email

View Comments

Domestic Demand-Led Growth: A New Paradigm for Development

By Thomas Palley | May 24, 2002

Abstract: For the last two decades development policy has been guided by the Washington Consensus.2 This approach triumphed in the late 1970s, when it replaced import-substitution which emphasizes development of domestic capacities for domestic use purposes. Now, owing to a decade of economic crises - including Mexico in 1994, East Asia in 1997, Russia in 1998, Brazil in 1999, and Argentina and Turkey in 2001 - the Washington Consensus is under attack. Proclivity to crisis is a real problem, but an even profounder failing of the Washington consensus has been its failure to deliver growth and equitable development. Table 1 shows that world growth has systematically slowed during the period of Washington Consensus dominance, especially in low and middle income countries. World growth in the period 1990 - 96 was slower than the period 1980 - 89, which in turn was slower than the period 1965 - 80. Moreover, not only has growth slowed, but it has also been accompanied by greater inequality within and between countries (Denninger and Squire, 1996; Milanovic, 1999: Lustig and Deutsch,1998). CREDIT INFO: Palley, Tom, "Domestic Demand-Led Growth: A New Paradigm for Development," presented at the Alternatives to Neoliberalism Conference sponsored by the New Rules for Global Finance Coalition, 23-24 May 2002.


Copyright 2002 New Rules for Global Finance Coalition For permission to use or distribute this paper, please contact the New Rules for Global Finance.

Download File (185.08 K)

Read More: Debt, Development, Economy, Finance, Globalization, Governance, Poverty, Global

blog comments powered by Disqus

Site Search

Global Research Engine

This search includes our Core Network partners.

Join Our Mailing Lists

The Journal