The Washington consensus: a Latin American perspective fifteen years later

The paper analyzes the economic and social development of Latin America after nearly two decades of macroeconomic policies and reforms in line with the "Washington Consensus." It shows that these policies lowered inflation and induced an export boom but failed to boost domestic investment and to remove the balance-of-payments binding constraint on the region's long-term path of economic expansion. Four alternative explanations of such poor performance of the Washington Consensus are compared. In particular, the paper argues that, contrary to mainstream opinion, in Latin America, there is no clear association between the depth of macroeconomic reforms and economic growth performance.