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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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  • François Combarnous

    (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique)

  • Eric Berr

    (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique)

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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  • François Combarnous & Eric Berr, 2006. "Too much consensus could be harmful : measuring the degree of implementation of the Washington consensus and its impact on economic growth," Post-Print hal-00152985, HAL.
  • Handle: RePEc:hal:journl:hal-00152985
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00152985
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    2. Sirimaneetham, Vatcharin & Temple, Jonathan, 2006. "Macroeconomic Policy and the Distribution of Growth Rates," CEPR Discussion Papers 5642, C.E.P.R. Discussion Papers.

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    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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