implications of the Washington consensus.

Implications of Washington Consensus
Support of free trade through WTO and NAFTA – reduce tariff barriers.
IMF bailouts tended to involve free market reforms as a condition of receiving money.
Belief in free trade suggests countries, should specialise in goods/services where they have a comparative advantage. This may mean developing economies need to stick with producing primary products.
Criticisms of the Washington Consensus
1. Strategic trade theory. Some economists argue that free trade is not always in the best interest of developing economies. A strict adoption of free trade and comparative advantage can leave developing economies producing low-income growth and volatile priced primary products. If countries promoted new industries, it might require both selective tariffs on cheap imports and also government subsidies. For example, the Brazilian government’s support and development of Embraer, helped Brazil become successful in airline manufacturing.

2. Low government borrowing is not always appropriate. Implementing fiscal rules can cause unnecessary economic hardship if the government cuts spending at an inappropriate time. For example, fiscal consolidation during the great recession has caused low growth rates, and a failure to reduce debt to GDP ratios. If governments are pressured to cut spending it can also cause welfare support programmes to be hit, increasing poverty. However, in the long term, most economists would suggest it is prudent to reduce structural borrowing to manageable levels.

3. The Chinese approach. An interesting development in recent years is that Chinese firms have invested substantial sums in developing economies, such as Africa and Latin America. An FT report, suggests China has lent $110 bn to developing countries in past two years – more than the World Bank. The interesting thing about the Chinese approach is that it involves substantial investment in infrastructure and public sector investment – showing that for economic development, an interventionist approach can have a bigger return than leaving it to free markets.

4. Problems of privatisation. Privatisation can increase efficiency and improve the quality of the product/service. However, for key public sector industries, privatisation may mean companies ignore wider social objectives. For example, in the 1990s, under World Bank pressure, Bolivia privatised its water industry. But, this led to water supplies being cut off from the poorest members of society. (politics of water in Bolivia at the Nation)

5. Mis-interpretation. The second point about redirecting of public spending towards public sector initiatives like primary education, primary health care and infrastructure investment, has often been ignored. Instead the ‘Washington Consensus’ has come to refer to more market oriented policies, which have focused on less government intervention.

6. The macro-economic crisis of Latin America in the 1980s and South East Asian crisis in 1990s made these free market policies unpopular in the countries where they were implemented. (see: Criticisms of IMF)

7. Credit crisis and instability of free markets. The credit crisis beginning in 2007 has illustrated the potential for free markets to create instability and high unemployment. Financial deregulation has created the potential for financial instability.
In defence of the Washington consensus
The 10 principles of the Washington consensus all have considerable economic validity. Broadening the tax base, investment in education, sustainable government borrowing, flexible exchange rates e.t.c can all help improve economic welfare Under certain situations, privatisation and increased competition can have potential benefits. Most economists would support the notion that free trade has potential benefits.
It’s always easy to criticise when things go wrong. When South East Asian economies were in great difficulties in the 1990s, it is likely that any policies would be unpopular. When you have a crisis there tends to be no easy way out.
The problems of the EU are related to difficulties of managing a single currency. A return to competitive exchange rates would help the crisis to be overcome more easily.
The problem with any broad set of economic principles is that it always depends on how and when they are implemented. For example, generally free trade is good. It’s generally desirable to have lower tariffs and encourage international trade. However, that doesn’t necessarily mean there isn’t room for targeted economic diversification; some developing economies may benefit from limited trade protectionism to develop new industries. But, even this depends on how it is implemented. If African countries, tried to use tariffs to develop a motor industry, it would probably lead to government failure because the infrastructure isn’t there to support a new motor industry. However, if there was some support to develop primary product processing within the country, it is more likely to be successful. With privatisation it depends on what you privatise. In the UK, the privatisation of BT was relatively uncontroversial, but the privatisation of British rail was much more controversial. The difference here is that railways are a natural monopoly and have social benefits.
velopment of property rights.

Nigeria flawed development
The story of Nigeria development is one interesting one, and not sufficiently told or understood outside of Nigeria and Africa more generally. In the 1970s its government pursued the conventional import-substitution industrialisation strategy of that time. The exchange policy adopted favoured a high valuation of the Nigerian naira, deliberately to assist local producers to source foreign inputs cheaply. Similarly, the increasing revenue from oil exports also precipitated this over-valuation of the currency. However, these factors affected adversely agricultural production which had previously been the main revenue source for the economy. So, with the oil price crash in early 1980, Nigeria suffered huge shocks: the depletion of its foreign reserves and the emergence of huge trade deficits.
To alleviate these problems, the IMF and the World Bank proposed neoliberal policies of deregulation and liberalisation. It was argued that subsidisation, which many governments in the developing countries were adopting to boost capital accumulation, was in fact the reason why most of them ran very low surpluses (worsened by low tax revenues), which then in turn generated low government savings to be mobilised by the financial institutions. In similar fashion, it was suggested that the use of ceilings prevented interest rates from playing the role of balancing the supply and demand for money.
Since the mid-1980s Nigeria has gradually embraced most, if not all, of the policies contained in the ‘Washington Consensus’. Financial markets have been liberalised, public entities privatised and most trade restrictions removed. However, despite all these efforts, the overall development of the economy and the well-being of the populace have stagnated or deteriorated in some key aspects. Production from manufacturing has declined tremendously as a proportion of the national output culminating in the growing number of unemployed persons (rising from 11.9% in 2005 to over 23% in 2011) and the increasing number of vulnerable poor persons (over 60% of the Nigerian people now live below US$1.25 a day).

NAME: EZIKE MARYCYNTHIA CHIAMAKA
REG NO: 2017/242944
EMAIL: marycynthiachiamaka95@gmail.com
DEPT: ECONOMICS

A British economist named John Williamson coined the term Washington Consensus in 1989.The ideas were intended to help developing countries that faced economic crises. In summary, The Washington Consensus is a set of ten economic policy prescriptions considered to constitute the “standard” reform package promoted for crisis-wracked developing countries by Washington, D.C.-based institutions such as the International Monetary Fund (IMF), World Bank and United States Department of the Treasury. The Washington Consensus recommended structural reforms that increased the role of market forces in exchange for immediate financial help. Some examples include free-floating exchange rates and free trade. These are the ten specific principles originally set out by John Williamson in 1989:
1.Low government borrowing. The idea was to discourage developing economies from having high fiscal deficits relative to their GDP.
2.Diversion of public spending from subsidies to important long-term growth supporting sectors like primary education, primary healthcare, and infrastructure.
3.Implementing tax reform policies to broaden the tax base and adopt moderate marginal tax rates.
4.Selecting interest rates that are determined by the market. These interest rates should be positive after taking inflation into account (real interest rate).
5.Encouraging competitive exchange rates through freely-floating currency exchange.
6.Adoption of free trade policies. This would result in the liberalization of imports, removing trade barriers such as tariffs and quotas.
7.Relaxing rules on foreign direct investment.
8.The privatization of state enterprises. Typically, in developing countries, these industries include railway, oil, and gas.
9.The eradication of regulations and policies that restrict competition or add unnecessary barriers to entry.
10.Development of property rights.
Criticisms of the Washington Consensus
1. Strategic trade theory. Some economists argue that free trade is not always in the best interest of developing economies. A strict adoption of free trade and comparative advantage can leave developing economies producing low-income growth and volatile priced primary products.
2. Problems of privatisation. Privatisation can increase efficiency and improve the quality of the product/service. However, for key public sector industries, privatisation may mean companies ignore wider social objectives.
3. Mis-interpretation. The second point about redirecting of public spending towards public sector initiatives like primary education, primary health care and infrastructure investment, has often been ignored. Instead the ‘Washington Consensus’ has come to refer to more market oriented policies, which have focused on less government intervention.
4. The macro-economic crisis of Latin America in the 1980s and South East Asian crisis in 1990s made these free market policies unpopular in the countries where they were implemented.
5. Low government borrowing is not always appropriate. Implementing fiscal rules can cause unnecessary economic hardship if the government cuts spending at an inappropriate time. For example, fiscal consolidation during the great recession has caused low growth rates, and a failure to reduce debt to GDP ratios. If governments are pressured to cut spending it can also cause welfare support programmes to be hit, increasing poverty. However, in the long term, most economists would suggest it is prudent to reduce structural borrowing to manageable levels.
But in the case of Nigeria this policies will not work for Nigeria well due to the poor implementation and application of these policies as a result of poor leadership and incompetence of the body responsible for discharging these policies. Secondly, political instability also contribute to the inability of the policies to be properly implemented because a new government can come into power and change the policies of the previous government.

