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MENTAL MODEL · M3200

Washington Consensus

Washington Consensus
BusinessHigh supportDevelopment Economics
Included
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Version 1.0.0 · Updated 2026-07-30

CORE DEFINITION

A set of ten policy recommendations proposed in 1989 for economic reform in Latin American countries, including fiscal discipline, reordering public expenditure priorities, tax reform, interest rate liberalization, exchange rate marketization, trade liberalization, foreign direct investment liberalization, privatization, deregulation, and secure property rights.

SCAFFOLDING EFFECT

psychology

Reduce cognitive load

Development policy evaluation. It provides a framework for understanding economic reforms in developing countries at the end of the 20th century. When analyzing different national development models, it helps understand the pros and cons of market-oriented reforms and why a "one-size-fits-all" reform package may fail.

anchor

Anchor fast decisions

Presuming "state failure," it advocates fiscal austerity, market liberalization, and privatization to correct price and institutional distortions, attract capital, and restore growth. Its mechanism treats competitive markets as the optimal resource allocation mechanism, replacing import substitution strategies and regulation with a "ten-point prescription." It views policy reform as a structural menu that can be applied independently.

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Source support: Explicit

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    en.wikipedia.orghttps://en.wikipedia.org/wiki/Washington_ConsensusZH · Explicit
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