The Domestic Demand Alternative to Export Led Growth

Published in The Express Tribune, September 21^st, 2015

With the fall of Russia, it became clear to all that the communist paradigm for development has failed. All over the globe, nations leaped on board the only alternative – the capitalist, free market paradigm. “The Washington Consensus” was a collection of standardized strategies, recipes for development, which became widely adopted. After a decade of experience, several evaluations by different sources came to the same conclusion: it failed miserably. Even John Williamson, who invented the term, acknowledged that the results from implementing the Washington Consensus had been “disappointing”. The central message of the World Bank report entitled Economic Growth in the 1990s: Learning from a Decade of Reform, “is that there is no unique universal set of rules . . . We need to get away from formulae and the search for elusive ‘best practices’.” Nobel Laureate Joseph Stiglitz ridiculed the Washington Consensus, stating that “one size fits all policies are doomed to failure. Policies that work in one country may not work in others.” He contrasted the success of the East Asian economies – which did not follow the Washington Consensus – with the failure of those that did.

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