Omeke Anslem Francisco
2017/249564
assurance081@gmail.com

The term Washington Consensus usually refers to the level of agreement between the International Monetary Fund (IMF), World Bank, e.t.c. John Williamson, who later worked for the World Bank, first used the term Washington Consensus in 1989, he claimed that he was actually referring to a list of reforms that he felt key players in Washington could all agree were needed in Latin America, Africa e.t.c. Essentially, the Washington consensus advocates, free trade, floating exchange rates, free markets and macroeconomic stability. The Washington Consensus recommended structural reforms that increased the role of market forces in exchange for immediate financial help. Some examples include free-floating exchange rates and free trade.
Critics have pointed out that the policies were unhelpful and imposed harsh conditions on the developing countries, others have defended the long-term positive impact of these ideas.
The ten(10) sets of relatively specific policy recommendations originally stated by John Williamson in 1989 are as follows;

1. Low government borrowing. Avoidance of large fiscal deficits relative to GDP.

2. Redirection of public spending from subsidies (“especially indiscriminate subsidies”) toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment.

3. Tax reform, broadening the tax base and adopting moderate marginal tax rates.

4. Interest rates that are market determined and positive (but moderate) in real terms.

5. Competitive exchange rates.

6. Trade liberalization: liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs.

7. Liberalization of inward foreign direct investment.

8. Privatization of state enterprises.

9. Deregulation: abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudential oversight of financial institutions.
10. Legal security for property rights.

The Washington consensus was important for determining policy towards economic development in Latin America, South East Asia and other countries. Some implications of the Washington consensus are; it’s support of free trade through WTO and NAFTA – reduce tariff barriers. IMF bailouts tended to involve free market reforms as a condition of receiving money and a belief in free trade suggests countries, should specialise in goods/services where they have a comparative advantage. This may mean developing economies need to stick with producing primary products.

An important point is that an economic policy may have sound justification, but it might not be universally applicable, e.g free trade. As regards it’s effectiveness(Washington consensus recommendation s) in developing countries (Nigeria), i will not attest to a positive outcome if implemented due to the countries poor implementation of policy as a result of incompetence in the part of the body responsible for discharging or implementing these policies, corrupt practice and political instability, tribalism and nepotism which have eaten deep into the minds of leaders in power.

Obi prosper uche
2017/241318
Economics

The Washington Consensus refers to a set of broadly free market economic ideas, supported by prominent economists and international organisations, such as the IMF, the World Bank, the EU and the US. Washington Consensus, a set of economic policy recommendations for developing countries, and Latin America in particular, that became popular during the 1980s. The term Washington Consensus usually refers to the level of agreement between the International Monetary Fund (IMF), World Bank, and U.S. Department of the Treasury on those policy recommendations. All shared the view, typically labelled neoliberal, that the operation of the free market and the reduction of state involvement were crucial to development in the global South.

Essentially, the Washington consensus advocates, free trade, floating exchange rates, free markets and macroeconomic stability.
The ten principles originally stated by John Williamson in 1989, includes ten sets of relatively specific policy recommendations.
Low government borrowing. Avoidance of large fiscal deficits relative to GDP;
Redirection of public spending from subsidies (“especially indiscriminate subsidies”) toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment;
Tax reform, broadening the tax base and adopting moderate marginal tax rates;
Interest rates that are market determined and positive (but moderate) in real terms;
Competitive exchange rates;
Trade liberalization: liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs;
Liberalization of inward foreign direct investment;
Privatization of state enterprises;
Deregulation: abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudential oversight of financial institutions;
Legal security for property rights.
The Washington consensus was important for determining policy towards economic development in Latin America, South East Asia and other countries. Some implications of the Washington consensus.

Implications of Washington Consensus
Support of free trade through WTO and NAFTA – reduce tariff barriers.
IMF bailouts tended to involve free market reforms as a condition of receiving money.
Belief in free trade suggests countries, should specialise in goods/services where they have a comparative advantage. This may mean developing economies need to stick with producing primary products.
Criticisms of the Washington Consensus
1. Strategic trade theory. Some economists argue that free trade is not always in the best interest of developing economies. A strict adoption of free trade and comparative advantage can leave developing economies producing low-income growth and volatile priced primary products. If countries promoted new industries, it might require both selective tariffs on cheap imports and also government subsidies. For example, the Brazilian government’s support and development of Embraer, helped Brazil become successful in airline manufacturing.

2. Low government borrowing is not always appropriate. Implementing fiscal rules can cause unnecessary economic hardship if the government cuts spending at an inappropriate time. For example, fiscal consolidation during the great recession has caused low growth rates, and a failure to reduce debt to GDP ratios. If governments are pressured to cut spending it can also cause welfare support programmes to be hit, increasing poverty. However, in the long term, most economists would suggest it is prudent to reduce structural borrowing to manageable levels.

3. The Chinese approach. An interesting development in recent years is that Chinese firms have invested substantial sums in developing economies, such as Africa and Latin America. An FT report, suggests China has lent $110 bn to developing countries in past two years – more than the World Bank. The interesting thing about the Chinese approach is that it involves substantial investment in infrastructure and public sector investment – showing that for economic development, an interventionist approach can have a bigger return than leaving it to free markets.

4. Problems of privatisation. Privatisation can increase efficiency and improve the quality of the product/service. However, for key public sector industries, privatisation may mean companies ignore wider social objectives. For example, in the 1990s, under World Bank pressure, Bolivia privatised its water industry. But, this led to water supplies being cut off from the poorest members of society. (politics of water in Bolivia at the Nation)

5. Mis-interpretation. The second point about redirecting of public spending towards public sector initiatives like primary education, primary health care and infrastructure investment, has often been ignored. Instead the ‘Washington Consensus’ has come to refer to more market oriented policies, which have focused on less government intervention.

