The 1980s debt crisis fueled the Washington Consensus’ rejection of import substitution

Evidence

Prevailing views on a range of issues relating to economic growth and industrialization were challenged as part of “the counterrevolution in development economics” that occurred during the last quarter of the twentieth century (Toye 1993). As a global debt crisis unfolded over the course of the 1980s, widening the gulf separating First and Third Worlds and casting ever greater doubt on the feasibility of import-substituting regimes, a new orthodoxy was being consolidated. Famously summarized by John Williamson as “the Washington Consensus” (Williamson 2004), this neoliberal model prioritized macroeconomic stabilization, liberalization, and privatization as the prescription for the developmental cure. Rejecting “the dirigiste dogma” (Lal 1985) that had haunted and halted the development efforts of poorer countries, the Consensus promoted a market-led paradigm that proscribed the kinds of interventionist strategies embraced by much of the developing world during its short-lived struggle for the New International Economic Order (NIEO). — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1732

Categorization

• XREF: The Washington Consensus trio (stabilization, liberalization, privatization) names the canonical formulation the reader will meet throughout Mont Pèlerin historiography; Williamson’s coinage appears in many foundational works. — connects to: The Washington Consensus misrepresented actual practice of OECD states. — Mark Blyth, Austerity: The History of a Dangerous…, 435; Latin American developmental economics fell on the 1980s debt crisis. — Mark Blyth, Austerity: The History of a Dangerous…, 434; Third World debt crisis enabled 1980s liberalization, not just neoliberal advocacy. — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 1753

Broader Connections

• Third World debt crisis enabled 1980s liberalization, not just neoliberal advocacy. #corroborates (0.85) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1753