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American Economic Association

Goodbye Washington Consensus, Hello Washington Confusion? A Review of the World Bank's"Economic Growth in the 1990s: Learning from a Decade of Reform"Author(s): Dani RodrikSource: Journal of Economic Literature, Vol. 44, No. 4 (Dec., 2006), pp. 973-987Published by: American Economic AssociationStable URL: http://www.jstor.org/stable/30032391Accessed: 20/08/2009 14:44

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Journalof EconomicLiteratureVol.XLIV(December2006),pp. 973-987

Goodbye Washingtononsensuse l l o Washingtononfusion?

R e v i e w o t h W o r l d B a n k sconomic G r o w t h i n t h 1 9 9 0 s :

Learning f r o m D e c a d e o R e f o r mDANI RODRIK*

Proponentsand critics alike agree that the policies spawned by the WashingtonConsensus have not produced the desired results. The debate now is not overwhetherthe WashingtonConsensus s dead or alive,butover what will replace t. Animportantmarker n this intellectual errain is the WorldBank'sEconomicGrowthin the 1990s:Learning rom a Decade of Reform(2005).With ts emphasisonhumil-ity, policy diversity,selectiveand modest reforms,and experimentation,his is aratherextraordinary ocumentdemonstratingheextenttowhich the thinkingofthedevelopmentpolicy communityhas been transformed ver the years.But there areothercompetingperspectivesaswell. One(trumpeted lsewhere n Washington) utsfaith on extensive institutional reform, and another (exemplified by the U.N.MillenniumReport)puts faith on foreign aid. Sorting intelligently among thesediverseperspectivesrequiresan explicitlydiagnosticapproachthat recognizes hatthe bindingconstraintson growth differ rom settingto setting.

1. IntroductionLife used to be relatively imple or thepeddlersof policyadvice in the tropics.Observing he endlesslistof policyfollies to* HarvardUniversity. amgratefulto RogerGordonforhis encouragementand comments;to RicardoHausmann,Lant Pritchett, and John Williamson for their reactions;and to RobertoZaghafor the many insightshe has sharedwith me over the last few years.JohnWilliamsonremind-ed me that my title is far from original,havingbeen usedin almost identical form by Moises Naim (1999). In itspresent form, the title also makes allusion to the classicpaper by CarlosDiaz-Alejandro 1985).

which poor nations had succumbed, anywell-trainedandwell-intentionedeconomistcould feel justified in utteringthe obvioustruthsof the profession:get yourmacrobal-ances in order, ake the stateoutof business,give markets ree rein. "Stabilize,privatize,andliberalize"became the mantraof a gen-erationof technocratswho cut theirteeth inthe developingworld and of the politicalleaderstheycounseled.Codified n JohnWilliamson's1990)well-known WashingtonConsensus, this adviceinspireda waveof reforms n LatinAmerica

973


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974 Journal of EconomicLiterature,Vol.XLIV(December 2006)and Sub-SaharanAfrica that fundamentallytransformed he policy landscapein thesedevelopingareas.With the fall of the BerlinWall and the collapseof the Soviet Union,former socialistcountriessimilarlymade abold leap toward markets.There was moreprivatization, eregulation, ndtrade iberal-ization n LatinAmericaandEasternEuropethanprobablyanywhereelse at anypoint ineconomic history. In Sub-SaharanAfrica,governmentsmovedwithless convictionandspeed, but there too a substantialportionofthe new policy agenda was adopted:statemarketingboardswere dismantled,nflationreduced, trade opened up, and significantamountsof privatization ndertaken.1Such was the enthusiasm for reform inmany of these countries that Williamson'soriginal ist of do's and don'tscame to lookremarkablyame and innocuousby compar-ison. In particular,financial liberalizationandopeningup to internationalcapital lowswent much farther than what Williamsonhad anticipated(or thoughtprudent)fromthe vantage point of the late 1980s.Williamson's(2000) protestationsnotwith-standing, he reformagendaeventually ameto be perceived,at leastby its critics,as anovertly ideological effort to impose "neo-liberalism" nd "market undamentalism"ndevelopingnations.The one thingthatis generallyagreedonabout the consequencesof these reforms sthat things have not quite workedout theway they were intended. Even their mostardentsupportersnow concede thatgrowthhas been below expectations in LatinAmerica(and the "transition risis"deeperandmore sustained hanexpectedin formersocialisteconomies). Not only were successstories in Sub-SaharanAfricafew andfarin

1 To cite just one example, fifty percent or more of thestate-owned enterpriseswere divested duringthe 1990s inthe Central African Republic, Cote d'Ivoire, Gambia,Ghana, Guinea-Bissau, Kenya, Mali, Tanzania, Togo,Uganda, and Zambia(JohnNellis 2003). On the extent oftrade reformin Africa,see VinayeD. Ancharaz(2003).

between,butthe market-orientedeformsofthe 1990s provedill-suited to deal with thegrowingpublic healthemergencyin whichthe continentbecameembroiled.Thecritics,meanwhile,feel that the disappointing ut-comes havevindicated heirconcerns aboutthe inappropriatenessf the standard eformagenda.While the lessons drawnby propo-nents andskepticsdiffer, t is fairto saythatnobody really believes in the WashingtonConsensus anymore.2The questionnow isnot whether the WashingtonConsensusisdeador alive; t is whatwill replace t.The World Bank'sEconomic Growth inthe 1990s: Learning from a Decade ofReform (2005, henceforth LearningfromReform) s one of a spateof recentattemptsatmaking ense of the factsof the lastdecadeand a half,andprobablyhe mostintelligent.In fact,it is a ratherextraordinaryocumentinsofar as it shows how far we have comefrom the original WashingtonConsensus.There are no confident assertionshere ofwhatworksandwhat doesn't-and no blue-prints for policymakers to adopt. Theemphasis s onthe need forhumility,orpol-icy diversity, for selective and modestreforms,andforexperimentation. Thecen-tral message of this volume," GobindNankani, the World Bank vice-presidentwho oversaw he effort,writesin the prefaceof the book, "isthat there is no uniqueuni-versalset of rules .. [W]eneed to get awayfrom formulaeand the search for elusive'best practices'. ." (p. xiii).3 Occasionally,the reader has to remind himself that thebook he is holdingin his hands is not some

2 In a book edited with Pedro-PabloKuczynski n 2003,John Williamson laid out an expanded reform agenda,emphasizing crisis-proofing of economies, "second-generation" reforms, and policies addressing inequalityand social issues (KuczynskiandWilliamson2003).3Roberto Zagha led the team that prepared thereport. Members of the team were J. Edgardo Campos,James Hanson, Ann Harrison, Philip Keefer, loannisKessides, SarwarLateef, Peter Montiel, Lant Pritchett,S. Ramachandran, Luis Serven, Oleksiy Shvets, andHelena Tang.


