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Comment on the Consensus

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journal contribution
posted on 01.03.1973, 00:00 authored by Allan MeltzerAllan Meltzer

John Williamson's paper is a commendable effort to summarize the policy consensus in Washington about the reforms required to bring Latin America toward stable, non-inflationary growth. Any effort of this kind runs the risk that some of the participants will decide to disagree after seeing that they are part of a consensus. Williamson lists ten principles or policy rules. The list is remarkable as much for what is included as for what is omitted. A decade or more ago, I believe, there would have been much more about policy activism, discretionary judgment on a case-by-case basis, trade-offs between inflation and unemployment, and development planning. Earlier, a vociferous group would have favored import substitution. I am not a Washington "insider", so I do not know whether Williamson has captured the consensus. If he has, the Washington policy community has come a long way toward rules, private property, reliance on the market system, avoidance of deficits and inflation, and an open economy operating in a competitive world market place.

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01/03/1973

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