In This Review

The Political Economy of Policy Reform
The Political Economy of Policy Reform
Edited by John Williamson
Institute for International Economics, 1994, 596 pp.

The most dramatic event of the early 1990s was the collapse of the Soviet empire and the disintegration of the Soviet Union. But more important for many people around the world was the dramatic change in economic philosophy and policy that occurred in dozens of countries during the late 1980s and early 1990s, including several former communist countries. The change was the major shift toward and acceptance of what has been called the Washington consensus: orthodox macroeconomic policy, deregulation, trade liberalization, privatization and generally greater reliance on market forces and integration with the world economy. The process has seen some setbacks, but it continues.

Williamson gathered a number of participants in this economic shift from 15 countries so-called technopols, i.e., persons trained in economics who later became politicians and policymakers. He asked them to reflect on several questions concerning their experiences. Why did the Washington consensus come to be accepted where its elements had previously been rejected in favor of statism in various degrees? How were many programs that would hurt some segments of society, at least in the short run, made politically acceptable? Where the reforms were not fully consolidated, what were the obstacles and the reasons for setbacks? The results, published with commentary by specialists in both the economics and the politics of economic reform, make fascinating reading.