6. The macro-economic crisis of Latin America in the 1980s and South East Asian crisis in 1990s made these free market policies unpopular in the countries where they were implemented. (see: Criticisms of IMF)

7. Credit crisis and instability of free markets. The credit crisis beginning in 2007 has illustrated the potential for free markets to create instability and high unemployment. Financial deregulation has created the potential for financial instability.
In defence of the Washington consensus
The 10 principles of the Washington consensus all have considerable economic validity. Broadening the tax base, investment in education, sustainable government borrowing, flexible exchange rates e.t.c can all help improve economic welfare Under certain situations, privatisation and increased competition can have potential benefits. Most economists would support the notion that free trade has potential benefits.
It’s always easy to criticise when things go wrong. When South East Asian economies were in great difficulties in the 1990s, it is likely that any policies would be unpopular. When you have a crisis there tends to be no easy way out.
The problems of the EU are related to difficulties of managing a single currency. A return to competitive exchange rates would help the crisis to be overcome more easily.
The problem with any broad set of economic principles is that it always depends on how and when they are implemented. For example, generally free trade is good. It’s generally desirable to have lower tariffs and encourage international trade. However, that doesn’t necessarily mean there isn’t room for targeted economic diversification; some developing economies may benefit from limited trade protectionism to develop new industries. But, even this depends on how it is implemented. If African countries, tried to use tariffs to develop a motor industry, it would probably lead to government failure because the infrastructure isn’t there to support a new motor industry. However, if there was some support to develop primary product processing within the country, it is more likely to be successful. With privatisation it depends on what you privatise. In the UK, the privatisation of BT was relatively uncontroversial, but the privatisation of British rail was much more controversial. The difference here is that railways are a natural monopoly and have social benefits.
velopment of property rights.

Nigeria flawed development
The story of Nigeria development is one interesting one, and not sufficiently told or understood outside of Nigeria and Africa more generally. In the 1970s its government pursued the conventional import-substitution industrialisation strategy of that time. The exchange policy adopted favoured a high valuation of the Nigerian naira, deliberately to assist local producers to source foreign inputs cheaply. Similarly, the increasing revenue from oil exports also precipitated this over-valuation of the currency. However, these factors affected adversely agricultural production which had previously been the main revenue source for the economy. So, with the oil price crash in early 1980, Nigeria suffered huge shocks: the depletion of its foreign reserves and the emergence of huge trade deficits.
To alleviate these problems, the IMF and the World Bank proposed neoliberal policies of deregulation and liberalisation. It was argued that subsidisation, which many governments in the developing countries were adopting to boost capital accumulation, was in fact the reason why most of them ran very low surpluses (worsened by low tax revenues), which then in turn generated low government savings to be mobilised by the financial institutions. In similar fashion, it was suggested that the use of ceilings prevented interest rates from playing the role of balancing the supply and demand for money.
Since the mid-1980s Nigeria has gradually embraced most, if not all, of the policies contained in the ‘Washington Consensus’. Financial markets have been liberalised, public entities privatised and most trade restrictions removed. However, despite all these efforts, the overall development of the economy and the well-being of the populace have stagnated or deteriorated in some key aspects. Production from manufacturing has declined tremendously as a proportion of the national output culminating in the growing number of unemployed persons (rising from 11.9% in 2005 to over 23% in 2011) and the increasing number of vulnerable poor persons (over 60% of the Nigerian people now live below US$1.25 a day).

NAME: OBODO CHISOM JESSICA
REG NO: 2017/249538
EMAIL: chisom.obodo.249538@unn.edu.ng

The Washington Consensus is a set of ten economic policy prescriptions considered to constitute the “standard” reform package promoted for crisis-wracked developing countries by Washington, D.C.-based institutions such as the International Monetary Fund (IMF), World Bank and United States Department of the Treasury.
The term was first used in 1989 by English economist John Williamson.The prescriptions encompassed policies in such areas as macroeconomic stabilization, economic opening with respect to both trade and investment, and the expansion of market forces within the domestic economy.
Subsequent to Williamson’s use of the , and despite his emphatic opposition, the phrase Washington Consensus has come to be used fairly widely in a second, broader sense, to refer to a more general orientation towards a strongly market-based approach (sometimes described as market fundamentalism or neoliberalism).
When economist John Williamson coined the term “Washington Consensus” in 1989, he was
referring to a set of ten market-oriented policies that were popular among Washington-based
policy institutions, particularly as policy prescriptions for improving economic performance.These policies centered around fiscal discipline, market-oriented domestic reforms, and openness to trade and investment.

Since the mid-1980s Nigeria has gradually embraced most, if not all, of the policies contained in the ‘Washington Consensus’. Financial markets have been liberalised, public entities privatised and most trade restrictions removed.  However, despite all these efforts, the overall development of the economy and the well-being of the populace have stagnated or deteriorated in some key aspects.  Production from manufacturing has declined tremendously as a proportion of the national output (Figure 1), culminating in the growing number of unemployed persons (rising from 11.9% in 2005 to over 23% in 2011) and the increasing number of vulnerable poor persons (over 60% of the Nigerian people now live below US$1.25 a day).

In conclusion, the first move that needs to be made to deal with Nigeria’s many contemporary problems of development should be to sweep away these many structural obstacles which decimate the rate of profit accruing to real production.  Recommendations or solutions should focus, above all, on alleviating the problems that inhibit real capital assets from reproducing sufficient returns.  Nigerian policy-makers should create a ‘congenial’ environment that ensures that the rate of profit accruable to real production is maintained at a level whereby the would-be capitalist deems it satisfactory to invest in a real productive process in the country.

Name: AGBO EBUBE EDITH

Reg No: 2017/249475

Dept: ECONOMICS

The term “Washington Consensus” identified by Economist John Williamson in 1989, is a simple set of ten recommendations which refers to the level of agreement between the IMF, World Bank and US Department of the Treasury in those policy recommendations. These recommendations served as set of reform policies on how developing countries could became advanced like the developed countries. They include: Fiscal discipline, tax reform, Financial Liberalization, Elimination of barriers to foriegn direct investment, adoption of a single competitive exchange rate, Trade Liberalization, Reducing public expenditure and Deregulation of market entry, competition and secure property right.

The above policy recommendations could have been a good means of bringing about a great turn around for Nigeria, but the huge flaws and incompetence of the Government has led to her stagnation. The Nigeria Government is amongst others, characterized by Corruption, political instability, and fiscal irresponsibility. Our Government is characterized by self ambitious and greedy leaders who misappropriate and embezzles funds. Fiscal discipline would only be a “dream”, as the Government keeps spending (unnecessarily) above her “revenue ” and end up in debt. Unaccountability has become their identity. We find favouritism and inequality play out explicitly, as the rich keep getting richer and the poor keep getting poorer.

The Nigeria Government obviously do not have the interest of her citizens at heart, and therefore Could not have fully Implemented these reforms.

Okoroji Arinze Emmanuel
Economics (Major)
2017/241443

The washington concensus may have been said to be working for Nigeria but in my opinion the Nigerian leadership have suffered a lot of set back. And the issue of tribalism and nepotism has played a dangerous role in the economic development of the Nigerian economy. It has always been about who gulped out more for the region he is from and not to better the nation at large.
Nevertheless, most African states have made strong progress with many of the reforms, which helps explain, in part, the continent’s improved economic performance in recent years. Economic growth in Africa is expected to average 3.1 percent this year and 4.2 percent next year, more than twice the average in 1984–93 and marginally higher than the average for all developing countries. Macro-economic stability is being consolidated, with average consumer price inflation at 9.7 percent in 2002, down from 13.2 percent in 2001 and 54.6 percent in 1994. Underpinning the better inflation picture are lower fiscal deficits, which have declined from an average 5.2 percent of GDP in 1994 to 2.1 percent in 2001.
Part of Africa’s growth problem is due to the incentives and disincentives embedded in the global environment. All African economies, even those of South Africa, Nigeria, and Egypt, are small. Thus, the whole global environment—trade, international finance, and development aid needs to be supportive of growth and to provide the right incentives for small African states to pursue reform.

