You are on page 1of 13

This article was downloaded by:[Younas, Mohammad]

On: 8 January 2008


Access Details: Sample Issue Voucher: Third World Quarterly [subscription number 789341716]
Publisher: Routledge
Informa Ltd Registered in England and Wales Registered Number: 1072954
Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

Third World Quarterly


Publication details, including instructions for authors and subscription information:
http://www.informaworld.com/smpp/title~content=t713448481
In search of the Post-Washington (dis)consensus: the
'missing' content of PRSPS
Andrew Sumner a
a
Faculty of Arts and Human Sciences, London South Bank University, London, UK

Online Publication Date: 01 January 2006


To cite this Article: Sumner, Andrew (2006) 'In search of the Post-Washington
(dis)consensus: the 'missing' content of PRSPS', Third World Quarterly, 27:8, 1401 -
1412
To link to this article: DOI: 10.1080/01436590601027263
URL: http://dx.doi.org/10.1080/01436590601027263

PLEASE SCROLL DOWN FOR ARTICLE

Full terms and conditions of use: http://www.informaworld.com/terms-and-conditions-of-access.pdf


This article maybe used for research, teaching and private study purposes. Any substantial or systematic reproduction,
re-distribution, re-selling, loan or sub-licensing, systematic supply or distribution in any form to anyone is expressly
forbidden.
The publisher does not give any warranty express or implied or make any representation that the contents will be
complete or accurate or up to date. The accuracy of any instructions, formulae and drug doses should be
independently verified with primary sources. The publisher shall not be liable for any loss, actions, claims, proceedings,
demand or costs or damages whatsoever or howsoever caused arising directly or indirectly in connection with or
arising out of the use of this material.
Third World Quarterly, Vol. 27, No. 8, pp 1401 – 1412, 2006
Downloaded By: [Younas, Mohammad] At: 11:36 8 January 2008

In Search of the Post-Washington


(Dis)consensus: the ‘missing’ content
of PRSPS
ANDREW SUMNER

ABSTRACT The policy-making context in the ‘South’ would seem to have


changed in recent years, potentially opening space for alternative voices. The
international financial institutions no longer overtly insist on policy content. The
‘locally owned’ Poverty Reduction Strategy Paper (PRSP) has become the main
vehicle for policy. Many have argued PRSPs represent a ‘remorphing’ of
neoliberalism or the Washington Consensus as practised by the international
financial institutions for much of the 1980s and 1990s. However, although much
research on PRSPs has focused on the process of PRSP production and the extent
of participation, the outcome of the PRSP process—the actual PRSP—and its
content has received relatively limited attention. This article is an exploratory
piece. Taking the content of 50 PRSPs the following question is posed: has the
PRSP process opened space for something new, Stiglitz’s post-Washington
Consensus, or for the reproduction of the former Washington Consensus?

The policy-making context in the ‘South’ would seem to have changed in


recent years, potentially opening space for alternative voices. First, the IMF
and World Bank no longer formally insist on the content of policy. The
‘locally owned’ Poverty Reduction Strategy Paper (PRSP) has become the
main policy vehicle. The June 2005 G8 communiqué declared: ‘developing
countries . . . need to decide, plan and sequence their economic policies to fit
their own development strategies . . . explicit endorsement of the PRSP by the
Executive Boards of the two institutions [the IMF and the World Bank] is no
longer required for PRGF [Poverty Reduction Growth Facility] lending’.1
Whether unorthodox policies in PRSPs would make it to board level or be
‘filtered’ earlier on in the process is, however, an open question.
Second, the policy discourse ‘space’ has potentially opened up somewhat.
In May 2004 James Wolfensohn, then president of the World Bank,
observed: ‘the Washington Consensus has been dead for years. It has been
replaced by all sorts of other consensuses’.2 Many dispute this demise,
arguing that the PRSPs represent ‘a remorphing of neo-liberal approaches’

Andrew Sumner is in the Faculty of Arts and Human Sciences, London South Bank University, 103 Borough
Road, London SE1 0AA, UK. Email: sumnerap@lsbu.ac.uk.

