WASHINGTON -- Is the so-called Washington consensus coming to an end?
The Washington consensus, it will be recalled, is the view of the world which rests squarely on the model of free markets, free capital flows, financial liberalization and privatization. For the last 20 years it has been the orthodox approach of all the main world financial institutions and the gospel of almost every Western economist. And it has plainly brought enormous benefits to many parts of the global economy.
But the mood is changing. Despite clear signs of Asian economic recovery, the turbulence of recent years has left the theory badly bruised and its advocates on the defensive.