Economic orthodoxy and the East Asian crisis

It is increasingly apparent that the Asian economic crisis has also led to a serious ideological crisis in the West. Before the collapse there was bro ad agreement among Western orthodox economists that developing countries sh ould pursue a set of economic policies, often referred to as the 'Washingto n consensus', which included financial sector liberalisation privatisation of state-owned enterprises, fiscal discipline and trade, exchange rate and foreign investment deregulation Since the collapse, however; this consensus has broken down. This paper examines the emergence of the new so-called po st-Washington consensus, with its emphasis on governance and social capital . The lexicon of the new policy paradigm underlying this new consensus incl udes civil society, safety nets, and, especially, governance, to be added t o the conventional Washington terminology of open markets, deregulation, li beralisation and structural adjustment. Our central thesis is that this new post-Washington consensus is an attempt to place more emphasis on the poli tical and institutional foundations for programmes of structural reform. Ho wever it is also a kind of politics of antipolitics that attempts to insula te economic institutions from the process of political bargaining.