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Policy Complementarities and the Washington Consensus

Author

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  • Jahangir Aziz

    (International Monetary Fund)

  • Robert Wescott

    (International Monetary Fund)

Abstract

While economists continue to debate whether individual economic policies, such as those contained in Willliamson s (1993) Washington Consensus, can help to spur growth in developing countries, this paper demonstrates that it is groups of policies that are more critical for growth. Policy complementarity is defined as a set of mutually reinforcing policies that create an environment that is conducive to investment and growth. Quantitative measures of policy complementarity are developed, and the study shows empirically, both through an outcomes-based probability framework and standard regression analysis, that these complementarities are significant and robust in explaining growth outcomes over the period 1985-95.

Suggested Citation

  • Jahangir Aziz & Robert Wescott, 1999. "Policy Complementarities and the Washington Consensus," Development and Comp Systems 9902002, EconWPA.
  • Handle: RePEc:wpa:wuwpdc:9902002
    Note: Type of Document - Tex/WordPerfect/Handwritten; prepared on IBM PC - PC; to print on HP/; pages: 27 ; figures: included
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    References listed on IDEAS

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    1. Quah, Danny T, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," Economic Journal, Royal Economic Society, vol. 106(437), pages 1045-1055, July.
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    3. Barro, Robert J. & Lee, Jong-Wha, 1993. "International comparisons of educational attainment," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 363-394, December.
    4. Harrison, Ann, 1996. "Openness and growth: A time-series, cross-country analysis for developing countries," Journal of Development Economics, Elsevier, vol. 48(2), pages 419-447, March.
    5. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    6. Sala-i-Martin, Xavier, 1997. "I Just Ran Two Million Regressions," American Economic Review, American Economic Association, vol. 87(2), pages 178-183, May.
    7. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
    8. Danny Quah, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," CEP Discussion Papers dp0280, Centre for Economic Performance, LSE.
    9. Quah, Danny, 1996. "Twin peaks : growth and convergence in models of distribution dynamics," LSE Research Online Documents on Economics 2278, London School of Economics and Political Science, LSE Library.
    10. King, Robert G. & Levine, Ross, 1993. "Finance, entrepreneurship and growth: Theory and evidence," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 513-542, December.
    11. Williamson, John, 1993. "Democracy and the "Washington consensus"," World Development, Elsevier, vol. 21(8), pages 1329-1336, August.
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    More about this item

    Keywords

    economic growth; development policies; complementarities;

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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