ABSTRACT
This was the intervention of the author at the closing Panel of a Conference in Honor of Albert Hirschman on Development Strategies for Latin America. It draws attention to some shortcomings of the so-called “Washington Consensus”, John Williamson’s apt expression to describe the view that better policies lead to better results, worse policies to worse results. This is true but trite, trivial and tautological. The author suggests that there are three types of policies to be addressed: the first is related to the quest for macroeconomic stability; the second to much-needed microeconomic reforms; the third is the missing link in the Washington Consensus and has to do with the resumption of growth and investment with technological change in an increasingly competitive world economy. This requires, in addition to macro- stability and micro-reforms, some visions of the future and a much more effective pattern of interactions between the private sector and a modernized and active public sector, given the interdependence of investment decisions in the presence of economy-wide externalities.
KEYWORDS:
Washington consensus; economic growth