ISSN 0143-6597 print/ISSN 1360-2241 online/06/081401–12 Ó 2006 Third World Quarterly


DOI: 10.1080/01436590601027263 1401
ANDREW SUMNER
Downloaded By: [Younas, Mohammad] At: 11:36 8 January 2008

and ‘no fundamental departure from the kind of policy advice provided
under earlier structural adjustment programmes’.3 Others see this as a period
of self-reflection and reconsolidation: ‘after half a century of development
effort, there is now widespread interest in assessing the development record—
what has gone right and what has gone wrong’ and ‘the last few years have
been marked by a critical re-evaluation and consolidation of previous
concepts and techniques as opposed to the formulation of brand new ideas
per se’.4
So, who is right? Do PRSPs represent a major shift to any number of ‘post-
Washington Consensus(es)’? Much research on PRSPs has focused on the
process itself and extent of participation or local ‘ownership’.5 In contrast,
the outcome of that process—the content of PRSPs—has received relatively
limited attention.6 This is especially so at cross-country level. This article is
an exploratory piece. Taking the content of 50 PRSPs the following questions
are posed: Has the PRSP process opened space for something new, Stiglitz’s
post-Washington Consensus, or for the reproduction of the former
Washington Consensus?

A framework for policy ‘discourse’ analysis


This paper draws on Foucault, Kuhn and Sutcliffe to analyse development
policy discourses. Foucault posited two types of analyses to examine power in
discourse (defined as the body of ideas, concepts and theory): ‘archaeology’
and ‘genealogy’. Archaeology is the analysis of the ‘the archive’, that group of
discourses that determine what actually counted as knowledge in a given
period.7 Genealogy refers to the imposition of power on the ‘body’ through
discipline, subjection and normalisation. Observation by someone above the
individual in the hierarchy leads people to act in accordance with the discourse
norm. In short, normalise or be punished. This article discusses the
‘archaeology’ and ‘genealogy’ of development policy discourses below.
Also drawn on is the work of Kuhn (and its interpretation by Masterman),
who was concerned with how discourses evolve and, with resonance to
Foucault, what is ‘thinkable’ or ‘unthinkable’ at any moment. Knowledge is
not generated simply by accumulation; it is a product of the intellectual time
and environment. Kuhn developed the well known notion of a ‘paradigm’ in
The Structure of Scientific Revolutions. Kuhn’s original point of reference for
a ‘paradigm’ was ‘the entire constellation of beliefs, values and techniques,
and so on shared by the members of a given community’.8 This definition was
seen as far too vague by many, including Masterman, who noted that Kuhn’s
definition of a ‘paradigm’ had been defined/interpreted in 21 different ways.9
Masterman argued that these could be reduced to three that are ‘core’
elements of a ‘paradigm’: the ‘(world) vision’ (the meta-physical view and its
ontological foundations); the exemplar (the model or ‘vehicle’ which is to be
pursued) and the ‘body of professionals’. Kuhn himself eventually dropped
the term ‘paradigm’ in favour of these more restricted terms.10 This article
takes ‘(world) vision’ and ‘exemplar’ as the units of analysis and merges them
with Sutcliffe’s metaphor of ‘development’ as ‘a journey, with a starting point
1402
POST-WASHINGTON (DIS)CONSENSUS
Downloaded By: [Younas, Mohammad] At: 11:36 8 January 2008

[ie a vision of the meta-physical], a form of travel [an exemplar—ie policy]


and a final destination’.11 The dominant ‘vision’ and ‘exemplar’ in any given
time are those that are dominant in practice.
Kuhn argued there were three phases to a ‘paradigm shift’. The first was
‘the pre-scientific phase’. At this time there is no consensus but a number of
incompatible competing theories. The second phase is ‘normal science’. At
this time one of the competing frameworks becomes a dominant consensus
on methods, terminology and ways of seeing the world. ‘Normal science’ then
consists of unpacking the ‘promise of success’ of new ideas. The third phase is
‘scientific revolution’, when the key anomalies build up against a theory,
leading to its rejection. Such a shift changes the questions of enquiry and the
‘rules of the game’. Kuhn argued that ‘paradigms gain their status because
they are more successful than their competitors in solving a few problems
that the group of practitioners has come to recognise as acute’. He further
argued that change occurs when the weight of ‘key anomalies’ builds up to a
‘crisis’ and a ‘revolution’ occurs, switching to a new ‘world view’.12 The
‘weight of anomalies’ relates to internal inconsistencies and/or the failure to
answer the ‘questions’ seen as important to the ‘group of practitioners’.
Additionally changes in methods may also trigger a shift because methods are
part of the prevailing paradigm.