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Rodrik:Goodbye WashingtonConsensus,Hello WashingtonConfusion? 975radicalmanifesto,but a reportpreparedbythe seat of orthodoxyin the universe ofdevelopmentpolicy.

2. TheRecordHere is how Learningrom Reformsum-marizes the surprises of the 1990s. First,there was an unexpectedly deep and pro-longed collapsein outputin countries mak-ing the transition from communism tomarketeconomies.Morethana decade intothe transition,manycountrieshad still notcaught up to their 1990 levels of output.

Second, Sub-SaharanAfrica failed to takeoff, despite significant policy reform,improvements n the political and externalenvironments,and continued foreign aid.The successes were few-with Uganda,Tanzania,and Mozambique he most com-monly cited instances-and remainedfrag-ile more than a decade later.Third, therewere frequentandpainfulfinancialcrisesinLatin America, East Asia, Russia, andTurkey.Most had remainedunpredictedbyfinancialmarketsandeconomistsuntilcapi-tal flows startedto reverse very suddenly.Fourth,the Latin Americanrecovery n thefirst half of the 1990s proved short-lived.The 1990s as a whole saw less growth inLatin Americain per capita GDP than in1950-80, despite the dismantling of thestate-led,populist,and protectionistpolicyregimes of the region. Finally, Argentina,the poster boy of the LatinAmericaneco-nomic revolution, came crashingdown in2002 as its currencyboardprovedunsustain-able in the wake of Brazil'sdevaluation nJanuary1999.Significantly, he period since 1990 wasnot a disaster for economic development.Quite to the contrary.From the standpointof globalpoverty, he last two decadeshaveproved the most favorable that the worldhas ever experienced. Rapid economicgrowth in China, India, and a few otherAsian countries has resultedin an absolutereduction in the number of people livingin

extreme poverty.4The paradox s that thatwas unexpected too China and Indiaincreasedtheir relianceon market orces,ofcourse, but their policies remainedhighlyunconventional.With high levels of tradeprotection, lack of privatization,extensiveindustrialpolicies, and lax fiscal and finan-cial policies through the 1990s, these twoeconomies hardlylooked like exemplarsofthe WashingtonConsensus. Indeed, hadtheybeen dismalfailures nstead of the suc-cesses they turned out to be, they wouldhave arguablypresented strongerevidencein support of Washington Consensuspolicies.5Along with this telling, if anecdotal,evi-dence has come a more skepticalreadingofthe cross-national relationship betweenpolicy reform and economic growth.Characteristically,t is the WorldBank tselfthat has been prone to make grandioseclaimson the impactofpolicyreform.Inoneparticularly egregious instance cited byWilliam Easterly (2005), Paul Collier andDavid Dollar (2001) argued that policyreform of the conventionaltype could cutworld poverty by half. Work by Easterly(2005) and Francisco Rodriguez (2005)show that the data do not support suchclaims. The evidence that macroeconomicpolicies, price distortions, inancialpolicies,and tradeopennesshavepredictable,robust,and systematiceffects on national growthrates is quite weak-except possiblyin theextremes. Humongous fiscal deficits orautarkictrade policies can stifle economicgrowth,but moderateamounts of each areassociated with widely varying economicoutcomes.6

4According to World Bank estimates, there wereroughly400 millionfewer people livingbelow the $1 a daypoverty line in 2001 compared to two decades earlier(Chen and Ravallion2004).5 See Dani Rodrik(2005a) for an interpretative survey

of recent growthexperience.6 See also Rodrik(2005b) for a general methodologicalcritique of growthregressionswith policy variables on theright-handside.


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976 Journalof EconomicLiterature,Vol. XLIV(December2006)Thequestion s howtointerprethis recentexperience,and how to turn the interpreta-tion into concrete policy advice. HereLearningrom Reformmakes some valuable

progress. summarize omeof the maincon-clusionsbelow,emphasizinghose thatdepartmoststrongly rom the earlierapproach.3. TheInterpretation

One of the insights of LearningfromReform s that the conventionalpackageofreformswas too obsessed with deadweight-loss triangles and reaping the efficiencygainsfromeliminating hem,and did notpayenoughattention o stimulating he dynamicforces that lie behind the growth process.Seekingefficiencygainsdoes not amounttoa growth strategy.Althoughthe reportdoesnot quite put it in this way,what I think theauthorshavein mind is that marketor gov-ernment failures hat affectaccumulation rproductivitychange are much more costly,and hence more deservingof policy atten-tion, thandistortions hatsimplyaffectstaticresourceallocation.They mayalso be harderto identify.Focusingon the latter nstead ofthe former results in small benefits, andcouldeven turn out to be counterproductivewhen policy makersface a political budgetconstraint(more reformin one area meansless reform n another).A second conclusion is that the broadobjectives of economic reform-namelymarket-orientedncentives,macroeconomicstability,and outward orientation-do nottranslatentouniqueset of policyactions.Inthe words of the Report, "The principlesof...'macroeconomic stability, domesticliberalization, and openness' have beeninterpretednarrowlyo mean 'minimize is-cal deficits, minimize inflation, minimizetariffs,maximizeprivatization,maximize ib-eralizationof finance,'with the assumptionthat the moreof these changesthe better,atall times and in all places-overlooking thefact that these expedientsare just some ofthe ways in which these principlescan be

implemented" p. 11, emphasis n the origi-nal). The authorsgo on to point out thateach of these ends can be achieved in anumber of ways. For example,tradeopen-ness can be achievedthrough owerimporttariffs, but also through duty drawbacks,export subsidies, special economic zones,export processing zones, and so on. Thisrenunciationof standard"bestpractice" nWorld Bank policy advice is quite re-markable, ndmust nothave come withoutasignificantnternalfight.Third,differentcontextsrequiredifferentsolutions to solving common problems.Enhancing private investment incentivesmay require mproving he securityof prop-erty rights n one countrybut enhancing hefinancial sector in another. Technologicalcatch-upmaycall for betteror worsepatentprotection,dependingon the level of devel-opment.Thisexplainswhycountries hat aregrowing-the report cites Bangladesh,Botswana, Chile, China,Egypt, India, LaoPDR, Mauritius,Sri Lanka, Tunisia, andVietnam--have such diversepolicy configu-rations,andwhy attempts o copysuccessfulpolicy reforms n anothercountryoften endup in failure.Fourth,Learningrom Reformargues hatthere has been a tendencyto exaggerate headvantages f rulesover discretionngovern-ment behavior.Rules were meant to disci-plinethe malfeasance f governments.But itturnsout that"governmentiscretion annotbe bypassed" p. 14). Argentina's urrencyboard,whichremovedmonetarypolicyfromthe hands of the government,worked wellwhen the bindingconstraintwaslackof cred-ibility,but led to disastrousoutcomeswhenthe bindingconstraint ecamean overvaluedcurrency.There is no alternative o improv-ing the processesof decisionmakingbetterchecks and balances,better guidingprinci-ples, better implementation) such thatdiscretioneads to better outcomes.

