We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Was the Washington Consensus?

By Brendan McGuigan
Updated May 17, 2024
Our promise to you
WiseGeek is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGeek, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

The Washington Consensus is a term used to describe ten policy prescriptions laid out by economist John Williamson. These prescriptions are meant as a baseline of directions for nations in need of assistance from international economic entities, such as the World Bank and the International Monetary Fund. The list was originally laid out in 1989, and has since been referenced many times, but it has become a sort of general term of disparagement to those who oppose free market fundamentalism.

The approach has seen limited results as it has been applied in various countries suffering economic crises. Over the years, the Consensus has been blamed for a number of massive destabilizations, most notably the Argentinean crisis. Williamson at one point noted that, in many cases, the results of its implementation had been disappointing, noting some flaws and how it might be improved.

The ideas in the Washington Consensus were not new or novel at the time Williamson presented them. Instead, they represented a distillation of the common threads among advice most often given by the International Monetary Fund, the World Bank, the US Treasury, and other lending bodies. The prescriptions were originally intended to address the very real problems occurring in Latin America at the time, and their use later to handle a wide array of other situations has been criticized even by original proponents of the points.

The ten points of the Consensus are themselves intentionally somewhat vague, as they were meant to represent a baseline. They include the following:

  • keeping competitive exchange rates within the country,
  • liberalizing foreign investment opportunities,
  • privatizing enterprises run by the state,
  • giving strong legal guarantees for property rights,
  • letting interest rates be handled by the market and remaining positive and moderate,
  • moving spending away from subsidies and towards direct investment in infrastructure, health care, and education,
  • reforming the tax system to a broader tax base,
  • having a policy of strong fiscal responsibility,
  • liberalizing trade by removing or lessening restrictions on imports and tariffs,
  • and deregulation that lessens competition, except in the cases of consumer safety, environmental health, and financial institutional stability.

The name of the Washington Consensus has often been mentioned as being somewhat unfortunate, especially by its creator. Many people feel that it gives the impression the points outlined represent a set of rules imposed on developing nations by the United States. Instead, Williamson always felt that the prescriptions represented a consensus precisely because they were so universal. Many proponents of the plan do not feel that it represents the hard-line neo-liberal agenda that anti-free-trade activists say it does, instead presenting it as a relatively conservative assessment of what policies can help bring a country to economic stability.

Opponents of the prescriptions note that they do a great deal to open developing nations to exploitation by already developed nations, sometimes with catastrophic results. A number of countries, particularly in Latin America, have pursued policies in recent years that go directly against the Consensus, sometimes with very positive results. Socialist leaders such as Hugo Chavez, Evo Morales, and Nestor Kirchner all actively spoke out against the guidelines, and guided their countries in a very different direction.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
By anon144858 — On Jan 21, 2011

The washington consensus is only a new form of capitalism policy including laissez fair policy. we can also use term washington consensus as anti state intervention in economic policy. Liberalising economic policy is not helpful for some countries but according to the washington consensus, if a country seeks financial assistance then they have to follow the washington consensus 10 rule policy.

By mitchell14 — On Jan 08, 2011

I wonder what will come after the Washington Consensus. The Washington Conundrum? Perhaps the Washington Cooperative, or something else that actually suggests an interest in places which function differently than the United States.

By hyrax53 — On Jan 06, 2011

It is no wonder that in response to the Washington Consensus, Latin America and many other regions are trying to move in an opposite direction; many of its terms offer absolutely no assistance to weaker economies, and in fact do quite the opposite. If the United States will not restrict itself, then other countries will need to restrict their association with it instead.

By helene55 — On Jan 06, 2011

The Washington Consensus definition in general seems like a new way to refer to laissez faire economics, or the concept of generally letting business handle itself. Liberalizing things like tariffs, imports and exports, and other regulations in general leads to the free market that, as people are learning more and more in recent years, really gives freedom to very few.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.