IROEGBU BLESSING O.
2017/249518
ECONOMICS

The Washington Consensus which was coined by John Williamson was a set of reform policies on how developing countries could advance or become or grow to be like the developed countries. Some of which include: Trade Liberalization (removal of all trades barriers between and among counties), Tax reforms, Interest Rate Flexibility or Liberalization, Privatization of state-owned properties and enterprises, Competitive Exchange Rate, Fiscal Discipline (dealing with the government revenue and expenditure, etc. All these and others were good reform policies as it worked for some developing countries then.
Several African countries adopted these policies, often under conditionality, in the 1980s and 1990s. Most early literature finds that the policies failed to improve economic conditions in these countries as the politics of IFI conditionality worked to undermine the role of local ownership in shaping domestic economic policy. In addition, reductions in government spending often reduced spending on pro-poor programs, and the removal of agricultural subsidies made it difficult for Africa farmers to compete on international markets.
Here in Nigeria, these policy reforms remained on paper. Perhaps, the country would have become a better place, had its key figures embraced these policy reforms. The country is far from fiscal discipline and majority of the reform measures, although privatization of state-owned enterprises has gone a long way and funds are allocated to irrelevant sectors.
Finally, I believe that Nigeria would have really been helped this consensus but Nigeria’s problems are beyond the implementation of all these policies. Her inability to properly manage the country’s revenue directing to the development of the country, corruption and unaccountable actions to mention but few are problems of Nigeria that is why it seems like development is far fetched.

Washington Consensus
Washington consensus refers to a set of economic policies recommendation for developing countries, and Latin America that became popular during the 1980’s. The term Washington consensus usually refers to the level of agreement between the international monetary fund, the world bank, the us department of the treasury on those policies recommendation.
The world bank and the international monetary fund was able to promote the view throughout the developing world by attaching policy conditions, known as stabilization and structural adjustment programs to the loans they made. In very broad terms, the Washington consensus reflected the set of policies that became their standard package of advice attached to loans. The first element was a set of policies designed to create economic stability by controlling inflation and reducing government budget deficit.
Many developing countries, especially in Latin America, had suffered hyperinflation during the 1980’s. Therefore the monetarist approach was recommended, whereby government spendings will be reduced and interest rates will be raised to reduce the money supply.
The second stage was the reform of trade and exchange rate policy so the country could be integrated into the global economy.
The ten elements of the Washington consensus are: Fiscal adjustments, tax reforms, deregulation, trade liberalization, competitive exchange rate, privatization, removal of barrier to foreign investment, and financial reforms.
In my conclusion Washington consensus has helped Nigeria, but corruption is always a hindrance towards economic development.

Ndem Nneka Grace
2017/249529
Economics
Nnekagrace.blogspot.com

The Washington Consensus made a lot of interesting prescriptions for developing countries. In your opinion, do you think the prescribed policy reforms have really helped Nigeria, or what is actually the problem with Nigeria?

Washington Consensus which was championed by John Williamson in 1989 is a set of rigid, almost unalterable set of theoretical propositions about which the powerful and the knowledgeable had no doubt was widespread. Moreover, the often implicit corollary espoused by the more politically motivated consensus proponents was that dissent with its policies was often inspired by anti-Americanism and other forms of the modern-day equivalents of obscurantism.
One of the undoubted historical contributions of the Washington consensus is that it marked the end of decoupling between developing economies and mainstream economies that had gather steam since the 1970s.
Therefore one of the Washington consensus prescriptions that the government-imposed barriers to import and export to foreign investment and to foreign currency transactions had to be lifted was sharply at odds with the long-held conviction that developing countries had to protect their economy from an unfair and exploitative international system rigged against them. It also nurtured implicit but very important changes in attitudes about the extent to which countries economic destiny could be shaped by national policymakers. For years, external factors, foreign conspiracies, foreign aid, the externally determined price of the main export commodity, or an impenetrable international economy we’re seen as the main drivers of a developing countries poor economic performance. This postulates that domestic policies had far less impact than decisions taken abroad.

Frankly speaking the prescribed policies by the Washington consensus would have been a channel for the development of Nigeria, but main looking at Nigeria we can vividly see that our problem is beyond our control how? Before these reforms can be an aid to the development of Nigeria, Nigeria on it’s own have some issues to settle like government instability, corruption, over dependency on other countries, infrastructural development etc. In our country today, it’s obvious that there is government instability even if the current government should implement the policy reforms, another government might come up tomorrow and scrape it off to bring his own policy, and the policy will end up not yielding anything to the economy. There is high rate of corruption which need to be handled first before the implementation of some of the policies. In my opinion I am saying that the prescribed policy reforms can be effective in Nigeria but it can’t be effective without Nigeria handling it’s own personal problems in the country.

Agbo Jennifer Amarachi
2017/249476
jenniferamarachi.agbo@gmail.com
Economics

John Williamson, a famous Economist coined the term “Washington Consensus” in 1989. He referenced it to policies that centered around fiscal discipline, market-oriented domestic reforms, and openness to trade and investments.

Specifically, these reforms or Williamson’s 10 commandments as some will call it include: Fiscal discipline, Tax reforms, Trade liberalization, privatization, deregulation, Secure property rights, Liberalization of inward foreign direct investment, Reordering public expenditure, A competitive exchange rate.

These reforms have been applied in some countries for example, Argentina, Indonesia, Korea and Thailand but then the results were short lived, negative and caused these countries to suffer deeper output looses more than countries that did not apply the Washington Consensus.

This implies that the Washington Consensus suffers from fundamental inadequacies, and that a more comprehensive framework of the economic policies is needed to guide the formulation of country-specific development strategy. Thus, failure of Washington Consensus in Nigeria is entirely not Nigeria’s fault although most of Nigeria’s activities resulted to its non-actualization.

The Nigerian Story

Since the mid-1980’s Nigeria has gradually embraced most, if not all, of the policies contained in the Washington Consensus. Major economic reforms were adopted in Nigeria from the Administration of president Shehu Shagari in the Second Republic to the present administration led by President Muhammadu Buhari. The policies adopted were a blend of institutional plans, market mechanism and reforms. Specifically, the major policies practiced in the period include: Government Control, Privatization, Liberalization, Anti-Corruption, public sector reforms, Governance and institutional reforms among others.

However, the Nigerian economy, after fifty years of political Independence and Economic governance and management, had suffered from fundamental structural defects and has remained in persistent stagnation. The Washington Consensus’ implementation in Nigeria failed because the productive and technological base in Nigeria is weak and outdated, narrow, inflexible and externally dependent. The infrastructure is poor, inadequate and lacks maintenance. Nigeria depends so much on a single product that is, Crude oil and failed to diversify its economy through the promotion of other sectors.

Although the financial markets in Nigeria have been Liberalized, public entities privatised and most trade restrictions removed, it has been evident that the overall development of the Economy and well-being of the citizens have deteriorated extremely. The Manufacturing sector’s contribution to the National Output has greatly reduced as a result of reduced productivity and this has led to an increase in the unemployment rate and indeed inevitably, poverty.

Other reasons why Washington Consensus has failed to be effective in Nigeria are misuse of resources, corruption, bad governance, political instability, lack of proper implementation of these policies, low industrialization and infrastructure among others.

Moreover, the truth is that the Washington Consensus is really an economic programme that is focused myopically on short and medium-term stabilization of output, prices, and balance of payments, and not on long-run sustained growth, particularly in a poor country like Nigeria.