Finally, eformeffortsneed to be selectiveand focus on the bindingconstraintson eco-nomicgrowthrather han take a laundry-list


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Rodrik:Goodbye WashingtonConsensus,Hello WashingtonConfusion? 977approach tlaWashingtonConsensus.Whilethere is no foolproofmethod of identifyingthese constraints,common sense and eco-nomic analysiscan help (see below). Wheninvestmentis constrainedby poor propertyrights, improving financial intermediationwill not help.When it is constrainedby highcost of capital, mprovingnstitutionalquali-ty will hardlywork. Experimentationandlearning about the nature of the bindingconstraints,and the changes therein, aretherefore an integral part of the reformprocess.Eventhoughcountriesmayface sit-uations nwhichmanyconstraints eed tobeaddressed simultaneously, he report jud-ges these situations to be rare: "In mostcases, countries can deal with constraintssequentially, few at a time"(p. 16).Takingthese conclusions at face value,whattheyentail s nothing ess than a radicalrethink of development strategies. Ofcourse, it would be naive to think that theWorld Bank'spracticewill thereforechangeovernight.There is little evidence thatoper-ational work at the Bank has internalizedthese lessonsto any significant xtent.7And,as I will discussbelow,there arecontendinginterpretations f whathas gone wrongandhowto moveforward.But the mere fact thatsuchviewshave been put forwardn an offi-cial World Bankpublication s indicativeofthe changingnatureof the debateandof thespacethat is opening upwithinorthodox ir-cles for alternativevisions of developmentpolicy.

4. TheAlternatives : InstitutionsAround the same time that the WorldBankwas grapplingwith the lessons of the1990s, its sisterinstitutionacross the street,the InternationalMonetaryFund (IMF),7 Along with Ricardo Hausmannand the lead author ofthe World Bank report, Roberto Zagha, I have beeninvolvedin an effort to bringsome of these implicationsto

bear on the country operationalwork at the Bank. Onething we have discovered is how difficult it is to wean theBank's country economists away from the Washington-Consensus, laundry-list,best-practice approachto reform.

put out a document that focused on muchthe same issues in the context of LatinAmerica(AnoopSinghet. al. 2005). This isan equally remarkable document whichshows that in Washington here is anythingbut consensusthese days.The IMF reportstarts rom the same basicpremise--growthhas been disappointing-but its basicargu-ment could not be more different.Accordingto its authors,the problem wasnot with the approach aken to reform,butthatit didnotgo deep and farenough. Usingthe report's own words, "reforms wereuneven and remainedincomplete"(p. xiv)."Moreprogresswas made," he IMF reportclaims,"withmeasures hathad lowup-frontcosts, such as privatization, relative toreforms that promised greater long-termbenefits, such as improvingmacroeconomicand labor market nstitutions,andstrength-ening legalandjudicialsystems"p.xiv).Thesamediagnosis s expressedsuccinctlyn thetitle of one of Anne Krueger's peeches onpolicy reform:"MeantWell, Tried Little,Failed Much" (Krueger2004). From thisperspective,the failureshave to be chalkedup to too little reform of the kind thatWashingtonhas advocatedall alongand notto the nature of these reforms itself.8 Thepolicy implication hat follows is simple:domore of the same,and do it well.Severalkeyideasunderpin hisinterpreta-tion of the evidence. First,politicalleadersmayhavehad the talk,but they didn'tquitehave the walk: heircommitment o genuinereformwas often "skin-deep"nd there was"lack of follow-through" Krueger 2004).Second,andmorefundamentally,ven com-mitted reformers stopped well short ofundertaking he full gamut of institutionalchanges needed to create well-functioningmarketeconomies.Regulatoryand supervi-sory institutionsin product and financial

8 But even within the IMF, there are divergent views.The IMF's Evaluation Office (nominally ndependent andheaded until recently by a distinguishedoutsider,MontekAhluwahlia,but staffed largely by IMF economists) hasproduced reports that often reach different conclusions.


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978 Journal of EconomicLiterature,Vol. XLIV(December2006)TABLE1THE AUGMENTED ASHINGTONONSENSUS

OriginalWashingtonConsensus1. Fiscaldiscipline2. Reorientation f public expenditures3. Taxreform4. Financial iberalization5. Unified andcompetitiveexchangerates6. Trade iberalization7. Openness o DFI8. Privatization9. Deregulation10. SecurePropertyRights

marketsprovedtoo weak. Poor governanceandcorruptionremaineda problem.Courtsandthejudiciarywere ineffective.And labormarket institutions were not sufficiently"flexible."Of course this second point, about thelack of emphasison institutionalreform,isitself an implicit repudiationof the originalversion of the WashingtonConsensus, nso-faras the latterdid not featureinstitutionalreform of the type that Kruegerand theIMF have in mindin theirinterpretation fthe 1990s. Most of the items in Williamson'soriginal list were relatively simple policychanges(liberalize rade,eliminatecurrencyovervaluation, educe fiscal deficits,and soon) thatdidnot requiredeep-seated nstitu-tional changes. Williamson did include"property ights"n his list,but that was thelast item on the list and came almost as anafterthought.Whathas become clearerto practitionersof the WashingtonConsensus over time isthat the standardpolicyreformsdid notpro-duce lastingeffects if the backgroundnsti-tutional conditions were poor. Soundpolicies needed to be embedded in solidinstitutions.Moreover, there were signifi-cant complementarities across differentareas of reform. Tradeliberalizationwould

