THE WASHINGTON CONSENSUS: THEN AND NOW

Abstract

Despite the third decade of market reforms, their successes in the Ukrainian economy remain quite modest. This unwittingly raises questions about quality of national transformations and possible
directions of their improvement. Since the international institutions led by the IMF are tailoring the financial “adjustment” of the reforming countries, there is an obvious interest in their definition of an effective economic policy, which prior to the global crisis of 2008–2009 was seen as the Washington consensus.
The initial popularity of the Washington consensus began to melt in the late 1990s
after the Asian crisis and the disappointing outcomes of neoliberal reforms in a number of
emerging markets and post-soviet economies. These reputational losses turned out to be
all the more serious that the Washington consensus did not stand still and managed to offer its improved version – “second generation reforms”.
However, their shortcomings, in turn, were revealed during the global crisis of 2008–
2009: both in its unpredictability and in the methods of overcoming, when industrialized countries practically abandoned almost all the postulates of the Washington consensus, giving preference to alternative Keynesian instruments.
In the case of small, commodity economies, the Washington consensus does not take
into account their rigid link to global cycles of raw material conjuncture, the overcoming
of which requires technological development and modernization of national industries.
However, these tasks lie outside the framework of the reforms of the “first” and “second”
generations, leaving open the question on macro-financial stability of such economies.
This conclusion is all the more fundamental that despite the changing rhetoric – since the term “the Washington consensus” has practically disappeared from the official lexicon of international organizations – their stabilization programs continue to conceptually coincide with the set of “second generation reforms”.