Lecture Notes on the Washington Consensus and Latin America

Vocabulary flashcards regarding the Washington Consensus and its impact on Latin America, focusing on definitions and key concepts discussed in the lecture notes.

Washington Consensus

A set of 10 economic policies proposed in 1989 by John Williamson aimed at stabilizing Latin American economies, including tight fiscal policies, privatization, deregulation, and free trade.

Institutional Strength

A crucial factor neglected in the Washington Consensus, referring to robust property rights, judicial effectiveness, and low corruption levels, as demonstrated by Argentina's recurring crises.

Human Capital & Infrastructure

A neglected aspect in the Washington Consensus, demonstrated by insufficient government expenditure as a percentage of GDP, leading to a disadvantage in global competitiveness, as seen in Brazil and Colombia.

Two-Gap Theory

A key finding from development economics that emphasizes investment and foreign exchange limits, which was ignored by the Washington Consensus, leading to policy failures in responding to structural unemployment and underinvestment.

Adaptive Adjustments

Practical modifications to policies like privatization, requiring strict competition and transparency rules to prevent monopolistic abuses, and subsidy cuts implemented gradually alongside strong social safety nets.

Strategic Government Intervention

Balanced approach combining effective policy and efficiency with government intervention in education, health, and regulation, which is crucial for equitable growth and long-term prosperity, as demonstrated by East Asian countries.