"Augmented"WashingtonConsensusthe previous10 items,plus:11. Corporate overnance12. Anti-corruption13. Flexible abormarkets14. WTOagreements15. Financial odes andstandards16. "Prudent"capital-accountpening17. Non-intermediateexchangerateregimes18. Independentcentralbanks/inflationtargeting19. Socialsafetynets20. Targetedpovertyreduction

not work if fiscal institutions were not inplaceto makeup forlost traderevenue,cap-ital markets did not allocate finance toexpanding ectors,customsofficialswere notcompetentand honestenough, abor-marketinstitutionsdid not workproperly o reducetransitionalunemployment,and so on. Theupshot is that the original WashingtonConsensus has been augmentedby a longlist of so-called"second-generation"eformsthat are heavilyinstitutionaln nature.Thepreciseenumerationof these requisite nsti-tutionalreformsdepends on who is talkingandwhen,and oftenthe list seems to extendto whatever t is that the reformersmaynothave had a chanceto do-which is one of theproblems that I will discuss below.Nonetheless, one possible rendition isshown in table 1, where I have listed tensecond-generationeforms o maintainsym-metry with the original WashingtonConsensus.This focus on institutionshasalsoreceiveda strongboost from the (largelyunrelated)rediscovery f institutionsas a driverof long-termeconomicperformancenthe empiricalliteratureon economicgrowth.Inparticular,Daron Acemoglu, Simon Johnson, andJamesA. Robinson's 2001) importantworkdrove home the point that the securityof


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Rodrik:GoodbyeWashingtonConsensus,Hello WashingtonConfusion? 979propertyrightshasbeen historically erhapsthe singlemostimportant eterminant fwhysome countries grew rich and othersremained poor. Going one step further,Easterlyand RossLevine(2003)showedthatpolicies (i.e., trade openness, inflation,andexchangerateovervaluation)o notexertanyindependenteffect on long-termeconomicperformanceonce the quality of domesticinstitutionsis included in the regression.Often,thisworkhastakenaformthatmaybecalled "institutions fundamentalism"-torelateit to (anddistinguisht from)the ear-lier wave of "market fundamentalism."Gettingthe institutionsrightis the mantraof the former,just as getting prices rightwas the mantra of the latter. TheAugmented WashingtonConsensus derivesits academicsupport argelyfrom this workon the primacyof institutions.9' 0Taken o its logicalconclusion, he focus oninstitutionshas potentially debilitatingsideeffectsforpolicyreformers. nstitutions rebytheirverynaturedeeplyembedded n society.If growth ndeedrequiresmajor nstitutionaltransformation-in the areasof rule of law,property ightsprotection, overnance, ndsoon-how canwe not be pessimisticabout heprospects orgrowth n poorcountries?Afterall,such nstitutionalchanges ypically appenveryrarely-perhapsin the aftermath f war,civilwars,revolutions,nd othermajorpoliti-cal upheavals.The cleanestcases that linkinstitutionalchange to growth performanceoccur ndeed atsuchhistoricaljunctures:on-sider forexample he splitbetween EastandWestGermany,rof NorthandSouthKorea.Butwhatarepoorcountries hatdo notwantto go through uchupheavalso do?

9A mea culpa here: My article on "Institutions Rule"(Rodrik, Arvind Subramanian, and Francesco Trebbi2004) is frequently seen as being in the frontline of insti-tutions fundamentalism (although there are importantcaveats in the second half of the paper).10The most serious challenge to institutions funda-mentalism has been launched by Edward L. Glaeser,Rafael La Porta, Florencio Lopez-de-Silanes, and AndreiShleifer (2004) who find the empirical approach in theinstitutions-cause-income literature flawed and think it ishuman capital (and dictators)that cause growth.

Learningrom Reformpays lip servicetothe importance of institutions,but to itscredit it steers clear from too muchinstitu-tions determinism.That is wise becausetheAugmented WashingtonConsensus' focuson institutionalchange provesto be largelyadead-endupon closer look. There are twomajorreasons for this, which I summarizehere.First, the cross-national literature hasbeen unable to establisha strongcausal inkbetween any particular design feature ofinstitutionsand economicgrowth.We knowthat growth happens when investors feelsecure, but we have no idea what specificinstitutionalblueprintswill make them feelmore secure in a given context. The litera-ture gives us no hint as to what the rightlevers are. Institutional function does notuniquelydetermine nstitutionalorm.Ifyouthink this is splittinghairs, ust comparetheexperienceof Russia and Chinain the mid-1990s. China was able to elicit inordinateamounts of private nvestmentunder a sys-tem of public ownership(townshipand vil-lage enterprises), something that Russiafailed to do under Western-styleprivateownership. Presumably this was becauseinvestorsfelt more secure when they werealliedwith local governmentswith residualclaims on the streamof profitsthan whenthey had to entrust their assets to privatecontracts hatwouldhaveto be enforcedbyincompetentand corruptcourts.Whateverthe underlyingreason, China'sexperiencedemonstrates how common goals (protec-tion of propertyrights) can sometimes beachieved under divergentrules. This is atheme that Learningfrom Reform loudlytrumpets.Second, we should not forget thatAcemoglu, Johnson, and Robinson (2001)workand other relatedresearch ocusedonlong-termeconomicperformance.The typi-cal dependent variablein this line of literatureis the level of income in some recent year,notthe rate of economic growth over a particularperiod. When institutional indicators are


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980 Journal of EconomicLiterature,Vol. XLIV(December 2006)introducedngrowth regressions,he resultsare muchweaker and less robust.Empiricalworkfocusingon transitions nto and out ofgrowthhas found little evidence that large-scale institutionalransformationsplaya role(Hausmann, Pritchett, and Rodrik 2005;BenjaminF. Jones and BenjaminA. Olken2005). To take two important examples,China embarkedon rapidgrowth n the late1970s with changes in its system of incen-tives that were marginal n nature(andcer-tainly with no ownership reform orsignificantchange in its trade regime earlyon), and India's ransition o high growth nthe early1980s was preceded (or accompa-nied) by no identifiable institutionalchanges.These and other experiences sug-gest that a policymaker nterestedin ignit-ing economic growth maybe better servedby targeting he mostbindingconstraints neconomic growth-where the bang for thereform buck is greatest-than by investingscarcepoliticaland administrativecapitalonambitiousinstitutionalreforms.Of course,institutional eformwillbe needed eventual-ly to sustaineconomicgrowth.But it maybeeasier and more effective to do that whenthe economyis alreadygrowingand its costscanbe spreadovertime.In the limit, the obsession with compre-hensive institutional eform eadsto a policyagendathatis hopelesslyambitiousandvir-tually mpossible o fulfill.Tellingpoorcoun-tries in Africa or Latin Americathat theyhave to set their sightson the best-practiceinstitutionsof the United Statesor Swedenis like telling them that the only way todevelop is to become developed-hardlyuseful policy advice Furthermore, here issomething nherentlyunfalsifiable boutthisadvice. So open-ended is the agenda thateven the mostambitious nstitutional eformefforts canbe faulted ex post forhaving eftsomethingout. So you reformed nstitutionsin trade,propertyrights,and macrobut stilldidnot grow?Well, it must be that you didnot reform abor-marketnstitutions.Youdidthat too but still did not grow?Well, the

problemmust be with lackof safetynets andinadequatesocial insurance. You reformedthose with little effect? Obviously he prob-lem was that your political system wasunable to generate sufficient credibility,lock-in,and legitimacyfor the reforms. Inthe end, it is alwaysthe advisee who fallsshort,and never the advisorwho is provedwrong.

