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Washington Consensus vs Beijing Consensus
Transcript of Washington Consensus vs Beijing Consensus
There is no such thing as a magically universal economic formula for success. Every country presents a different background and thus a different situation.
It is of the utmost importance to remember the role that cultural, political, regional, and/or national traditions play in outlining a strategy to assist that country rise to its full economic potential. The Washington Consensus The Washington Consensus
The Beijing Consensus John Williamson's 10 Guidelines The Beijing Consensus Joshua Cooper Ramo's Guidelines Role of GDP The Washington Consensus centralizes its evaluation of a country's growth based on GDP. The Beijing Consensus does not put as profound emphasis on GDP as it does other measures of growth such as sustainability of economy and even distribution of wealth.
The main goal of both of these consensuses is to promote not only growth, but growth that lasts. Therefore, it is proven more beneficial to adopt a more well-rounded perspective when analyzing a country's growth. Main Factors of Comparison and Controversy 1. Role of GDP
2. Financial Sovereignty
3. Government Intervention Financial Sovereignty Financial sovereignty is imperative to solidifying a developing country's transition towards becoming a developed country because it identifies the country as capable of keeping more powerful countries accountable. The Washington Consensus pursues financial sovereignty as an indirect consequence of general development, whereas the Beijing Consensus specifically encourages financial sovereignty through policies of self-determination.
This more deliberate action towards financial sovereignty presents a more secure future for the country's economy. Developing countries are often simultaneously combating corruption in government and politics. Thus, granting that sort of unstable power to an equally unstable or developing government could present much more dangerous risk than potential growth.
The ideologies of classical liberalism are much safer to implement in developing economies in most instances, given the laws of human nature. The Washington Consensus model does not always align with the developing country's cultural/political direction. It tends to singularly push its ideologies over other economic or political ideologies.
The Beijing Consensus presents a lot of improvements to the Washington Consensus, but it fails to address the exploitation of the Chinese labor force as a major factor of China's growth. General Criticisms Practical Government Intervention 1. Avoidance of large fiscal deficits 10. Legal security for property rights 9. Promotion of foreign direct investment 8. Liberalization of trade 7. Deregulation 6. Privatization of state enterprises 5. Competitive exchange rates 4. Market regulated interest rates 3. Tax reform 2. Redirection of public spending 1. There is no ubiquitous solution to fit every developing country's needs. 2. There are more indicative factors of growth besides GDP. 3. In addition to helping build the country's economic foundation, it is just as imperative to promote finacnial self-determination and independence. What we can take away: