The Post-Washington Consensus. Prepare this assignment according to the guidelines found in the APA Style Guide. An abstract is required. The term was originally created by Williamson and has been a part of political and economic terminology ever since. The defenders of the consensus call it a boon and a path to greater economic freedom for the less developed countries of the world. Those who oppose it call it a cruel implementation of new liberalism and a tool for the global hegemony of America (Williamson, 2000).
The Bretton Woods system was established in 1944 for the international management of currency between countries. It was a system that gave rules and regulations for the commercial and fiscal connections between the countries which had emerged as victorious after the Second World War. The main purpose of establishing this system was to rebuild those economies which had collapsed after the war utilizing the creation of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD) (Bird, 1994).
The central feature of the system was a promise each country made to all that their monetary policies would keep the currency of the country close to a fixed value (within 1%) to gold. The IMF would have the authority to close temporary payment imbalances between countries and would monitor the fiscal activities of other nations. While the system worked well for several years, it collapsed in 1971 once the United States pulled out from the gold standard (Bird, 1994).
Williamson himself is well aware of the detractions and has said that people misunderstand the notion completely. He says that audiences around the world think that the Washington Consensus is a name given to neo-liberal policies that have been forced upon various weaker countries by the Washington-based international financial.