In conclusion, it needs to be emphasized that the causes of underdevelopment are many. The reality is that countries differ in structure and international economic constraints they face, therefore countries should adopt reforms related to the features inherent in their structure. For Nigeria, she should first of all solve all the problems as mentioned above, inherent in its economy before trying out these policies in the future.

Mbaukwu Nkiruka Precious
2017/242425
Economics
Mbaukwuprecious86@gmail.com

The Washington Consensus refers to a set of broadly free market economic ideas, supported by prominent economists and international organisations, such as the IMF, the World Bank, the EU and the US. Essentially, the Washington consensus advocates, free trade, floating exchange rates, free markets and macroeconomic stability.
Washington Consensus Policies and Structural Adjustment Programs.
A first step to understand the economic effects of Washington Consensus policy adoption is to examine the proposed reforms and the drivers of policy adoption across African countries. Washington Consensus reforms, as outlined in Serra and Stiglitz (2008), included the following 10 policy recommendations:
• “Fiscal discipline” focused on ensuring countries had relatively low primary fiscal deficits to
avoid balance of payment crises and high inflation;
• “Reordering public expenditure priorities” encouraged elimination of subsidies and increased
expenditure on pro-poor programs, including health care, education and infrastructure;
• “Tax reforms” emphasized the need for a broad-based tax base with moderate marginal tax
rates;
• “Interest rate liberalization” aimed at promoting market-determined interest rates and
achieving positive real interest rates;
• “Competitive exchange rates” to correct overvalued exchange rates;
• “Trade liberalization” to allow more openness to trade with varying views on the pace at which
to proceed;
• “Liberalization of Inward Foreign Direct Investment” to attract foreign capital but not including
capital account liberalization;
• “Privatization” highlighted the potential benefits of privatizing state-owned enter-prises by
either selling assets into a competitive market or regulating them properly;
• “Deregulation” aimed at easing barriers to entry and exit, but not abolishing regulations
designed for safety or environmental reasons or to govern prices in a non-competitive industry;
• “Legal security for property rights” to facilitate the acquisition of property rights, notably in the
informal sector.
Most independent African governments, Nigeria,for example, sought to promote industrialization, in an effort to develop local production and reduce imports, promote employment, raise the standard of living, and break out of the vicious circle of trade patterns epitomized in the Prebisch-Singer hypothesis (unfavorable terms of trade for commodity-exporting and manufacturer-importing countries). The Washington Consensus’ recipes, by contrast, were presented as universal, similarly applicable in the context of developed and developing countries, even if they ended up being implemented in a discriminatory and uneven fashion.
Criticisms of the Washington Consensus
1. Strategic trade theory. Some economists argue that free trade is not always in the best interest of developing economies. A strict adoption of free trade and comparative advantage can leave developing economies producing low-income growth and volatile priced primary products. If countries promoted new industries, it might require both selective tariffs on cheap imports and also government subsidies. For example, the Brazilian government’s support and development of Embraer, helped Brazil become successful in airline manufacturing.

2. Low government borrowing is not always appropriate. Implementing fiscal rules can cause unnecessary economic hardship if the government cuts spending at an inappropriate time. For example, fiscal consolidation during the great recession has caused low growth rates, and a failure to reduce debt to GDP ratios. If governments are pressured to cut spending it can also cause welfare support programmes to be hit, increasing poverty. However, in the long term, most economists would suggest it is prudent to reduce structural borrowing to manageable levels.

3. The Chinese approach: An interesting development in recent years is that Chinese firms have invested substantial sums in developing economies, such as Africa and Latin America. An FT report, suggests China has lent $110 bn to developing countries in past two years – more than the World Bank. The interesting thing about the Chinese approach is that it involves substantial investment in infrastructure and public sector investment – showing that for economic development, an interventionist approach can have a bigger return than leaving it to free markets.
4. Problems of privatisation. Privatisation can increase efficiency and improve the quality of the product/service. However, for key public sector industries, privatisation may mean companies ignore wider social objectives. For example, in the 1990s, under World Bank pressure, Bolivia privatised its water industry. But, this led to water supplies being cut off from the poorest members of society. (politics of water in Bolivia at the Nation)
5. Mis-interpretation. The second point about redirecting of public spending towards public sector initiatives like primary education, primary health care and infrastructure investment, has often been ignored. Instead the ‘Washington Consensus’ has come to refer to more market oriented policies, which have focused on less government intervention.
In defence of the Washington consensus
* The 10 principles of the Washington consensus all have considerable economic validity. Broadening the tax base, investment in education, sustainable government borrowing, flexible exchange rates e.t.c can all help improve economic welfare  Under certain situations, privatisation and increased competition can have potential benefits. Most economists would support the notion that free trade has potential benefits.
* It’s always easy to criticise when things go wrong. When South East Asian economies were in great difficulties in the 1990s, it is likely that any policies would be unpopular. When you have a crisis there tends to be no easy way out.
* The problems of the EU are related to difficulties of managing a single currency. A return to competitive exchange rates would help the crisis to be overcome more easily.
* The problem with any broad set of economic principles is that it always depends on how and when they are implemented. For example, generally free trade is good. It’s generally desirable to have lower tariffs and encourage international trade. However, that doesn’t necessarily mean there isn’t room for targeted economic diversification; some developing economies may benefit from limited trade protectionism to develop new industries. But, even this depends on how it is implemented. If African countries, tried to use tariffs to develop a motor industry, it would probably lead to government failure because the infrastructure isn’t there to support a new motor industry. However, if there was some support to develop primary product processing within the country, it is more likely to be successful. With privatisation it depends on what you privatise. In the UK, the privatisation of BT was relatively uncontroversial, but the privatisation of British rail was much more controversial. The difference here is that railways are a natural monopoly and have social benefits.
Despite the many criticisms of The Washington Consensus program, I believe that why it hasn’t yielded much fruits in Nigeria is due to the incompetence of our leaders. Their lack of interests at directing the revenue of the country towards development.

Name: ONAH GEORGE CHIEDOZIE.
REG. NO: 2017/241453.
DEPARTMENT: ECONOMICS

The Washington consensus was ushered in by J. Williamson, his major interest was to make the developing countries better nations. A set of economic policy recommendations for developing countries, and Latin America in particular, that became popular during the 1980s. The term Washington Consensus usually refers to the level of agreement between the International Monetary Fund (IMF), World Bank, e.t.c. John Williamson, who later worked for the World Bank, first used the term Washington Consensus in 1989, he claimed that he was actually referring to a list of reforms that he felt key players in Washington could all agree were needed in Latin America, Africa e.t.c.
These policy reforms includes, issues centered on fiscal discipline, redirecting public expenditure, tax reformation, financial liberalization, competitive exchange rate, trade liberalization, elimination of barriers to foreign direct investment, privatization of state-owned enterprises, deregulation of market entry and competition and securing property rights. The 10 principles of the Washington consensus all have considerable economic validity. Broadening the tax base, investment in education, sustainable government borrowing, flexible exchange rates e.t.c can all help improve economic welfare Under certain situations, privatisation and increased competition can have potential benefits. Most economists would support the notion that free trade has potential benefits. The problem with any broad set of economic principles is that it always depends on how and when they are implemented. For example, generally free trade is good. It’s generally desirable to have lower tariffs and encourage international trade
Putting Nigeria and these reforms into considerations, one will get to understand lots of difficulties surrounding its implementation. Nigeria in other words, has weak institutions, corruption at it’s peak, even at the lowest levels of governance cum other setbacks associated with policy implementations. In conclusions the Washington consensus remains irrelevant in existence of these setbacks stipulated