The Washington Consensus vs the New York Consensus


The ‘Washington Consensus’, was ‘the conventional wisdom . . . among the
economically influential parts of Washington, meaning the US government and
the international financial institutions’.13 Indeed, the Washington Consensus
became a ‘meta-narrative’ in itself, ‘the term ‘‘Washington-consensus’’ soon
acquired a life of its own becoming a brand name known worldwide and used
independently of its original intent and even of its content’.14
Williamson’s original Washington Consensus was based on what Beeson
and Islam have called ‘the ten commandments’—a list of 10 policies (see
Table 1).15 Within these some might be surprised to see progressive taxation,
welfare systems (albeit non-deficit financed) and institutional reform.
However, the Consensus, as practised by the international financial
institutions (IFIs) became ‘state-bashing’—a wholesale attempt to dismantle
the developmental state.16 The new ‘world vision’, or point of departure for
the Consensus as practised, was economic chaos in postcolonial societies
caused by state intervention (inflation, financial ‘repression’, retarded private
sector, etc). The ‘vehicle’—policy—for the IFI Washington Consensus was
privatisation, liberalisation and deregulation. The point of arrival was
economic growth and macroeconomic stability as ends in themselves (low
inflation, balance of payments and fiscal equilibrium, etc). Key ‘anomalies’
included assumptions that markets are perfectly competitive; development
defined as economic development; methodological individualism; utility
maximisation; equilibrium as an organic concept and efficiency as a goal.
Since the reported death of the Washington Consensus, the policy discourse
has been driven by the concept of a ‘post-Washington Consensus’, which is
1403
ANDREW SUMNER
Downloaded By: [Younas, Mohammad] At: 11:36 8 January 2008

TABLE 1. The Washington Consensus paradigm


Point of departure or
‘world vision’ Form of travel or ‘exemplar’ Point of arrival

The ‘Washington Economic chaos in WC as practiced by IMFand World Economic growth,


Consensus’ (WC) postcolonial Bank: macroeconomic
(cf Williamson) societies caused by stability as ends
state intervention Anti-statist; macroeconomic
stability; opening economies;
privatisation and deregulation.
Williamson’s WC:

Fiscal discipline; prioritising public


expenditure; tax reform;
financial liberalisation; market
determined exchange rates; trade
liberalisation; openness to
foreign direct investment;
privatisation; deregulation and
property rights

primarily associated with Joseph Stiglitz’s work.17 The post-Washington


Consensus is, however, primarily a critique of the Washington Consensus as
practised by the IFIs rather than a new paradigm. Stiglitz has argued that the
Washington Consensus was ‘incomplete’ and ‘misleading’ and that there
was a lack of understanding of economic structures (too unrealistic
ontological assumptions), a narrow set of objectives (too economic) and a
narrow set of policy instruments (too limited). However, many have argued
that the difference between the post-Washington Consensus and the Consen-
sus itslef is relatively little. Perraton suggested the difference was ‘rather less
than the rhetoric suggests’ and noted Stiglitz only repudiates fiscal discipline,
and liberalisation of the capital account and rate of interest.18 Elsewhere
there is only caution or sequencing rather than opposition to trade and
foreign direct investment (FDI) liberalisation and privatisation. Rodrik went
as far as to label the post-Washington Consensus ‘unfeasible, inappropriate
and irrelevant’ and dubbed it the ‘augmented-WC’, arguing that it describes
the desirable features of development but not how to get them, and added
10 policies to Williamson’s original list to form the ‘augmented WC’.19 Beeson
and Islam called the post-Washington Consensus ‘the reinvention of
global neo-liberalism under the guise of an ‘‘augmented Washington
Consensus’’’.20
In terms of ‘world vision’, ‘exemplar’, etc (see Table 2) the point of
departure for the post-Washington Consensus is, in places, quite different
from the IFI Washington Consensus: that low-income societies are charac-
terised by poor institutions (rather than state-induced economic chaos), weak
governance and imperfect markets. The ‘vehicle’ is high-quality institutions
(but how to get them?) and regulatory structures underpinning markets,
cautious international integration, and social safety nets. The point of arrival
1404
POST-WASHINGTON (DIS)CONSENSUS
Downloaded By: [Younas, Mohammad] At: 11:36 8 January 2008

TABLE 2. Claims to a contemporary development policy paradigm


Point of departure or Form of travel or
‘world vision’ ‘exemplar’ Point of arrival

The post-Washington Low income societies Quality institutions; Economic growth and
Consensus characterised by poor regulatory structures; multidimensional
(cf Stiglitz) institutions and weak macroeconomic poverty reduction,
governance stability; strong sustainability, equity
financial system; and democracy
privatisation with
competition; human
capital formation;
property rights;
cautious integration;
social safety nets;
technology policy
The New York Low equilibrium Growth; trade openness; Attaining the MDGs
Consensus or poverty trap for low aid; prioritising public
Millennium income countries; expenditure; good
‘Meta-Narrative’ inequality and ‘governance’.
(cf Maxwell; UNMP) poverty ‘pockets’ in
middle income
developing countries.
Both the result of
‘governance’ failures
The Latent Southern Agrarian, low income Strategic integration; fiscal Structural change and
Consensus (cf Gore) societies discipline; full capital social transformation
and human
employment; human
capital formation; state
facilitation of private
sector-led development;
agrarian reform;
regional co-operation.

