736428-11-6Q AID: 8522 | 09/02/2020

The term ‘Washington Consensus’ was coined by the Economist JW in 1989. The
Washington Census means the set of economic policies which believes that the
combination of democratic government, open market operations, dominant private sector
is the key to unlock the prosperity and growth of the country. This concept was proposed
in respond to the 1980s foreign debt crisis.

After applying the Washington consensus, the IMF and the bank start providing structural
adjustment loans based on the criteria such as inflation should be controlled by the loan
recipient, reduce government expenses, maintain their budgets, deregulate financial and
labor markets, privatization and liberalization.

The Beijing consensus is the set of economic and political policies which are used by the
Country C for its growth and development. This consensus has helped this country to
grow exceptionally. Therefore, this model is also known as Chinese Economic Model.
This model believes that the importance of state role in the country’s development and
non-interference in the political and economic policies.

Unlike Washington consensus, the Beijing consensus believes the importance of every
country’s own unique economic and political conditions. This model does not claim any
growth model as an ideal model for every country to grow and develop. This model also
enables the recipient to adopt multi-polarity of ideas and suggest every country to find its
own ways, policies and institutions for their growth and development instead of copying
any successful growth model.

The SAPs of IMF and the World Bank was criticized by the Beijing consensus as it
adversely affected the recipients. It also created awareness among the LDCs that the
unrestrained market is not the solution of their economic problems. The Beijing
consensus lays emphasis on the state-guided development rather than free-markets
economic policies.

The post-Washington consensus after the financial crisis, refers to the optimistic view of
democratization of economic policies. After the Washington consensus criticism, the
modification is done by broadening the development agenda. This model is more
concerned about the poverty elimination without posing any conditions to change their
existing neo-liberal policies.