John Harold Williamson (June 7, 1937 – April 11, 2021) was a British-born economist who coined the term Washington Consensus.
[1] He was also on leave as chief economist for South Asia at the World Bank during 1996–99, adviser to the International Monetary Fund from 1972 to 1974, and an economic consultant to the UK Treasury from 1968 to 1970.
He made 10 rules that were imposed by the World Bank, the International Monetary Fund and the US government on developing nations.
At the time, there were four other professors on the economics department: Alan T. Peacock, Jack Wiseman, John Hutton, and Douglas Dosser.
In his fourth year at York, Williamson became a visiting professor in the department of economics, Massachusetts Institute of Technology (MIT), where he worked alongside Joseph Stiglitz, Charles Kindleberger, Paul Samuelson, and Tony Atkinson.
The Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística) offered him a post to begin its graduate program in economics.
Sir Roy Harrod of Christ Church, Oxford University offered him a prestigious post, which Williamson declined.
[3] During the early 1970s, Williamson was involved in working with the Committee of Twenty for devising the IMF's strategy to comprehensive systemic reforms.
He worked with Fred Bergsten, then the institute's Director, on ways of helping Latin American countries stabilize their currencies through this process.
Beginning in 1985, Williamson worked with Deputy Secretary of the Treasury Richard Darman to develop a comprehensive system of optimal exchange rates ("target zones").
[9] Research has shown that Williamson was largely correct in his assessment of altering expectations through his proposal of post-Louvre target zones.
There were also adoptions of FEERs in the private sector, most notably the Goldman Sachs desirable effective exchange rates (GSDEERs).
He was invited by the United Nations Secretary General Kofi Annan to assess policy reform in Latin America.
The panel found that to secure economic growth and equity, developing countries needed to achieve balanced budgets, ensure macroeconomic discipline, and support human capital investments.
In 1989, he coined the term "Washington Consensus" to describe policy reforms that the International Monetary Fund, World Bank, and U.S. Treasury advocated for emerging-market economies.
The term arose from a publication, “What Washington Means by Policy Reform” (1990) that described what countries should do according to the convictions of Washington-based institutions.
Some politicians, notably the former finance minister of Brazil Luiz Carlos Bresser-Pereira, recognized that the term had been used outside of the original context.
[3] Joseph Stiglitz, former Chief Economist of the World Bank and Chair of the Council of Economic Advisers, did not object to the Washington Consensus per se, but to the neoliberal policies that policymakers have adopted.
[18] More recently, economists have recognized that the term was misconstrued from its original meaning, notably with regard to the opening of the capital account.
The three guidelines he proposed were: 1. a commitment to innovation, 2. emphasis on sustainable growth through measures alongside GDP, and 3. a policy of self-determination.
In turn, Williamson argued that the Beijing Consensus comprised five major points: 1. incremental reform, 2. innovation, 3. export-led growth, 4. state capitalism, and 5.
[23] In 2006, Williamson published an article describing the benefits of bonds linked to the growth of a country's gross domestic product (GDP).
[24] These refer to securities where the issuer (a government) promises to pay the investor returns based on the changes to that country's GDP.
[25] The idea was also developed by other distinguished economists, including Nobel Prize Laureates Robert Shiller and Joseph Stiglitz.