was broader than the IFI Washington Consensus. It was multi-dimensional


poverty reduction, sustainability and democracy.
Maxwell takes the post-Washington Consensus as expanding the
Washington Consensus but argues that the former is still ‘incomplete’ and
tentatively proposes a new ‘meta-narrative’:

the WC has been replaced by a new and improved orthodoxy, called here the
‘meta-narrative’. It emphasises the Millennium Development Goals (MDGs) as
an over-arching framework, and lays out the link between the MDGs, nationally
owned poverty reduction strategies, macro-economic policy (including trade),
effective public expenditure management, and harmonised aid in support of
good governance and good policies.21

In the Maxwell (Millennium) ‘meta-narrative’ (perhaps a ‘New York


Consensus’ rather than a Washington Consensus, given the signing of the
1405
ANDREW SUMNER
Downloaded By: [Younas, Mohammad] At: 11:36 8 January 2008

Millennium Declaration at the UN in New York), the point of departure is—


according to United Nations Millennium Project (UNMP)—for low income
countries, a low equilibrium poverty trap (causes: low savings rate, low tax
revenue, low FDI, conflict, brain drain, population growth, environmental
degradation and low innovation. But for middle income developing
countries, inequality and poverty ‘pockets’ are the point of departure. Both
relate to ‘governance’ failures (causes: limited rule of law, limited ‘soundness’
of economic policies, ‘mis-appropriateness’ of public expenditure and
management). One might add that the ‘vehicle’ is MDG-led PRSPs based on:
growth; trade openness; aid; prioritising public expenditure and good
‘governance’.
Gore’s ‘Latent Southern Consensus’ is another recent attempt at ‘a big
idea’. Gore identifies five groups of policies:

1. the strategic integration of the national and international economy


rather than rapid liberalisation (ie gradual import liberalisation,
promotion of exports, promotion of FDI with local linkages);
2. growth and structural change by ‘productive development policy’
(reduction of inflation, fiscal discipline but also full employment of
capital, state facilitation of this through, for example, human resource
development);
3. a developmental state linking government and business co-operation—
private sector-led but government sets the framework (ie overcoming
technology imperfections);
4. the ‘managing’ of distribution and growth to ensure productive
employment (ie agrarian reform);
5. regional integration and co-operation.

In short, a synthesis of East Asian developmentalism (state-facilitated private


sector-led development) and Latin American neo-structuralism (which
emphasises the importance of centre – periphery relations in delivering the
conditions of national development).22
However, in spite of the above, the originators of the last two claims to a
‘consensus’, both Williamson and Stiglitz, have both recently claimed that
there is no contemporary consensus.23 Are they right?

The content of PRSPs and the (dis)consensus?


One way of thinking of the Development Studies (DS) community is
Kanbur’s two ‘groups of practitioners’ in the development policy discourse.24
These groups were intended as tendencies, not absolutes. To summarise:
there is a ‘finance ministry’ group and a ‘civil society’ group. The ‘finance
ministry’ group consists of those working in finance ministries as well as
economic analysts, Anglo-Saxon-trained academics, economic policy man-
agers, operational managers of the IMF and World Bank and the financial
press. In contrast, the ‘civil society’ group consists of those working in NGOs,
the UN agencies, aid ministries in the North, social sector ministries in the
1406
POST-WASHINGTON (DIS)CONSENSUS
Downloaded By: [Younas, Mohammad] At: 11:36 8 January 2008

