Title: A Keynesian alternative to the Washington consensus policies for international development
Author: John Marangos
Address: Department of Economics, University of Crete, Rethymno 74100, Crete, Greece
Abstract: The Washington consensus was identified as a neoliberal manifesto and received a vast amount of criticism. In response, lately, John Williamson has offered a new set of policies in the 'After the Washington Consensus'. The aim of this paper is to determine whether there has been any substantial change in the recommended policies, and to offer a Keynesian proposal. Due to space limitations, the Keynesian perspective developed concentrates on: the state interventionist policies used by the industrialised countries; the excessive priority given to price stability instead of full employment; recycling the country's savings back into the domestic economy in coordination with industrial policy and domestic financial regulation; supporting interest rate policies that aim at a stable and permanently low level of interest rates and to direct credit to specific parts of the economy; regulation of foreign banks and reinforcement of fair competition; and the role of globalisation in development and capital controls.
Keywords: Washington consensus; Keynes; international development; global markets; economic development; consensus policies; state intervention; price stability; full employment; savings recycling; industrial policy; domestic financial regulation; stable interest rates; low interest rates; credit; bank regulation; foreign banks; fair competition; globalisation.
Int. J. of Trade and Global Markets, 2014 Vol.7, No.1, pp.67 - 85
Submission date: 18 Oct 2012
Date of acceptance: 13 Mar 2013
Available online: 17 Jan 2014