Globalization and the Washington Consensus

Many commentators have equated globalization with the Washington Consensus which implies eleven key commitments:

1. International financial market liberalization;

2. Domestic capital market liberalization;

3. Trade liberalization (particularly in developing countries);

4. Labor market ‘flexibility’;

5. Secure individual property rights over physical and financial assets;

6. Weak property rights over human assets (particularly skills);

7. Reduction in size and role of the public sector, including privatization of publicly-owned productive assets, and an end to managed trade and industrial policies;

8. System of taxation that is not only less progressive but also shifts taxes from capital to labor, and subsidies from labor to capital;

9. Independent central banks (as part of a more general move towards the ‘technocratization ‘ of economic policy making);

10. ‘Social safety net’ type of approach to social protection, i.e., more targeting, selectivity and conditionality;

11. Privatization and liberalization of social policy.

Source: ILO: Economic security for a better world 2004)