South and non-economist researchers. Kanbur concluded that ‘there are


swathes of agreement in areas where there would not have been consensus
two decades ago . . . but, clearly, there are deep divisions on economic policy,
distribution and poverty’.25 ‘Finance Ministry’ ‘types’ believe in ‘rapid
adjustment to fiscal imbalances, rapid adjustment to lower inflation and
external deficits . . . liberalisation, deregulation . . . deep and rapid privatisa-
tion . . . and major opening of an economy to trade and foreign direct
investment’. In short, the Washington Consensus as practised by the IFIs. In
contrast, ‘Civil Society’ ‘types’ on ‘each of these issues . . . tend to lean the
other way’.
Many, notably from Kanbur’s ‘civil society’ group, have argued that the
IFI Washington Consensus is alive and well in contemporary policy and in the
26
PRSPs. Although the IMF and World Bank no longer have to ‘sign off’
PRSPs, the IFIs still have overt/covert influence over PRSPs. IFI agendas may
be internalised as the country’s Ministry of Finance takes over from the IMF
as the dominant player in the process. As the ‘finance ministry’, Economist
magazine noted: ‘the shift in fashions [to PRSPs] should not be exaggerated.
Where before donors told governments what to do now governments largely
tell donors what they want to hear.’27
The content of PRSPs is the issue. Figure 1 (and Table 3) is generated by
considering what policies are not in the PRSPs. Considering what is not in the
PRSPs is intended to limit bias in interpretation of policies. Fifty countries are
covered. Data are broken down by all PRSPs; by Highly Indebted Poor
Countries (HIPCs); non-HIPCs and African HIPCs. The data refer to either
‘policy is not mentioned in PRSP’ or ‘unorthodox policy or review of policy is
in the PRSP’.28
Patterns emerge, some surprising. Overall, although strict monetary and
fiscal policy and privatisation are rarely absent, trade liberalisation is not

FIGURE 1. The missing content of PRSPS.

1407
ANDREW SUMNER
Downloaded By: [Younas, Mohammad] At: 11:36 8 January 2008

TABLE 3. The missing content of 50 PRSPs

Policy not mentioned in PRSP or All PRSPs (%) HIPCs(%) Non-HIPCs (%) African HIPCs (%)
non-orthodox policy in PRSP N ¼ 50 N ¼ 28 N ¼ 22 N ¼ 22

Strict monetary policy 14 14 14 18


Strict fiscal policy 4 4 5 5
Privatisation 10 11 9 5
Trade liberalisation 28 39 14 50
Agriculture liberalisation 48 54 41 50
FDI deregulation 36 50 18 58
Capital account liberalisation 40 68 50 63

included in over a quarter of PRSPs and a third do not include FDI


deregulation or capital account liberalisation. Furthermore, this trend is
stronger in HIPCs and notably African HIPCs (not surprising as most HIPCs
are African). In HIPCs, although once again strict monetary and fiscal policy
and privatisation are rarely missing, trade liberalisation is absent in well over
a third; FDI deregulation is missing in half and capital account liberalisation
in over two-thirds. What to make of this? Twenty years ago one might expect
most if not all these policies to be components of any structural adjustment
programme and yet now some are missing.
There are (at least) three possible reasons for the ‘missing’ policies. First,
the PRSPs have omitted policies that actually exist. This should not be
discounted completely, even though one of the guiding principles of PRSPs is
to be ‘comprehensive’. Second, there has been a real change in policy,
perhaps based on the recent emergence of a number of sceptical cross-
country studies on liberalisation.29 Third, those countries omitting policies
are already internationally liberalised to such an extent that further
liberalisation possibilities are limited. The first and second cannot be dealt
with without a major study of all policies in the 50 countries, which is beyond
the scope of this paper. Suffice to say here that in only 11 of the 450
observations were ‘unorthodox’ policies identified.30 Examples of such
unorthodox policies included the following. In Gambia, ‘monetary policy to
maintain inflation at 5%’ (when it was then 2%); in Tanzania, ‘maintaining a
fiscal deficit at a modest level’ and in Ghana, ‘quality standards on imports to
be enforced’; in Laos a ‘need for protection of certain sectors’ was recognised;
and in Ghana a review of trade liberalization policy is included in the PRSP.
The third, and arguably the most likely, explanation can be tentatively
explored in the 20 African HIPCs (Burkina Faso and Uganda appear twice as
both have two PRSPs). It should be noted at the outset that data presented
here are highly contentious proxies for measuring international liberalisation.
For this reason they should be seen as nothing more than crude, tentative,
overall approximates rather than anything precise to form concrete
conclusions. On privatisation (see Table 4) only one of the sample does not
mention privatisation in the PRSP (Tanzania). With the exception of Gambia,
Uganda and Zambia, all retain major shares of state-owned enterprises
1408
POST-WASHINGTON (DIS)CONSENSUS
Downloaded By: [Younas, Mohammad] At: 11:36 8 January 2008

TABLE 4. Privatisation in African HIPCs

Privatisation in PRSP Share of SOEs not privatised (%) (2001)

Benin Y 62
Burkina Faso Y (PRSP I and II) 68
Cameroon Y 72
Chad Y –
Ethiopia Y 94
Gambia Y 15
Ghana Y 31
Guinea Y 73
Madagascar Y 67
Malawi Y 56
Mali Y 8
Mauritania Y 80
Mozambique Y 61
Niger Y 82
Rwanda Y 97
Senegal Y 77
Sierra Leone Y 69
Tanzania N 47
Uganda Y (PRSP I and II) 21
Zambia Y 10