Name: NNANYELUGO CHIDERA MICHAEl
Reg no: 2017/245023
Dept: Economics

Meaning
Washington Consensus, a set of economic policy recommendations for developing countries, and Latin America in particular, that became popular during the 1980s. The term Washington Consensus usually refers to the level of agreement between the International Monetary Fund (IMF), World Bank, and U.S. Department of the Treasury on those policy recommendations. All shared the view, typically labelled neoliberal, that the operation of the free market and the reduction of state involvement were crucial to development in the global South.
The Washington consensus made a lot of interesting prescriptions for developing countries like Nigeria so I think it has really helped Nigeria.
With the onset of a debt crisis in the developing world during the early 1980s, the major Western powers, and the United States in particular, decided that both the World Bank and the IMF should play a significant role in the management of that debt and in global development policy more broadly. When the British economist John Williamson, who later worked for the World Bank, first used the term Washington Consensus in 1989, he claimed that he was actually referring to a list of reforms that he felt key players in Washington could all agree were needed in Latin America. However, much to his dismay, the term later became widely used in a pejorative way to describe the increasing harmonization of the policies recommended by those institutions. It often refers to a dogmatic belief that developing countries should adopt market-led development strategies that will result in economic growth that will “trickle down” to the benefit of all.
The World Bank and IMF were able to promote that view throughout the developing world by attaching policy conditions, known as stabilization and structural adjustment programs, to the loans they made. In very broad terms, the Washington Consensus reflected the set of policies that became their standard package of advice attached to loans. The first element was a set of policies designed to create economic stability by controlling inflation and reducing government budget deficits. Many developing countries, especially in Latin America, had suffered hyperinflation during the 1980s. Therefore, a monetarist approach was recommended, whereby government spending would be reduced and interest rates would be raised to reduce the money supply. The second stage was the reform of trade and exchange-rate policies so the country could be integrated into the global economy. That involved the lifting of state restrictions on imports and exports and often included the devaluation of the currency. The final stage was to allow market forces to operate freely by removing subsidies and state controls and engaging in a program of privatization.

By the late 1990s it was becoming clear that the results of the Washington Consensus were far from optimal. Increasing criticism led to a change in approach that shifted the focus away from a view of development as simply economic growth and toward poverty reduction and the need for participation by both developing-country governments and civil society. That change of direction came to be known as the post-Washington Consensus.
Criticisms of The Washington Consensus
Some economists argue that free trade is not always in the best interest of developing economies. Some strategic and infant industries have to be protected initially to provide long-term growth. These industries may also require protection in the form of subsidies or tariffs against imports.
Chinese firms, aided by the government, have been investing large sums in developing economies in Africa, Asia, and Latin America. These firms typically invest in infrastructure, creating opportunities for long-term trade and growth.
Privatization can increase productivity and enhance the quality of the product or service. However, privatization can often lead to companies ignoring certain low-income markets or the social needs of a developing economy.
The free market has its own faults and instabilities. As we saw with the Great Recession in 2008-2009, increased deregulation can lead to financial volatility that can infect the entire economy.
Conclusion
The Washington Consensus recommended structural reforms that increased the role of market forces in exchange for immediate financial help. Some examples include free-floating exchange rates and free trade.

Critics have pointed out that the policies were unhelpful and imposed harsh conditions on the developing countries, others have defended the long-term positive impact of these ideas.

NAME: OGBONNAYA VICTOR NNANNA
REG NO: 2017/249544
DEPARTMENT: ECONOMICS
E MAIL: nnanna.ogbonnaya.249544@unn.edu.ng

The washington concensus was coined by John Williamson and is a set of reform policies on how developing countries could advance or grow to the developed countries. The Washington consensus constituted policies in areas like macroeconomic stabilization, Economic opening with respect to both trade and investment and the expansion of market forces within the domestic economy. The Washington consensus policies were: Fiscal discipline, tax reform, financial liberalization, trade liberalization, competitive exchange rate, deregulation of market entry, adoption of a single competitive exchange rate and competition and securing property rights.
The aim of the Washington consensus was to ensure market – oriented reforms would correct domestic policy induced distortions in prices such as the overvalued exchange rates, subsidies, high wage rate, low interest rates which characterized the less developed countries. But to their dismay, most early economists found out that these policies failed to improve the economic conditions in the less developed countries, and the removal of agricultural subsidies mad it difficult for Nigerian farmers to compete favourably in the international markets and unemployment and sociopolitical unrest were vivid in these less developed countries.
Now, the major problem with Nigeria is the poor implementation of policies. The bodies which are entrusted with these policies prefer to satisfy themselves or fill their pockets first and would not perform their duties effectively and efficiently. The Nigerian bodies would prefer leaving the said policies on their desks unattended to for a long while before the policies are even carried out. There is also mismanagement of funds and corruption, tribalism and nepotism is adverse in Nigeria which hinders proper discharge of these policies.

NAME : FERDINAND DANIEL NWEKE
Reg : 2017/245020
Department : Economic

Washington consensus was introduced in 1989 by an economist name John Williamson . which was for the purpose of increasing development in Africa,Latin American and Asian country who were under develop . This set of policy centered around fiscal discipline, trade liberalization, tax reform, financial liberalization, privatization of state owned enterprises , competitive exchange rate , interest rate liberalization which are some of the policy.
Now the Washington consensus policy were good policy which will have help Nigeria if implemented well which will lead to development but in the case of Nigeria will see an opposite case due to some factor like
•High rate of corruption were the policy maker implement policy that is in they favor.
•High level of debt Nigerian as a country cannot implement some of those policy due to the high level of debt since some of the policy required funding.
•There is an inability in the implementation of the policy due to the constant political change were by in process of changing personal in office, incompetence and inefficient personal may be appointed. There is a week institution in Nigeria who would have been responsible for the checking of government activity and punishing offended of the rule .

NWAFOR CLARA DABELECHI
2017/249534
ECONOMICS

The Washington Consensus refers to a set of broadly free market economic ideas, supported by prominent economists and international organisations, such as the IMF, the World Bank, the EU and the US. The Washington consensus which advocates for free trade, floating exchange rates, free markets and macroeconomic stability especially in developing countries was supposed to help improve the Nigeria economy like it has done in other countries but other political and economic problems in Nigeria haulted the effects of these policies in Nigeria Such as political instability and execution of policies. One thing is to make policies and another is to make sure the policies are functioning. Since the policies in Nigeria are not usually functioning, the Washington concensus would not help the Nigerian economy grow since it’s not been executed. Also, the lack of consistency and the politicians’ greed are among the causes of the hemorrhage in the economy. Every administration, which comes on board, sets up a new policy initiative instead of working on the previous one. Consequently, Nigeria has a series of inefficient and poorly executed policies.

