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The Washington Consensus May 8, 2008

Posted by davidzweig in Uncategorized.

Academy Fellow Hazel Henderson has frequently decried the export strategies that underpin the so-called Washington Consensus. Also at the Milken conference (cited in the post below), Marc Gunther describes an economist attaching some fascinating numbers to the situation. The declines Ricardo Hausmann mentions are major contributors to the geopolitical problems that are now washing up on the shores of developed nations, the US chiefly among them.

Richardo Hausmann, an international development expert at the Kennedy School at Harvard, noted that all of the world’s 24 rich industrial countries had their peak per capita income since 2000; they are, despite fits and starts, growing their economies. But only 58% of the 112 developing countries have had their peak per capita income in the 21st century. Others peaked in the 1960s, 1970s or early 1980s, often because they relied on an export product that fell out of favor. “Most growth collapses coincide with export collapses,” he said. Countries need to aim for more “sophisticated” export packages to insure against commodity price fluctuations.

50, 40, or 30 years of decline. Wouldn’t that take a toll?



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