5. TheAlternatives I:ForeignAidYet another vision of reform strategyisoffered by the U.N. Millennium Project

(2005),led by JeffreySachs.This vision s noless holistic than thatof the institutions un-damentalists,althoughthe elements of thepackageand the weightplacedon each dif-fer. The U.N. Projectcallsfor a comprehen-sive and simultaneous increase in "publicinvestments, capacity building, domesticresourcemobilization,and officialdevelop-ment assistance,"while providing"a frame-work for strengthening governance,promotinghumanrights,engagingcivilsoci-ety, and promotingthe privatesector"(p.xx).But it alsoabounds n concretedetailsofwhat can and shouldbe done. Some of the"quick-win ctions"t proposesincludefreedistribution f bed netsagainstmalaria, nd-ing user fees for primary education andessentialhealthservices,expansionof schoolmeals programs in hunger zones, andreplenishmentof soil nutrients on small-holder agriculture through subsidized orfree distribution f chemicalfertilizers.The U.N. MillenniumProjectviews cur-rent levels of foreignaid to be a significantconstraint on the achievement of globalpovertyreduction.Hence it calls for a sig-nificant ncrease n aid-a doublingof annu-al official development assistance to $135billion in 2006, rising to $195 billion by2015-to finance public investments inhuman capital and infrastructureand todevelop the technologiesneeded to trans-formhealth andagriculturenpoorsocieties.Sachsand his collaborators xhibit a certain


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Rodrik:GoodbyeWashingtonConsensus,Hello WashingtonConfusion? 981impatiencewith those who argue that thereal constraint s poorinstitutionsand weakgovernance, and that large aid flows aremore likely to disappear n the pockets ofcorruptofficialdomthan to foster develop-ment. They arguethat manyof the poorestcountries of the world (e.g., Benin, Mali,Senegal)havein fact madesignificant tridesin improvingtheir economic and politicalinstitutions,andthat in anycase the invest-ments in humancapitalthat they advocatewouldlikelyfoster betterinstitutionsas well.In theirview,the obsessionwithgovernanceis oftenjust an excuse for rich countriesnotdoingmoreto help poornations.The theoryunderlyinghe U.N. MilleniumProject's iewof theworld s that low-incomecountries n Africa(andpossiblyelsewhere)arestuck n a low-levelequilibrium, "pover-ty trap" Sachset al. 2004).The neoclassicalproductionunctionassumes hatthe margin-al productof capital s high at low levels ofdevelopmentwhen heeconomyhas lowlev-els of capital).But if there aresome increas-ingreturns o scale(e.g.,settingup a modernfactory equiresa minimumnvestment o bemade), complementarities e.g., running amodernfactoryneeds an adequatesupplyofeducated workers), or negative feedbackeffects (e.g., an increasein incomes raisespopulationgrowth),the marginalreturntocapital s initiallyow rather hanhigh.Smallincrementsto capitalyield very little fruit,and the economy can have multiplesteadystates,one of which involvesa poverty rap.Sinceit does notpayto invest,householdsdonotsave and the economyremainspoor.Thisveryold idea (goingbackat least to Paul N.Rosenstein-Rodan(1943) and Richard R.Nelson (1956)) can be used to justifya "bigpush"-i.e., a large-scale, imultaneous ffortto raise the capital stock (public, private,human) to levels where the neoclassicalforces of convergencebegin to operateandthe economybreaks ree of the poverty rap.

Severalquestionsare raisedby this takeon Africanpoverty.First,what do we makeof the fact that historicallyew low income

countrieshaveembarkedon high growth nthisbig-push ashionorthrough he infusionof largeamountsof foreign aid? As Sachs'scritics ove topointout, there has not been ashortageof foreignaid in Africa,and someofthe most rapidly growingcountriesof thepast have done so withoutrelyingmuch onWestern aid. Sachs and his collaboratorscounter that Africa s specialbecause it suf-fers from high transport costs, low-productivity griculture, veryheavydiseaseburden,adversegeopolitics,and slow diffu-sion of technology rom abroad Sachset al.2004, pp. 130-31), all of which make theregion particularly rone to a povertytrap.But couldn'tone havesaidmuch the same ofVietnam,a war-torn, mpoverishedcountryfacingeconomic sanctions rom the UnitedStates,which took off in the late 1980seventhough it did not receive much aid fromWesternnationsuntil the mid-1990s?Or what do we make of the factthateco-nomic growth is actually not uncommonamong Sub-SaharanAfricannations them-selves?The theoryof poverty rapssuggeststhat these countries are stuck in low-levelequilibria rom whichthey find it veryhardto extricate hemselves.The realityseems tobe somewhatdifferent.MostAfricancoun-tries have shownthemselvescapableof pro-ducing economic growth over nontrivialtimehorizons.AtellingstatisticproducedbyJones and Olken (2005) is that three-quartersof Sub-SaharanAfricancountrieshavegrownfastenoughto experiencesomeconvergencewithU.S. incomelevels overatleast one ten-year period since 1950.Similarly, in Hausmann, Pritchett, andRodrik (2005), where we studied growthaccelerations ince the 1950s,we found suchaccelerations o be quite frequent in low-incomecountries, ncludingamongthose inAfrica.In fact, growthaccelerations urnedout to be more common in low-incomecountries than in middle- or high-incomecountries, in line with the neoclassicalgrowthmodel.The troubleseems to be notthat poor Africancountries are unable to


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982 Journal of EconomicLiterature,Vol.XLIV(December2006)grow,butthattheirgrowthspurtseventuallyfizzle out. This suggests a rather differentremedy,one that focusesin the short run onselectivelyremovingbindingconstraintsongrowth(whichmaywell differ fromcountryto country),and in the medium-to longer-run on enhancing resilience to externalshocks.11I will elaborateon this remedybelow.

