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Washington Consensus in Latin America: From Raw Model to Straw Man

Author

Listed:
  • Ilan Goldfajn
  • Lorenza Martínez
  • Rodrigo O. Valdés

Abstract

We take stock of three decades of a love-hate relationship between Latin American policies and the Washington Consensus, reviewing its implementation, national debate, and outcomes. Using regional data and case studies of Brazil, Chile, and Mexico, we discuss the various degrees of the Washington Consensus implementation and evaluate performance. We find mixed results: macroeconomic stability is much improved, but economic growth has been heterogeneous and generally disappointing, despite improvement relative to the 1980s. We discuss the risk that the region could revert parts of the Washington Consensus reforms, which are necessary building blocks for a new agenda more focused on social integration, a fairer and just society, and environmentally sustainable growth based on better education.

Suggested Citation

  • Ilan Goldfajn & Lorenza Martínez & Rodrigo O. Valdés, 2021. "Washington Consensus in Latin America: From Raw Model to Straw Man," Journal of Economic Perspectives, American Economic Association, vol. 35(3), pages 109-132, Summer.
    • Handle: RePEc:aea:jecper:v:35:y:2021:i:3:p:109-32
    DOI: 10.1257/jep.35.3.109
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    References listed on IDEAS

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    Cited by:

    1. Medina, Juan Pablo & Toni, Emiliano & Valdes, Rodrigo, 2023. "The Art and Science of Monetary and Fiscal Policies in Chile," MPRA Paper 117198, University Library of Munich, Germany, revised 28 Apr 2023.
    2. Patra, Saswat & Malik, Kunjana, 2025. "Return and volatility connectedness among US and Latin American markets: A QVAR approach with implications for hedging and portfolio diversification," Global Finance Journal, Elsevier, vol. 65(C).
    3. Aristizabal-Ramirez, Maria & Leahy, John & Tesar, Linda L., 2023. "A north-south model of structural change and growth," Journal of Monetary Economics, Elsevier, vol. 133(C), pages 77-102.
    4. Miguel D. Ramirez, 2025. "Net Reverse Transfers from Latin America and the Caribbean: Further Econometric Evidence for Mexico and Chile," Working Papers 2501, Trinity College, Department of Economics.
    5. Ricardo Alonzo Fern'andez Salguero, 2025. "The Crisis Simulator for Bolivia (KISr-p): An Empirically Grounded Modeling Framework," Papers 2510.16537, arXiv.org.
    6. Jesse Naidoo, 2025. "Economic policy and aggregate outcomes in South Africa and selected Latin American countries 19942024," Working Papers 11094, South African Reserve Bank.
    7. Salguero, Ricardo Alonzo Fernandez, 2025. "El Consenso de Washington una revisión narrativa de su evidencia, impactos y transformaciones," SocArXiv krshu_v1, Center for Open Science.
    8. Bomprezzi, Pietro & Marchesi, Silvia, 2023. "A firm level approach on the effects of IMF programs," Journal of International Money and Finance, Elsevier, vol. 132(C).
    9. Garriga, Ana Carolina, 2025. "Revisiting Central Bank Independence in the World: An Extended Dataset," MPRA Paper 123578, University Library of Munich, Germany.
    10. Le Clech, Néstor A., 2024. "Policy market orientation, property rights, and corruption effects on the rent of non-renewable resources in Latin America and the Caribbean," Resources Policy, Elsevier, vol. 91(C).
    11. Andre Varella Mollick & Andre Coelho Vianna, 2024. "Economic growth before and after the fiscal stimulus of 2008–2009: the role of institutional quality and government size," Public Choice, Springer, vol. 198(1), pages 189-207, January.
    12. Baqir, Reza & Diwan, Ishac & Rodrik, Dani, 2023. "Dealing with the new wave of debt overhangs: A Framework to Evaluate Economic Adjustment-Cum-Debt Restructuring Packages," FDL Policy Notes 2301, CEPREMAP.

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    More about this item

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth

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