The World Bank and the post-Washington Consensus in Vietnam and Indonesia

Critical Reflections on Development

“…From the 1990s onwards, the policies that were implemented in the name of the Washington Consensus focused particularly on liberalisation, macroeconomic stability and privatisation, and also included a broadening of the original term to include capital market liberalisation -an extension that was particularly significant in the genesis of the Asian Financial Crisis. Joseph Stiglitz (2008), among others, has argued that this later usage of the term should be more properly called the 'Post-Washington Consensus Consensus', and many other commentators have chronicled the use and misuse of this configuration of policy prescriptions, and inherent weaknesses of its theoretical and political basis -see, for example, Engel (2010), Fine, Lapavitsas and Pincus (2001) and Van Waeyenberge (2006). The whole edifice was based on a blind faith in markets that is not justified either on theoretical grounds or on the basis of historical experience.…”

Good Governance, State Capacity, and the Millennium Development Goals

“…In addition to encouraging political decentralization and aiming to lower inflation rates, budget deficits, and trade barriers, the Bank has generally sought to trim employment in the bureaucracy, keep taxes low, and privatize publicly owned enterprises (Crawford 2006;Toussaint 2008;World Bank 2002). For example, Susan Engel (2010) found in an analysis of 50 national PRSPs, that 96 percent of them had commitments to limiting state budgets. The relatively pro-private sector orientation of the Bank is apparent in its strong disapproval of government corruption (bribe-takers) but surprisingly little focus on private-sector corruption (bribe-givers) (Berkman 2008;Crawford 2006;Engel 2010).…”

“…For example, Susan Engel (2010) found in an analysis of 50 national PRSPs, that 96 percent of them had commitments to limiting state budgets. The relatively pro-private sector orientation of the Bank is apparent in its strong disapproval of government corruption (bribe-takers) but surprisingly little focus on private-sector corruption (bribe-givers) (Berkman 2008;Crawford 2006;Engel 2010).…”

“…In addition to promoting the private sector through protection of property rights and a "market-friendly legal system" (Weaver 2008:96), analysts argue that the Bank also operates through a minimal-government or "minimal state" paradigm (Engel 2010;Kaufmann et al 2007;Weaver 2008). In addition to encouraging political decentralization and aiming to lower inflation rates, budget deficits, and trade barriers, the Bank has generally sought to trim employment in the bureaucracy, keep taxes low, and privatize publicly owned enterprises (Crawford 2006;Toussaint 2008;World Bank 2002).…”

“…Foreign aid from rich countries to poor countries is often tied to improving governance, a main thrust of the World Bank's Comprehensive Development Framework, the OECD's Paris Declaration on Aid Effectiveness, and the Bush Administration's Millennium Challenge Account (Engel 2010;Hout 2007;Neumayer 2003;OECD 2005;Weaver 2008). As a result, low-income countries failing to demonstrate better "governance" are likely to see a reduction in development aid from abroad (Weiss 2000).…”