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Too much consensus could be harmful : measuring the degree of implementation of the Washington consensus and its impact on economic growth

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  • Eric Berr

    (GED, Université Montesquieu Bordeaux IV)

  • François Combarnous

    (GED, Université Montesquieu Bordeaux IV)

  • Eric Rougier

    (GED, Université Montesquieu Bordeaux IV)

Abstract

In this paper, we construct a unique quantitative measure of the depth and pace of all aspects of IFI programs — the Washington consensus index (WCI), and we investigate their whole impact on economic growth. Two main conclusions emerge. Firstly, among observed countries, those who come up to Consensus expectations maintain a relatively high degree of government involvement. Secondly, when combined with usual explanatory variables, WCI presents a significant non-linear relation with the probability of getting a higher growth than others get. Thus, it seems that a “too fast” and/or a “too far” implementation of IFI programs, especially in regard of deregulation and monetary orthodoxy, can harm growth in developing countries. L’objectif de ce papier est double. Dans un premier temps, nous construisons un indicateur quantitatif mesurant le degré d’application des programmes des IFI – l’indicateur du consensus de Washington – pour ensuite évaluer par ce biais l’impact de ces programmes sur la croissance économique d’un certain nombre de pays en développement. Deux principales conclusions apparaissent. D’une part, parmi les pays observés, ceux qui répondent le mieux aux attentes des IFI le font en maintenant un certain degré d’implication de l’Etat. D’autre part, une fois introduit dans un modèle usuel de croissance, notre indicateur présente une relation non-linéaire avec la probabilité de bénéficier d’un taux de croissance économique supérieur à celui des autres pays. Ainsi, il apparaît qu’une mise en œuvre trop rapide ou trop importante des programmes des IFI, particulièrement en termes de déréglementation et de politique monétaire, nuit à la croissance des pays en développement. (Full text in english)

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Bibliographic Info

Paper provided by Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV in its series Documents de travail with number 116.

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Length: 20 pages
Date of creation: Sep 2005
Date of revision:
Handle: RePEc:mon:ceddtr:116

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Cited by:
  1. Vatcharin Sirimaneetham & Jonathan Temple, 2006. "Macroeconomic policy and the distribution of growth rates," Bristol Economics Discussion Papers 06/584, Department of Economics, University of Bristol, UK.
  2. Eric BERR (GREThA), 2008. "Keynes and the Post Keynesians on Sustainable Development," Cahiers du GREThA 2008-01, Groupe de Recherche en Economie Théorique et Appliquée.

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