POLI 227 Lecture Notes - Lecture 5: International Financial Institutions, Washington Consensus, Comparative Advantage
4 Feb 2019
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Recommends privatization as the path to economic success and integration into the global market: cut budget deficits; privatize state enterprises; reduce tariff protection; emphasize export development; cut subsidies; reduce regulation; broaden the tax base. If you remove the strains on the market, the market will work itself out. Founded by the us and europe in 1944. World bank and international monetary fund (also known as bretton-woods institutions) World bank, imf lending to southern countries took off after 1973 oil crisis. In 1980s, lower global prices for primary commodities triggered "lost decade" for global south. Countries became highly dependent on world bank and imf loans. 1973 - 74 oil crisis boosted oil costs. Large us banks made huge loans to developing countries. Regions" debt went from <30b$ in 1970 to over 230b$ in 1980. Interest rates outstripped growth; in 1982, mexico threatened to default.
