BEYOND THE WASHINGTON CONSENSUS: THOUGHTS ON EQUITY, DEMOCRACY AND CONFLICT IN LATIN AMERICA

Abstract

The Washington Consensus failed in the full range of its objectives, because it was relatively blind to the importance of governance and the role of the state. Without effective, inclusive and accountable governance, not only was it more difficult to implement the macro and microeconomic reforms but the flawed implementation undermined the sustainability of those reforms. Inevitably some of the measures produced losers as well as winners, and the poor and the most vulnerable always tended to be the losers. When the measures were implemented corruptly, or perceived as such, the consequences exacerbated a sense of exclusion and alienation of growing segments of the population. It is not as if we do not know ways to incorporate the poor in national life: access to land through land reform; investment in micro and small credit facilities; technology and rural infrastructure; investment in social capital. All of these measures would enhance the inclusion of the rural population, increase social cohesion and I suspect strengthen support for democratic institutions. Such support is necessary to overcome the sense of impunity that persuades many in the region that the elites in their countries fail to pay their taxes, fail to treat their employes with dignity, receive favored access to contracts and pay their way out of any brush with the law. The belief that those with power have impunity from the fair enforcement of the law undercuts the democratic ethos. It violates the social contract.