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A quarterly magazine of the IMF
  September 2003
Volume 40, Number 3
Redrafting the Reform Agenda
Beyond the Washington Consensus
Jeremy Clift
In 1989, economist John Williamson coined the term Washington Consensus. It referred to a set of reforms that many economists and policymakers believed Latin America would have to undertake to recover economically from the debt crisis of the 1980s. The reforms soon came to be seen as a model for other developing regions to follow. Results have not met expectations, however, and today, there is fresh debate about the reform agenda outlined in the Consensus.
(20 kb, pdf file)

From Reform Agenda to Damaged Brand Name
John Williamson
The author of the term Washington Consensus explains how he came up with the 10-point reform package set forth in the Consensus. He says the term has acquired such different meanings that it is time to drop it from the vocabulary and describes what the policy agenda should look like now, given the disappointing results of the reforms of the 1990s. (79 kb, pdf file)

Latin America: Overcoming Reform Fatigue
Guillermo Ortiz
The governor of Mexico's central bank talks about the disappointing results of the "first-generation" reforms of the Washington Consensus and emphasizes the importance of "second-generation reforms"—building the right institutional framework. (99 kb, pdf file)

Africa: Finding the Right Path
Trevor A. Manuel
South Africa's Minister of Finance says that some of the reforms in the Washington Consensus did not apply to Africa the way they did to Latin America, and that the Washington Consensus failed to address three of Africa's main problems: the dual economy, lack of social capital, and weak states. (60 kb, pdf file)

Also in This Issue

Monetary Regime Options for Latin America
Andrew Berg, Eduardo Borensztein, and Paolo Mauro
What exchange rate and monetary regime a country should choose is a perennial question for many governments, particularly in Latin America. Should the region adopt a common currency, or are floating exchange rates a better choice? (77 kb, pdf file)
Riding the Tiger
Jorge Iván Canales-Kriljenko, Roberto Guimarães, Shogo Ishii, and Cem Karacadağ
Intervention in foreign exchange markets is an important tool for central banks. In developing countries with flexible exchange rate regimes, central banks intervene to correct misalignments or stabilize the exchange rate, calm disorderly markets, accumulate foreign reserves, or supply foreign exchange to the market. The IMF is attempting to identify best practices in this area.

(65 kb, pdf file)

Assessing Offshore Financial Centers
Salim M. Darbar, R. Barry Johnston, and Mary G. Zephirin
Offshore financial centers pose a potential risk to other financial systems and yet are often not subject to the same regulatory and supervisory standards as onshore centers. The IMF has designed a program that many OFCs are now participating in, increasing the information available about the centers and helping them strengthen their supervisory systems.
(60 kb, pdf file)

Who Will Pay?
Peter S. Heller
Time is ticking away to solve a host of long-term fiscal challenges posed by, among other things, aging populations, climate change, the growing interconnectedness of the global economy, security issues, and technological changes.
(82 kb, pdf file)

Being Prepared
Paul K. Freeman, Michael Keen, and Muthukumara Mani
Poor countries are being hit the hardest by natural disasters, which have become more frequent and more destructive. What kinds of physical and financial measures can they take to protect themselves when a natural disaster strikes?
(76 kb, pdf file)

Staying on Track
James Boughton and Zia Qureshi
The World Bank, the IMF, and partner agencies have developed a framework for monitoring progress toward the Millennium Development Goals.
( kb, pdf file)

Making Services Work for Poor People
Shantayanan Devarajan and Ritva Reinikka
To escape from poverty, the poor in developing countries need more access to, and more control over, essential services like health care, education, clean water, and sanitation. (53 kb, pdf file)


From the Editor (50 kb, pdf file)

Letters to the Editor
Welfare State Not a Burden, Disbursing Aid Wisely, Getting Inflation Targeting Right. (30 kb, pdf file)

In Brief

IMF helping in Iraq's recovery
Raghuram Rajan, author of Saving Capitalism from the Capitalists, to be IMF's Economic Counsellor and Director of its Research Department; global spending on AIDS falls short of needs; Middle East needs to boost trade. (30 kb, pdf file)

People in Economics

Putting Economic Policy to the Test
Asimina Caminis
interviews MIT's Esther Duflo, an up and coming development economist whose research in the field could lead to changes in development strategies. (65 kb, pdf file)

Back to Basics

Prakash Loungani
Which of the three measures of income inequality—across countries, within a country, or between individuals globally—is the best? (33 kb, pdf file)

Picture This

Hit by Disaster
Statistics on the increasing frequency and destructiveness of natural disasters.
(58 kb, pdf file)

Book Reviews

Monetary Regimes and Inflation: History, Economic and Political Relationships, Peter Bernholz
Too Sensational: On the Choice of Exchange Rate Regimes, W. Max Corden
Why Economies Grow: The Forces That Shape Prosperity and How to Get Them Working Again, Jeff Madrick. (47 kb, pdf file)

Country Focus

The Middle East and North Africa
Statistics on growth, trade, unemployment, and government budgets; social indicators; and institutional quality index. (179 kb, pdf file)

Straight Talk

More Cheerleading or More Whistle-Blowing?
Kenneth S. Rogoff
The IMF should speak out more clearly and forcefully when it thinks countries may be headed for trouble. (33 kb, pdf file)