From the Washington

to the Beijing Consensus

While Bush administration officials like to blame the so-called Latin turn to the left on populist "thugs" and demagogues, an alternative explanation holds that the failure of Washington Consensus economic policies paved the way for the rise of leaders such as Venezuela's Hugo Chavez and Bolivia's Evo Morales. Latin America gave the Washington Consensus the good old college try: privatization, deregulation, trade liberalization, fiscal austerity... And what did it get? Higher poverty, higher unemployment and slower rates of growth than in the supposedly bad old import-substitution days. And in the case of Argentina, almost complete economic collapse.

It's the big story in developmental economics, the discrediting of the Washington Consensus and the subsequent search for a new path. And China is playing no small role in the aftermath: There's even a school of thought that China has a model of its own to offer the developing world: the "Beijing Consensus."

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Ramo defines the Beijing Consensus as having three main parts:
1. A commitment to innovation and constant experimentation. There are no set rules carved in stone and handed down by the IMF to a Moses-like prophet that everyone must follow if they want to get to the promised gross domestic product. There is, instead, constant tinkering and constant change, and a recognition that different strategies are appropriate for different situations.
2. A rejection of per capita GDP as the be-all and end-all: sustainability and equality must also be part of the mix.
3. Self-determination.