(SOEs) not privatised as of 2001 when data was collated by Nellis.31 The
preponderance of large state assets might explain the role of privatisation in
PRSPs in the sample, although recent research has suggested that even the
privatisation – growth link in developing countries is weak.32
In the case of the ‘missing components’—trade liberalisation, capital
account liberalisation and FDI liberalisation—proxies can be identified for
the two former (see Table 5) but there is no satisfactory policy proxy, to the
author’s knowledge, for FDI policy. Although UNCTAD does calculate policies
‘more or less favourable’ to FDI in the annual World Investment Report, this is
not a measure of the overall openness of a country to FDI and UNCTAD does
not make the data publicly available at country level. FDI flows/annual
investment or FDI stock/GDP could also be used but neither of these says
anything about the extent of liberalisation of policy. In the case of trade
liberalisation average trade tariff data are available for the countries in the
sample and show that most of the HIPCs do already have low trade tariffs,
though not as low as the World Bank’s ‘Country Policy and Institutional
Assessment’ benchmark of less than 10% average trade tariff, which
constitutes ‘good’ policy.33 That said, India’s average trade tariff of 33% is
more than double many HIPCs’ average tariff rates.
In terms of capital account liberalisation, again, consistent and available
data are problematic, demonstrating the nature of financial transactions in
the host economies. One proxy is an index of restrictions on capital
transactions with foreigners presented in the annual Economic Freedom of the
World report.34 These are on a scale of zero to 10. Zero equals totally
1409
ANDREW SUMNER
Downloaded By: [Younas, Mohammad] At: 11:36 8 January 2008

TABLE 5. Trade and capital account liberalisation in African HIPCs

Average trade Restrictions on


tariff rate, Capital account capital transactions
Trade liberalisation unweighted (%) liberalisation in with foreigners
in PRSP? (2002/3) PRSP? (2005)

Benin Y 14.5 Y 0.0


Burkina Faso Y – PRSP I 14.5 N – PRSP I –
N – PRSP II N – PRSP II
Cameroon Y 18.0 Y 4.6
Chad N 20.0 N 3.2
Ethiopia Y 18.9 N –
Gambia Y 11.8 N –
Ghana N 14.5 Y 6.1
Guinea N 16.9 Y –
Madagascar Y 5.5 Y 5.4
Malawi N 12.6 Y 4.7
Mali Y 14.6 N 3.9
Mauritania N 14.0 N –
Mozambique Y 13.8 N 5.1
Niger N 14.6 Y 7.9
Rwanda Y 10.0 N –
Senegal N 14.6 Y 2.3
Sierra Leone Y 15.9 N 4.2
Tanzania N 14.3 N 8.6
Uganda N – PRSP I 14.9 Y – PRSP I 4.6
Y – PRSP II N – PRSP II
Zambia N 13.4 N 2.8

restrictive and 10 equals no restrictions. There is quite a range in the sample


from 0 in Benin to 8.6 in Tanzania. Most countries are within 3 – 6. This is
hardly conclusive evidence but it would suggest that capital accounts are not
as liberalised as they might be.

An Augustinian conclusion?
From this rather crude, preliminary exploration, one might hypothesise for
further investigation the following, which is consistent with the data
available: the lack of trade liberalisation in the African HIPC PRSPs is at
least partly a function of the extent of existing liberalisation, while the
absence of capital account liberalisation is not. One might speculate that the
shift on capital account liberalisation is more to do with the prevailing
notions, even accepted by the IMF, that capital account liberalisation carries
significant risks. In short, the current policy paradigm seems to be something
closer to Stiglitz and Maxwell than to Gore. However, in the HIPCs FDI
deregulation, trade and capital account liberalisation seem to be out of
favour. Whether we are already in a messy, fragmented paradigm shift is an
open question. It does not look like Kuhn’s ‘pre-scientific’ phase, because
there is some kind of consensus, albeit fragmented. On the other hand, it does
1410
POST-WASHINGTON (DIS)CONSENSUS
Downloaded By: [Younas, Mohammad] At: 11:36 8 January 2008

not look like ‘normal science’, because there is not full consensus. Perhaps
this is Kuhn’s third stage or an ‘in-limbo’, transition period, as Thorbecke
and Meier argue. Perraton perhaps sums it up best when calling it an
‘Augustinian approach’—a change in the speed, not the direction. At least for
the moment.