Name:Meteke Joy Orimusue
Reg.no:2017/242430
Department:Economics
Website: metekejoy01.blogspot.com
Email:joymetex2000@gmai.com

WASHINGTON CONCENSUS : DOES IT APPLY IN NIGERIA?
The Washington Consensus refers to a set of broadly free market economic ideas, supported by prominent economists and international organisations, such as the IMF, the World Bank, the EU and the US.Essentially, the Washington consensus advocates, free trade, floating exchange rates, free markets and macroeconomic stability.The Washington consensus was important for determining policy towards economic development in Latin America, South East Asia and other countries. The Washington Consensus refers to a set of free-market economic policies supported by prominent financial institutions such as the International Monetary Fund, the World Bank, and the U.S. Treasury. A British economist named John Williamson coined the term Washington Consensus in 1989.The ideas were intended to help developing countries that faced economic crises. In summary, The Washington Consensus recommended structural reforms that increased the role of market forces in exchange for immediate financial help. Some examples include free-floating exchange rates and free trade. These are the ten specific principles originally set out by John Williamson in 1989:
1.Low government borrowing. The idea was to discourage developing economies from having high fiscal deficits relative to their GDP.
2.Diversion of public spending from subsidies to important long-term growth supporting sectors like primary education, primary healthcare, and infrastructure.
3.Implementing tax reform policies to broaden the tax base and adopt moderate marginal tax rates.
4.Selecting interest rates that are determined by the market. These interest rates should be positive after taking inflation into account (real interest rate).
5.Encouraging competitive exchange rates through freely-floating currency exchange.
6.Adoption of free trade policies. This would result in the liberalization of imports, removing trade barriers such as tariffs and quotas.
7.Relaxing rules on foreign direct investment.
8.The privatization of state enterprises. Typically, in developing countries, these industries include railway, oil, and gas.
9.The eradication of regulations and policies that restrict competition or add unnecessary barriers to entry.
10.Development of property rights.

CRITICISMS OF THE WASHINGTON CONCENCUS
a.Some economists argue that free trade is not always in the best interest of developing economies. Some strategic and infant industries have to be protected initially to provide long-term growth. These industries may also require protection in the form of subsidies or tariffs against imports.
b.Chinese firms, aided by the government, have been investing large sums in developing economies in Africa, Asia, and Latin America. These firms typically invest in infrastructure, creating opportunities for long-term trade and growth.
c.Privatization can increase productivity and enhance the quality of the product or service. However, privatization can often lead to companies ignoring certain low-income markets or the social needs of a developing economy.
d.The free market has its own faults and instabilities. As we saw with the Great Recession in 2008-2009, increased deregulation can lead to financial volatility that can infect the entire economy.
Critics have pointed out that the policies were unhelpful and imposed harsh conditions on the developing countries, others have defended the long-term positive impact of these ideas.Unfortunately, the Washington Consensus is strictly considered as a failed consensus by many major institutions and economists from group of Marxism, Dependency Theory and Structuralist after some economic crisis in Asia, Latin America, Africa, and lastly the global financial crisis in 2008. According to Stiglitz, the adoption of the Washington Consensus agenda in some Latin American and African countries has contributed to the economic crisis. In contrast, India and several East Asian countries like China, Taiwan and South Korea show a great development when they ignored the Washington Consensus and its representative institutions.Many critiques and debates have been addressed towards the Washington Consensus since last two decades which question the effectiveness of this consensus and its original sense.

The failure of the Washington Consensus has provided many lessons that can be learned by new government leaders in developing and less-developed countries to concern on their policies and international financial institutions to do a reform and create a new economic package or policies to boost global growth and development. The neo-liberalist people have to believe that the Washington Consensus has failed to give a solution for global development. However, it has given a bad experience for countries adopting the policy package from this consensus. As many interpretations of the Washington Consensus exist as there are regions in the world. For Africa, the panoply of reforms subsumed under the term has been useful as a guide to economic policymaking—with the main focus on fiscal discipline and privatization—even though it has proved difficult for most African countries to pursue all of them. Few countries anywhere have applied the reforms of the Washington Consensus completely, not least because some of them are culturally and historically sensitive. A larger difficulty, however, is that the reform agenda only partially addresses the growth constraints faced by many developing countries. Macroeconomic stabilization is critical for growth, but it is not clear that privatization is. Moreover, privatization and deregulation simply do not apply to African countries in the same way that they may in Latin American countries.

Nevertheless, most African states have made strong progress with many of the reforms, which helps explain, in part, the continent’s improved economic performance in recent years. Economic growth in Africa is expected to average 3.1 percent this year and 4.2 percent next year—more than twice the average in 1984–93 and marginally higher than the average for all developing countries. Macro-economic stability is being consolidated, with average consumer price inflation at 9.7 percent in 2002, down from 13.2 percent in 2001 and 54.6 percent in 1994. Underpinning the better inflation picture are lower fiscal deficits, which have declined from an average 5.2 percent of GDP in 1994 to 2.1 percent in 2001.

NAME: ONYEKANMA CHIDINMA CYNTHIA
REG.NO. 2017/249569
DEPARTMENT: ECONOMICS

We the people are eventually sitting on our excreta,
And expect “some saviour” to help us out,
With it’s interventions, policies, guidelines, aids and grants. (Call them ‘fragrances’)
We have lazily waited for them to rescue us.
Well, they came. Buh they had to exchange something for something
She said ‘capitalist’ or whatever, we just need anyone to aid us
They wondered why we refused to stand and clean up despite their fragrances
We loved their fragrances
Sweet smelling at first
Funky and ill-scented next
It has spread to all crevices
And other expensive fragrances which we can’t pay for
Arrive the country on a daily.
We all are leaving the country, right?
Huh!
Yeah, to Canada
Let’s stand together with the excreta on our butts
We will clean up ourselves
Some will,
Trek, leaving the sun to do it’s work
Swim, let the waters wash
Painstakingly wash away their excreta
The Big Guys will be choked by theirs
Then will all return with new, refined and refilled fragrances for our progress.

The Washington Consensus insisted on the importance of stabilizing exchange rates in times of crisis through public budget cuts, higher taxes and interest rates and other recessive measures. Their opponents criticized such policies, arguing that they would lead to recession. Sharp increases in interest rates would contribute towards the deepening of the crisis, a case with Nigeria
It is now commonplace to say that structural adjustment (SAP) and macroeconomic stabilization programs had a disastrous impact on social policies and poverty levels in Nigeria. Following the first wave of reforms undertaken by debt-affected African countries like Nigeria – which included public expenditure cuts, introduction of charges for health and education, and reductions in industrial protection, leading to high unemployment, poverty rise and unequal income distributions.
Nigeria has gradually embraced most, if not all, of the policies contained in the ‘Washington Consensus’. Financial markets have been liberalized, public entities privatized and most trade restrictions removed. However, despite all these efforts, the overall development of the economy and the well-being of the populace have stagnated or deteriorated in some key aspects.
Production from manufacturing has declined tremendously as a proportion of the national output culminating in the growing number of unemployed persons (rising from 11.9% in 2005 to over 23% in 2011) and the increasing number of vulnerable poor persons (over 60% of the Nigerian people now live below US$1.25 a day).
Low production in the country is due to the fact that the government has channeled it’s energy to one sector ( the petroleum sector), leaving every other sector behind. The Washington Consensus had good intentions but had poor or lacked good implementers on the receiving end. And this is the case with all developing countries with Nigeria inclusive. We also suffer the “In Your Help We Are Drained” problem. Something must go for something. It’s also coupled with the fact that the county has corrupt, incompetent, manipulative and untrustworthy leadership. This is majorly the reason why this consensus has pitfalls. Let’s not forget that we must learn to clean our own excreta.

