Washington Consensus and Lieo

Topics: World Bank, International trade, International Monetary Fund Pages: 4 (1210 words) Published: December 9, 2011
Developing countries have been targeted as being powerless in the current globalizing (micro) world of political domination by authoritarian approaches. The dependency/world system theories appears to be at work, where the developing countries are powerless or vulnerable allowing them to be dependent on advanced technologies, policies and ideas from their hegemony for economic growth and development as well as political survival. According to Amartya Sen, development is the process of economic, technological and social change by which human welfare is improved. The Liberal International Economic Order, (L.I.E.O) Washington Consensus (W.C) and Structural Adjustment Programs (SAP’s) were policies formulated by the economically developed countries (core) for the impoverished developing countries (semi-periphery/periphery) to carry out more reforms with loans and grants so as to maintain, economic and political stability (WIARDA,1990). These structures have created an anarchical divided world with so many uncertainties (Rourke, 2004) showing poor results among developing countries such as economic deprivation, political domination ecological degradation, cultural regression and technological dependence.

LIEO is a supranational institution, reflecting free market thinking as regulations are removed, global trade becomes efficient and people needs are better met,(globalization). Whereas as the W.C is described as a relatively specific set of ten economic policy prescriptions that constitute a “standard” reform package promoted to or for crisis wrecked countries by Washington DC, United States (US) (Williamson ,1989). It is based on international lending institutions (Bretton Woods) such as the International Monetary Fund (IMF) and World Bank (WB). (SAPs) is equivalent to W.C. where developing countries are given conditionalities stipulated by the Bretton Woods Institutions in order to qualify for new loans to assist in debt repayment on existing loans owed to...
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