CONCEPT
The Washington Consensus
The package of market-liberalization policies — fiscal austerity, privatization, trade liberalization, capital-account opening — that dominated multilateral economic policy from the 1980s through the 2000s, whose failures Stiglitz documented and whose structural logic is now being reproduced in AI governance with comparable distributional consequences.
The Washington Consensus is John Williamson's 1989 term for the set of market-liberalization policies that the IMF, World Bank, and US Treasury promoted as standard prescriptions for developing economies. The package included fiscal discipline, tax reform, interest rate liberalization, exchange rate competitiveness, trade liberalization, capital-account opening, privatization of state enterprises, deregulation, and secure property rights. The framework treated these policies as universal solutions applicable to any developing economy, regardless of institutional context or historical circumstance. Stiglitz's critique — developed in Globalization and Its Discontents and elaborated across subsequent works — demonstrated that the one-size-fits-all application produced worse outcomes than alternative policies attentive to local conditions, and that the framework's intellectual foundations did not survive empirical examination. The AI governance discourse is now reproducing the same structural pattern: universal frameworks developed by technocrats and industry representatives without substantive input from affected populations, producing predictable distributional consequences that populations absorb without recourse.