Notes
1 Group of 8, Final Communiqué, Gleneagles, June 2005, p 2; and International Monetary Fund,
‘Poverty Reduction Strategy Papers (PRSP): A Fact Sheet’, Washington, DC: IMF, 2005, p 1.
2 Wolfensohn, cited in S Maxwell, The Washington Consensus is Dead! Long Live the Meta-Narrative!,
Overseas Development Institute (ODI) Working Paper 243, London, 2005, p 1.
3 D Craig & D Porter, ‘Poverty Reduction Strategy Papers: a new convergence’, World Development, 31,
2003, p 54; F Stewart & M Wang, Do PRSPs Empower Poor People and Disempower the World Bank, Or
is it the Other Way Round?, Queen Elizabeth House Working Paper, Oxford University, 2003, pp 19 –
21.
4 G Meier, Biography of a Subject: An Evolution of Development Economics, Oxford: Oxford University
Press, 2005, p vii; E Thorbecke, ‘The evolution of the development doctrine 1950 – 2005’, paper
presented at the conference on ‘The Future of Development Economics’, United Nations University,
Helsinki, 17 – 18 June 2005, p 34.
5 See, for example, case studies in D Booth (ed), Fighting Poverty in Africa: Are PRSPs Making a
Difference? London: Overseas Development Institute, 2003.
6 R Gottschalk, ‘The macro content of PRSPs: assessing the need for a more flexible macroeconomic
policy framework’, Development Policy Review, 23 (4), 2005, p 420. One notable exception is Stewart
and Wang’s content analysis of 30 PRSPs. Stewart & Wang, Do PRSPs Empower Poor People?
7 There is the judicative—rules, norms, what is included/excluded—which determines the rules of the
discourse, and the veridicative—what is regarded as true and what is dismissed as false—which
legitimises the rules of the discourse.
8 T Kuhn, The Structure of Scientific Revolutions, Chicago, IL: University of Chicago, 1962, p 175.
9 M Masterman, ‘The nature of paradigms,’ in I Lakatos & A Musgrave (eds), Criticism and the Growth
of Knowledge, New York: Cambridge University Press, 1970.
10 T Kuhn, ‘Reflections on my critics’, in Lakatos & Musgrave, Criticism and the Growth of Knowledge;
and Kuhn, ‘Second thoughts on paradigms’, in F Suppe (ed), The Structure of Scientific Theories,
Urbana, IL: University of Illinois Press, 1972.
11 B Sutcliffe, ‘The place of development theories in theories of imperialism and globalisation’, in
R Munck & D O’Hearn (eds), Critical Development Theory: Contributions to a New Paradigm,
London: Zed Books, 1999.
12 Kuhn, The Structure of Scientific Revolutions, pp 23, 103.
13 J Williamson, ‘Democracy and the Washington Consensus’, World Development, 21 (8), 1993, p 1329.
14 M Naim, ‘Washington Consensus or Washington confusion?’, Foreign Policy, Spring, 2000, p 88.
15 M Beeson & I Islam, ‘Neo-liberalism and East Asia: resisting the Washington Consensus’, Journal of
Development Studies, 41 (2), 2005, p 202; J Williamson, ‘What Washington means by policy reform’,
in Williamson (ed), Latin American Adjustment: How Much Has Happened?, Washington, DC:
Institute for International Economics, 1990; and Williamson, The Political Economy of Reform,
Washington, DC: Institute for International Economics, 1994.
16 R Kanbur, ‘The strange case of the Washington Consensus: a brief note on John Williamson’s ‘‘What
should the Bank think about the Washington Consensus?’’’, mimeo, Cornell University, 1999; and
J Stiglitz, ‘The post Washington Consensus, initiative for policy dialogue’, mimeo, Columbia
University, 2004.
17 J Stiglitz, ‘More instruments and broader goals: moving towards the post-Washington Consensus’,
United Nations University, Annual Lecture, Helsinki, 7 January 1998; and Stiglitz, ‘Towards a new
paradigm for development: strategies, policies and processes’, Prebisch Lecture at UNCTAD, Geneva, 19
October 1998.
18 P Perraton, ‘Review article: Joseph Stiglitz’s globalisation and its discontents’, Journal of International
Development, 16 (6), 2005, pp 897 – 906.
19 These were corporate governance; anti-corruption; flexible labour markets; WTO agreements; financial
codes and standards; ‘prudent’ capital account liberalisation; non-intermediate exchange rate regimes;
an independent central bank and inflation targeting; social safety nets; and targeted poverty reduction.