Ultimately,where the U.N. MillenniumProject differs most from LearningfromReform s in the extentof knowledgethat itassumes we have and consequentlyin thedegree of self-confidenceexhibited by itsauthors.The U.N. Millennium Project isbased on the view that we basicallyknowenough to mount a bold, ambitious, andcostly effort to eradicateworldpoverty.Wehave successfully dentified all the marginsthat matter,and we better move on all ofthemsimultaneously. earningrom Reform,by contrast, s an ode to humility.Whatwehavelearned, t says mplicitly,s the follyofassuming hatwe know too much.We needto downplay grandiose claims, move cau-tiously, and concentrateour efforts wherethe payoffsseem the greatest.

6. A PracticalAgendaor FormulatingGrowthStrategiesBut what is the operationalcontent ofsuch a cautious, experimentalistapproach?If we adopt the path recommended by

Learningrom Reform,can we sayanythingmore than "differentstrokes for differentfolks"or avoid a nihilistic attitude where"everythinggoes"?Learningfrom Reformsayslittle that is useful on this, but I thinkthe answer s "yes"o bothquestions.Let mebrieflyoutlinehere a wayof thinkingaboutgrowth strategiesthat avoids some of theobviouspitfalls.

11For an empirical analysiswhich emphasizes the roleof external shocks (in interaction with weak institutions) asthe culprit for growth collapses, see Rodrik(1999).

Thisapproach onsistsof threesequentialelements. First, we need to undertake adiagnostic analysisto figureout where themost significant constraintson economicgrowthare in a given setting. Second, weneed creativeandimaginativepolicy designto targetthe identifiedconstraintsappropri-ately.Third,we need to institutionalizeheprocess of diagnosisand policy responsetoensure that the economy remainsdynamicandgrowthdoes not fizzle out.6.1 Step1:GrowthDiagnostics

Policy reforms of the (Augmented)WashingtonConsensustype are ineffectivebecause there is nothing that ensures thattheyareclosely targetedonwhatmaybe themost important constraintsblocking eco-nomic growth. The trick is to find thoseareas where reformwill yield the greatestreturn. Otherwise, policymakersare con-demned to a spray-gun pproach:hey shoottheir reformgun on as many potentialtar-gets as possible, hopingthat some will turnout to be the onestheyarereallyafter.A suc-cessful growthstrategy,by contrast,beginsby identifying he mostbindingconstraints.But can this be done? In Hausmann,Rodrik,and Velasco (2005), we develop aframeworkhatwe believesuggestsapositiveanswer.We begin with a basicbut powerfultaxonomy(see figure 1). In a low-incomeeconomy, economic activity must be con-strainedby at leastone of the following wofactors: itherthe cost of financemustbe toohighortheprivatereturn o investmentmustbe low. If the problemis with low privatereturns,that in turn must be due either tolow economic (social)returnsor to a largegap betweensocialandprivatereturns(lowprivate appropriability).The first step inthe diagnostic analysis is to figure outwhich of these conditionsmore accuratelycharacterizeshe economy n question.Fortunately,t ispossibleto makeprogressbecauseeach of these syndromes hrowsoutdifferentsets of diagnosticsignalsor gener-ate different patterns of comovements in


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Rodrik:Goodbye WashingtonConsensus,Hello WashingtonConfusion? 983

Figure 1. GrowthDiagnostics

economic variables. For example, in aneconomy that is constrained by cost offinancewe would expect real interest ratesto be high,borrowers o be chasing enders,the currentaccount deficit to be as largeasthe foreign borrowingconstraintwill allow,and entrepreneurs o be full of investmentideas. In such an economy,an exogenousincrease in investiblefunds,such as foreignaid and remittances, will spur primarilyinvestment and other productiveeconomicactivitiesrather hanconsumptionor invest-ment in real estate. This descriptioncomespretty close to capturingthe situation ofcountriessuch as BrazilorTurkey,or exam-ple. By contrast, n an economywhere eco-nomic activity s constrainedby low privatereturns, nterest rateswill be low,bankswillbe flush in liquidity,enderswill be chasingafterborrowers,he currentaccountwill benear balance or in surplus,and entrepre-neurs will be more interested in puttingtheir money in Miami or Geneva than ininvestingit at home. An increasein foreign

aid or remittances will finance consump-tion,housing,orcapital light.These in turnare the circumstances that characterizecountriessuch as El Salvador ndEthiopia.When we identifylow privatereturns asthe culprit, we will next want to knowwhetherthe source is low social returnsorlow privateappropriabilityf those returns.Low socialreturns an be due topoorhumancapital, ousy infrastructure, ad geography,orothersimilar easons.Onceagain,we needto be on the lookout ordiagnostic ignals. fhumancapital eitherbecauseof low levels ofeducation or the disease environment) s aserious constraint, we would expect thereturns o educationor the skillpremiumtobe comparatively igh.If infrastructures theproblem,we would observe the bottlenecksin transport r energy,private irmssteppingin to supply he needed services,and so on.Appropriabilityproblems-i.e., a largegapbetweenprivateandsocial returns-canin turn arise under two sets of circum-stances. One possibilityhas to do with the


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984 Journalof EconomicLiterature,Vol.XLIV(December2006)policy/institutional nvironment: axes maybe too high,propertyrightsmaybe protect-ed poorly, high inflation may generatemacro risk, labor-capital conflicts maydepress productionincentives, and so on.Alternatively,he faultmaylie with marketfailures such as technological spillovers,coordination ailures,and problemsof eco-nomic "self-discovery"(i.e., uncertaintyabout the underlyingcost structure of theeconomy;see Hausmannand Rodrik2003).As usual,we look for the tell-tale signs ofeach of these. Sometimes, the diagnosticanalysisproceedsdown a particular athnotbecause of direct evidence but because theotherpathshavebeen ruledout.12It is possible to carry out this kind ofanalysisat a much finer level of disaggrega-tion, and indeed any real-worldapplicationhas to be considerablymore detailed thanthe one I havesketchedhere. ButI hopethissummaryconveys the value of an explicitlydiagnosticframework.Even a rudimentaryapplication of these principles can some-times revealimportantgapsor shortcomingsin traditional eformpackages.Forexample,when the cost of finance is an importantbindingconstraint asseemslikely n Brazil),institutionalimprovements imed atimprov-ing the "business limate" i.e., reducingredtape, loweringtaxes, and so on) will be notonly ineffective(sincethe problemdoes notlie with investmentdemand),but it can alsobackfire (since an increase in investmentdemandwill put furtherupwardspressureon interestrates).6.2 Step2: Policy Design

