Book Chapter
More Instruments and Broader Goals

Professor Stiglitz provides a thorough critique of the 'Washington consensus', a set of beliefs that has become highly influential. His cogent analysis shows that while certain elements of the Washington consensus - for example, low inflation and low budget deficits - might have been relevant for addressing the economic crises of Latin America in the 1980s, they are not sufficient for achieving long term growth, or even macroeconomic stability under different circumstances. Professor Stiglitz emphasises the lack of attention of the Washington consensus to developing sound financial markets (as opposed to mere financial liberalisation). This is borne out by the current problems in the financial sector across much of East Asia.