1411
ANDREW SUMNER
Downloaded By: [Younas, Mohammad] At: 11:36 8 January 2008

See D Rodrik, ‘After neoliberalism, what?’, paper presented at the conferences on ‘Alternatives to
Neoliberalism’, Washington, DC, 23 May 2002, p 1.
20 Beeson & Islam, ‘Neo-liberalism and East Asia’, p 1999.
21 Maxwell, The Washington Consensus is Dead!, pp 1 – 2.
22 C Gore, ‘The rise and fall of the Washington Consensus as paradigm for developing countries’, World
Development, 28 (5), 2000, p 791.
23 J Williamson, ‘What should the World Bank think about the Washington Consensus?, World Bank
Research Observer, 15 (2), 2000, pp 251, 262; and Stiglitz, ‘The post Washington Consensus, initiative
for policy dialogue’, Mimeo, Columbia University, 2004, p 1.
24 This was based on the World Development Report 2000/1 consultations, which Kanbur led until his
resignation following US Treasury attempts to censor the final text after what had been a highly
participatory process. See R Kanbur, ‘Economic policy, distribution and poverty: the nature of
disagreements’, World Development, 29 (6), 2001, pp 1083 – 1094.
25 Ibid, p. 1085.
26 See, for example, Oxfam, From ‘Donorship’ to Ownership? Moving Towards PRSP Round Two, Oxford:
Oxfam, 2004; and United Nations Conference on Trade and Development (UNCTAD), The World
Bank’s PRSP Approach: Good Marketing or Good Policy?, Geneva: UNCTAD, 2002.
27 The Economist, 2005, p 12, available at http://www.economist.com. Additionally, in October 2005 the
IMF board approved the establishment of a ‘Policy Support Instrument’. This is a non-lending
programme to provide advice and to signal to donors and markets about a country’s economic policies.
As such it could form a de facto ‘judgement’ under the IMF’s article 4 consultations. As mentioned in
the text, the World Bank’s IDA provides ‘score-cards’ for countries under its ‘Country Policy and
Institutional Assessment’.
28 Given that one of the PRSP declared guiding principles is ‘comprehensiveness’, this would seem to be a
valid form of assessment. Of course, as with all policy analysis, an issue is the nature and extent of
implementation of policy. Since writing a further two countries have full PRSPs rather than interim
PRSPs (Bangladesh and Nigeria) and Nicaragua has a second PRSP. Data presented here have been
processed from T Jones & P Hardstaff, One Size for All: A Study of IMF and WB PRSPs, London: World
Development Movement, 2005. For a list of policies in each PRSP, see T Jones & P Hardstaff, Economic
Policies in Poverty Reduction Strategy Papers, London: World Development Movement, 2005. Jones
and Hardstaff emphasise what is in the PRSPs rather than what is missing, arguing strongly that the
policies of the Washington Consensus are intact.
29 For sceptics’ research on trade liberalisation, see P Agénor, Does Globalization Hurt the Poor?
Washington, DC: World Bank, 2002; T Hertel, M Ivanic, P Preckel & J Cranfield, ‘Trade liberalisation
and the structure of poverty in developing countries’, paper prepared for the conference on
‘Globalisation, Agricultural Development and Rural Livelihoods’, Cornell University, 11 – 12 April
2003; and M Lundberg & L Squire, ‘The simultaneous evolution of growth and inequality’, Economic
Journal, 113 (487), 2003, pp 326 – 344. For sceptics’ research on capital account liberalisation, see C
Arteta, B Eichengreen & C Wyplosz, ‘On the growth effects of capital account liberalisation’, mimeo,
University of California, 2001; M Klein, Capital Account Openness and the Varieties Of Growth
Experience, National Bureau of Economic Research (NBER) Working Paper 9500, 2003; and D Rodrik,
‘Who needs capital-account convertibility?’ in S Fischer (ed), Should the IMF Pursue Capital Account
Convertibility?, Princeton, NJ: University of Princeton, 1998.
30 T Jones & P Hardstaff, One Size for All: A Study of IMF and World Bank PRSPs, London: World
Development Movement, 2005, p. 16.
31 J Nellis, Privatization in Africa: What has Happened? What is to be Done?, Washington, DC: Center for
Global Development, 2003.
32 On privatisation, see P Cook & Y Uchida, Privatisation and Economic Growth in Developing Countries,
Centre on Regulation and Competition (CRC) Working Paper 7, Manchester, 2001.
33 World Bank, Country Policy and Institutional Assessment, Washington, DC: World Bank, 2003. Of
course one issue is the meaningfulness of average tariffs, because of non-tariff barriers as well as tariff
implementation and variance. World Bank trade tariff data for 2004 downloaded at www.worldbank.
org.
34 Economic Freedom of the World, Annual Report, Vancouver: Frasier Institute, Vancouver, 2005.

1412