Once the key problem(s) are identified,we need to thinkaboutthe appropriate oli-cy responses.The keyin this stepis to focuson the market ailuresanddistortions ssoci-ated with the constraintidentified in the12So in the case of El Salvadorwe concluded that lack

of self-discoverywas an importantand binding constraintin part because there was little evidence in favor of theother traditional explanations (Hausmann and Rodrik2005).

previousstep.Theprincipleof policytarget-ing offersa simplemessage: argetthe poli-cy response as closely as possible on thesource of the distortion.Hence if creditcon-straintsare the mainconstraint,orexample,andthe problem s the resultof lack of com-petitionand largebankspreads,the appro-priate response s to reduceimpediments ocompetition n the banking ector.Simple as it may be, this first-bestlogicoften does not work, and indeed can beeven counterproductive.The reason is thatwe are necessarilyoperating in a second-best environment,due to other distortionsor administrativeand political constraints.In designing policy,we have to be on thelookout for unforeseen complications andunexpectedconsequences.Let me returntoan examplefromChina.Formalownershiprights n China'stownshipandvillageenter-prises (TVEs) were vested not in privatehands or in the centralgovernment,but inlocal governments (townshipsor villages).From the lens of first-best reform, theseenterprises are problematic since, if ourobjectiveis to spurprivateinvestmentandentrepreneurship, t would have been farpreferable to institute private propertyrights (as Russiaand other East Europeantransitioneconomies did). But the first-bestlogic is not helpful here because a privateproperty ystemrelieson an effectivejudici-ary for the enforcement of property rightsand contracts. n the absence of sucha legalsystem,formalpropertyrightsare not worthmuch, as minority shareholdersin Russiasoon discoveredto their chagrin.Until aneffective judiciary s created, it may makemore sense to make virtue out of necessityand force entrepreneursinto partnershipwith their most likely expropriators, helocal state authorities.That is exactlywhatthe TVEs did. Local governments werekeen to ensure the prosperity of theseenterprisesas their equity stake generatedrevenuesdirectlyfor them. In the environ-ment characteristic of China, propertyrightswere effectively more secure under


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Rodrik:Goodbye WashingtonConsensus,Hello WashingtonConfusion? 985direct local government ownership thanthey wouldlikelyhavebeen under a privateproperty-rightsegal regime.Such examplescan be easily multiplied(Rodrik2005a).As an additionalllustration,consider the case of achievingintegrationwith the world economy. Policymakers ncountriessuchas SouthKoreaand Taiwannthe early1960s and Chinain the late 1970shad decided thatenhancingtheircountries'participation n world markets was a keyobjective.For a westerneconomist, he mostdirect route would have been to reduce oreliminate barriersto imports and foreigninvestment. Instead, these countriesachieved the same ends (i.e., reduce theantitrade bias of their economic policies)throughunconventionalmeans. SouthKoreaand Taiwanemployed export targets andexport subsidies for their firms. Chinacarved out special economic zones whereforeigninvestorshad access to a free-traderegime. Policymakerschose these uncon-ventionalsolutionspresumablybecausetheycreatedfeweradjustment osts andput lessstresson establishedsocialbargains.6.3 Step3: InstitutionalizingReform

The natureof the bindingconstraintwillnecessarilychangeover time. For example,schooling may not be a bindingconstraintinitially, but as investment and entrepre-neurship pick up, it will likelybecome oneunless the quality and quantityof schoolsincrease over time. In Hausmann,Rodrik,and Velasco(2005), we illustrate this issueusing the example of the DominicanRepublic. This country was able to spurgrowth with a number of sector-specificreforms that stimulated investment intourismandmaquilas.But it neglectedmak-ing the institutional nvestmentsrequired olend resilience and robustnessto economicgrowth--especiallyin the area of financialmarket regulationand supervision.WhenSeptember 11 led to the dryingof touristinflows, he countrypaidabig price.A Ponzi

scheme that had developedin the bankingsector collapsed,and cleaningup the messcost the government20 percentagepointsofGDP and led the economyinto a downwardspiral.It turned out that the economy hadoutgrown its weak institutionalunderpin-nings. The same can be said of Indonesia,where the financialcrisis of 1997-98 led tototal economic andpoliticalcollapse.It mayyet turn out to be case alsoof Chinaunlessthis countrymanages o strengthenthe ruleof law and enhance democraticparticipation.What is needed to sustain growth?Twotypesof institutional eformseem to becomecriticalovertime. First,there is the need tomaintain productive dynamism. Naturalresourcediscoveries,garment exportsfrommaquilas, or a free-trade agreement mayspur growth for a limited of time. Policyneeds to ensure that this momentum ismaintainedwith ongoingdiversificationntonew areas of tradables.Otherwise,growthsimply fizzles out. What stands out in theperformanceof East Asiancountries s theircontinued focus on the needs of the realeconomyand the ongoingencouragement ftechnologyadoptionanddiversification.Thesecond area hatneedsattentionsthestrengthening f domestic nstitutions f con-flict management.The most frequentcausefor the collapsein growth s the inability odeal with the consequences of externalshocks-i.e., termsoftradedeclinesorrever-sals in capital lows.Endowing he economywith resilienceagainstsuch shocksrequiresstrengtheninghe rule of law,solidifying orputting in place) democratic institutions,establishingparticipatorymechanisms,anderectingsocialsafetynets. When such insti-tutions arein place,the macroeconomic ndother adjustments needed to deal withadverse shocks can be undertakenrelativelysmoothly.When they are not, the result isdistributiveconflict and economic collapse(Rodrik 1999). The contrastingexperiencesof SouthKoreaand Indonesia n the imme-diate aftermath f the Asian inancial risis n1997-98 arequiteinstructiven thisregard.


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986 Journalof EconomicLiterature,Vol. XLIV(December2006)Institutional reforms in these areas aredifficult to implement and they take time.Economicsciencetypicallyprovidesverylit-tle guidanceon how to proceed(AvinashK.

Dixit2004). Butthe pointis that these diffi-culties do not need to stand n thewayof for-mulatingess ambitious,moreselective,andmorecarefully argetedpolicy nitiatives hatcan have very powerfuleffects on ignitingeconomicgrowthin the short run. What isrequiredto sustain growth should not beconfusedwith what is required o initiate it.7. ConcludingRemarks

It is nowtime fora confession.As the pre-cedingdiscussionoughtto have madeclear,I find Learning rom Reforma useful andimportant document in no small partbecause its central hemesparallel hose thatI have been advocating or some time alongwith a number of my colleagues at theKennedy School (see in particularRodrik2005a; Hausmann, Rodrik, and Velasco2005; and Hausmann,Pritchett,and Rodrik2005). It is gratifyingo see one's deasbeingtakenseriously,particularlyy an institutionthat has frequentlyserved as a target forone's criticisms.The reportpaysme compli-mentsin otherwaystoo:one of its twoopen-ing quotesis taken frommywork(the otheris from Al Harberger).And I return thecompliment by acting as one of theendorserson its backcover.13Had the editorof thisJournalnot insisted,I wouldnot havefound it properto writethis reviewessay.But I wouldlike to thinkthat the laudato-rynote I have struckabovehasto do notjustwith an ego that is being stroked.Comingfrom the institution hat is one of the chiefarchitectsof the reformsof the last twentyyears,Learningrom Reform s a genuinelyinterestingdocument:it representsa meaculpaas well as awayforward.tpushesus to

13To add to the incestousness of the relationship,LantPritchett, my coauthor on Hausmann, Pritchett, andRodrik(2005), served as the principalauthor of two of thechaptersof Learning rom Reform.

think harderanddeeperabout the econom-ics of reform hananything lse out there. Itwarnsus to be skepticalof top-down,com-prehensive,universalsolutions-no matterhow well intentionedthey may be. And itreminds us that the requisite economicanalysis-hard as it is, in the absenceof spe-cificblueprints-has to be donecasebycase.These should be music to anyeconomist'sears.Afterall,whatdistinguishesprofession-aleconomists romideologues s thatthe for-mer are trained to make contingentstatements:policyA is to be recommendedonly if conditions x, y, and z obtain.14Sensibleadvice consistsof a well-articulatedmappingfrom observed conditionsonto itspolicyimplications.This simple but funda-mentalprincipleseems to have gotten lostin muchof the thinkingon economicreformin the developingworld, which has oftentaken an a prioriand mechanicalform. Its

14 As a trite,but still useful illustration,consider tradeliberalization,which is one of the most common policyreforms recommended to developing countries (typicallyunconditionally) (Rodrik 2005a). Economic theory saysthat trade liberalization s guaranteedto enhance welfareonly under a long list of conditions: The liberalizationmust be complete or else the reduction in import restric-tions must take into account the potentially quite compli-cated structure of substitutabilityand complementarityacross restricted commodities. There must be no micro-economic market imperfections other than the traderestrictionsin question, or if there are some, the second-best interactions that are entailed must not be adverse.The home economy must be "small" n world marketsorelse the liberalizationmust not put the economy on thewrongside of the "optimum ariff."The economy must bein reasonably ull employment or,if not, the monetaryandfiscal authorities must have effective tools of demandmanagement at their disposal. The income redistributiveeffects of the liberalizationshould not be judged undesir-able by society at largeor, if they are, there must be com-pensatory tax-transferschemes with low enough excessburden.There must be no adverseeffects on the fiscal bal-ance or,if there are, there must be alternativeandexpedi-ent ways of making up for the lost fiscal revenues. Theliberalization must be politically sustainable and hencecredible so that economic agents do not fear or anticipatea reversal.And an even longer list of requirementswouldhave to be present for trade liberalization o generateeco-nomic growth, i.e., go beyond static Harbergertriangles.While the theory of the second-best should not paralyzeus, neither should we hand-wave it away as easily as weseem to do in our role as policy advisors.


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Rodrik:Goodbye WashingtonConsensus,Hello WashingtonConfusion? 987rediscovery s thereforegood news not justfor poor nations, but for the economicsprofessionas well.

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Kuczynski,Pedro-Pablo,and John Williamson,eds.2003. After the WashingtonConsensus:RestartingGrowthand Reform n Latin America.Washington,D.C.: Institute or InternationalEconomics.Naim, Moises. 1999. "Fadsand Fashion n EconomicReforms: Washington Consensus or WashingtonConfusion?"PaperPreparedorthe IMFConferenceon Second GenerationReforms,Washington,D.C.Nellis, John.2003. "Privatizationn Africa:What HasHappened? What Is To Be Done?" Center forGlobalDevelopmentWorkingPaper25.Nelson, RichardR. 1956."ATheoryof the Low-LevelEquilibriumTrap n UnderdevelopedEconomies."AmericanEconomicReview,46(5):894-908.Rodriguez,Francisco.2005. "CleaningUp the KitchenSink: On the Consequences ofthe LinearityAssumptionfor Cross-CountryGrowthEmpirics."Unpublished.Rodrik,Dani. 1999. "WhereDid All the GrowthGo?External Shocks, Social Conflict, and GrowthCollapses." Journal of Economic Growth, 4(4):385-412.Rodrik,Dani.2005a."GrowthStrategies."nHandbookof EconomicGrowth,Vol.1A, ed. P. Aghionand S.Durlauf.Amsterdam:North-Holland, 67-1014.Rodrik,Dani. 2005b. "WhyWe LearnNothing fromRegressing Economic Growth on Policies."Unpublished.Rodrik, Dani, Arvind Subramanian,and FrancescoTrebbi. 2004. "InstitutionsRule: The PrimacyofInstitutions over Geography and Integration inEconomic Development." Journal of EconomicGrowth,9(2):131-65.

Rosenstein-Rodan, Paul N. 1943. "Problems ofIndustrialization of Eastern and South-EasternEurope."EconomicJournal,53:202-11.Sachs,JeffreyD., JohnW. McArthur,Guido Schmidt-Traub,MargaretKruk,ChandrikaBahadur,MichaelFaye, and GordonMcCord.2004. "EndingAfrica'sPoverty Trap." Brookings Papers on EconomicActivity,(1): 117-216.Singh, Anoop, AgnesBelaisch,CharlesCollyns,PaulaDe Masi,RevaKrieger,GuyMeredith,and RobertRennhack.2005. "Stabilization ndReform n LatinAmerica: A Macroeconomic Perspective of theExperience since the 1990s." IMF OccasionalPaper238U.N.MillenniumProject. 005.InvestingnDevelopment:A Practical Plan to Acheive the MillenniumDevelopment oals.NewYork:UnitedNations.Williamson, John, ed. 1990. Latin AmericanAdjustment: How Much Has It Happened?Washington, D.C.: Institute for InternationalEconomics.Williamson, ohn.2000. "WhatShould he WorldBankThink about the WashingtonConsensus?"WorldBankResearchObserver,15(2):251-64.World Bank. 2005. EconomicGrowth in the 1990s:Learning rom a Decade of Reform.Washington,D:C.:WorldBank.

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