UDUMA IKECHUKWU OBASI
2017/241441
Economics
ikechukwuuduma9@gmail.com

THE WASHINGTON CONSENSUS

The Washington Consensus is a set of ten economic policy prescriptions considered to constitute the “standard” reform package promoted for crisis-wracked developing countries by Washington, D.C.-based institutions such as the International Monetary Fund (IMF), World Bank and United States Department of the Treasury.The term was first used in 1989 by English economist John Williamson. The prescriptions encompassed policies in such areas as macroeconomic stabilization, economic opening with respect to both trade and investment, and the expansion of market forces within the domestic economy.
Subsequent to Williamson’s use of the terminology, and despite his emphatic opposition, the phrase Washington Consensus has come to be used fairly widely in a second, broader sense, to refer to a more general orientation towards a strongly market-based approach (sometimes described as market fundamentalism or neoliberalism). In emphasizing the magnitude of the difference between the two alternative definitions, Williamson has argued that his ten original, narrowly defined prescriptions have largely acquired the status of “motherhood and apple pie” (i.e., are broadly taken for granted), whereas the subsequent broader definition, representing a form of neoliberal manifesto, “never enjoyed a consensus [in Washington] or anywhere much else” and can reasonably be said to be dead.
Discussion of the Washington Consensus has long been contentious. Partly this reflects a lack of agreement over what is meant by the term, but there are also substantive differences over the merits and consequences of the policy prescriptions involved. Some critics take issue with the original Consensus’s emphasis on the opening of developing countries to global markets, and/or with what they see as an excessive focus on strengthening the influence of domestic market forces, arguably at the expense of key functions of the state. For other commentators, the issue is more what is missing, including such areas as institution-building and targeted efforts to improve opportunities for the weakest in society.
The widespread adoption by governments of the Washington Consensus was to a large degree a reaction to the macroeconomic crisis that hit much of Latin America, and some other developing regions, during the 1980s. The crisis had multiple origins: the drastic rise in the price of imported oil following the emergence of OPEC, mounting levels of external debt, the rise in US (and hence international) interest rates, and—consequent to the foregoing problems—loss of access to additional foreign credit. The import-substitution policies that had been pursued by many developing country governments in Latin America and elsewhere for several decades had left their economies ill-equipped to expand exports at all quickly to pay for the additional cost of imported oil (by contrast, many countries in East Asia, which had followed more export-oriented strategies, found it comparatively easy to expand exports still further, and as such managed to accommodate the external shocks with much less economic and social disruption). Unable either to expand external borrowing further or to ramp up export earnings easily, many Latin American countries faced no obvious sustainable alternatives to reducing overall domestic demand via greater fiscal discipline, while in parallel adopting policies to reduce protectionism and increase their economies’ export orientation. Many countries have endeavored to implement varying components of the reform packages, with implementation sometimes imposed as a condition for receiving loans from the IMF and World Bank.

EFFECTS:
The Washington Consensus would result in socioeconomic exclusion and weakened trade unions in Latin America, resulting with unrest in the region. Countries who followed the consensus initially alleviated high inflation and excessive regulation, though economic growth and poverty relief was insignificant. The consensus resulted with a shrinking middle class in Latin America that prompted dissatisfaction of neoliberalism, a turn to the political left and populist leaders by the late-1990s, with economists saying that the failure of the consensus established support for Hugo Chávez in Venezuela, Evo Morales in Bolivia and Rafael Correa in Ecuador.
Williamson has summarized the overall results on growth, employment and poverty reduction in many countries as “disappointing, to say the least”. He attributes this limited impact to three factors: (a) the Consensus per se placed no special emphasis on mechanisms for avoiding economic crises, which have proved very damaging; (b) the reforms—both those listed in his article and, a fortiori, those actually implemented—were incomplete; and (c) the reforms cited were insufficiently ambitious with respect to targeting improvements in income distribution, and need to be complemented by stronger efforts in this direction. Rather than an argument for abandoning the original ten prescriptions, though, Williamson concludes that they are “motherhood and apple pie” and “not worth debating”. Both Williamson and other analysts have pointed to longer term improvements in economic performance in a number of countries that have adopted the relevant policy changes consistently, such as Chile
Speaking at a fundraiser for the James A. Baker III Institute for Public Policy in November 2018, Barack Obama acknowledged that globalization and the policies associated with the Washington Consensus exacerbated economic inequality which helped fuel the rise of the alt-right. According to a 2020 study, the implementation of policies associated with the Washington Consensus significantly raised real GDP per capita over a 5- to 10-year horizon.

CRITICISM:
As of the 2000s, several Latin American countries were led by socialist or other left wing governments, some of which—including Argentina and Venezuela—have campaigned for (and to some degree adopted) policies contrary to the Washington Consensus policies. Other Latin American countries with governments of the left, including Brazil, Chile and Peru, in practice adopted the bulk of the policies included in Williamson’s list, even though they criticized the market fundamentalism that these are often associated with.

General criticism of the economics of the consensus is now more widely established, such as that outlined by US scholar Dani Rodrik, Professor of International Political Economy at Harvard University, in his paper Goodbye Washington Consensus, Hello Washington Confusion?
As Williamson has pointed out, the term has come to be used in a broader sense to its original intention, as a synonym for market fundamentalism or neo-liberalism. In this broader sense, Williamson states, it has been criticized by people such as George Soros and Nobel Laureate Joseph E. Stiglitz. The Washington Consensus is also criticized by others such as some Latin American politicians and heterodox economists such as Erik Reinert. The term has become associated with neoliberal policies in general and drawn into the broader debate over the expanding role of the free market, constraints upon the state, and the influence of the United States, and globalization more broadly, on countries’ national sovereignty. Some US economists, such as Joseph Stiglitz and Dani Rodrik, have challenged what are sometimes described as the ‘fundamentalist’ policies of the IMF and the US Treasury for what Stiglitz calls a ‘one size fits all’ treatment of individual economies. According to Stiglitz the treatment suggested by the IMF is too simple: one dose, and fast—stabilize, liberalize and privatize, without prioritizing or watching for side effects.Besides the excessive belief in market fundamentalism and international economic institutions in attributing the failure of the Washington consensus, Stiglitz provided a further explanation about why it failed. In his article “The Post Washington Consensus Consensus”, he claims that the Washington consensus policies failed to efficiently handle the economic structures within developing countries. The cases of East Asian countries such as Korea and Taiwan are known as a success story in which their remarkable economic growth was attributed to a larger role of the government by undertaking industrial policies and increasing domestic savings within their territory. From the cases, the role for government was proven to be critical at the beginning stage of the dynamic process of development, at least until the markets by themselves can produce efficient outcomes

Okonkwo Chidinma Alisa

2017/243086

Economics Major

300 Level

The Washington Consensus brought up by John Williamson was a set of reform policies on how developing countries could advance or become or grow to be like the developed countries. Some of which include: Trade Liberalization (removal of all trades barriers between and among counties), Tax reforms, Interest Rate Flexibility or Liberalization, Privatization of state-owned properties and enterprises, Competitive Exchange Rate, Fiscal Discipline (dealing with the government revenue and expenditure, etc. All these and others were good reform policies as it worked for some developing countries then.
As regards the issue whether these reform policies have helped Nigeria or not, the reform policies have actually not be helpful or even working today the least in Nigeria.
This is mainly due to the fact that first, there is poor implementation of these policies. Like obviously, we have all these excellent, mouthwatering polices that are very much making a lot of sense, but the issue with this country is the poor implementation of these policies. The body with which would be saddled with the responsible of discharging these duties could be either not discharging them at all or not effectively and efficiently carrying them out as stated.
Second, I would say that the poor implementation problem could be due to fact that we suffer from political instability. Our government today could bring up a policy and then tomorrow’s government can come and scrap off that existing policy and which may sometimes have not even started started it’s work in the economy thereby causing us to suffer for it as such reform polices like the Washington Consensus would not even work in our economy.