TY - JOUR
T1 - The Washington consensus works
T2 - Causal effects of reform, 1970-2015
AU - Grier, Kevin B.
AU - Grier, Robin M.
N1 - Publisher Copyright:
© 2020
PY - 2021/3
Y1 - 2021/3
N2 - Traditional policy reforms of the type embodied in the Washington Consensus have been out of academic fashion for decades. However, we are not aware of a paper that convincingly rejects the efficacy of these reforms. In this paper, we define generalized reform as a discrete, sustained jump in an index of economic freedom, whose components map well onto the points of the old consensus. We identify 49 cases of generalized reform in our dataset that spans 141 countries from 1970 to 2015. The average treatment effect associated with these reforms is positive, sizeable, and significant over 5- and 10- year windows. The result is robust to different thresholds for defining reform and different estimation methods. We argue that the policy reform baby was prematurely thrown out with the neoliberal bathwater.
AB - Traditional policy reforms of the type embodied in the Washington Consensus have been out of academic fashion for decades. However, we are not aware of a paper that convincingly rejects the efficacy of these reforms. In this paper, we define generalized reform as a discrete, sustained jump in an index of economic freedom, whose components map well onto the points of the old consensus. We identify 49 cases of generalized reform in our dataset that spans 141 countries from 1970 to 2015. The average treatment effect associated with these reforms is positive, sizeable, and significant over 5- and 10- year windows. The result is robust to different thresholds for defining reform and different estimation methods. We argue that the policy reform baby was prematurely thrown out with the neoliberal bathwater.
KW - Economic development
KW - Property rights
KW - Reform
KW - Rule of law
KW - Washington Consensus
UR - http://www.scopus.com/inward/record.url?scp=85090480640&partnerID=8YFLogxK
U2 - 10.1016/j.jce.2020.09.001
DO - 10.1016/j.jce.2020.09.001
M3 - Article
AN - SCOPUS:85090480640
SN - 0147-5967
VL - 49
SP - 59
EP - 72
JO - Journal of Comparative Economics
JF - Journal of Comparative Economics
IS - 1
ER -