From the Washington Consensus to the London Consensus: A Critical Analysis on Economic Policymaking in the Age of AI

DOI

10.2991/978-94-6463-950-6_38How to use a DOI?

Keywords

Washington Consensus; London Consensus; Economic Policymaking; Macroeconomics; Financial Stability; Artificial Intelligence

Abstract

The term ‘Washington Consensus’ was coined by John Williamson in 1989 to refer to a set of prescriptive guidelines for developing countries, especially in Latin America, which were emerging out of debt crises. This guidelines on fiscal consolidation, privatization, deregulation, financial and trade liberalization were adopted by the multilateral agencies such as the World Bank and IMF to be used as conditionalities to debtor countries approaching these agencies. While the prescriptions contained in the Washington Consensus yielded certain positive results, it was seen that the Consensus remained silent on issues around state capacity, distribution, inclusion and in the last few years, around sustainability and climate change. As a result, not all countries could achieve the desirable outcomes and some countries, notably India and China charted out their own trajectories, not fully complying with the prescriptions in the Consensus. These drawbacks have called for a new look into the desirability of continuing with the Washington Consensus. The London Consensus for the 21st Century has emerged as the latest entrant which seeks to build on the omissions of the Washington Consensus. Drafted by 50 leading economists, this Consensus underscores the need for building state capacity, focusing on human capital development and exploring sustainability of development. This paper examines the new London Consensus in the backdrop of the existing Washington Consensus and critically reviews the improvements, challenges and opportunities that this new paradigm brings. There is a special focus on the role of artificial intelligence (AI) that is playing a major disruptive role in the economies with a special approach on developing countries such as India in the light of the new London Consensus.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Aranyak Saikia
PY  - 2025
DA  - 2025/12/29
TI  - From the Washington Consensus to the London Consensus: A Critical Analysis on Economic Policymaking in the Age of AI
BT  - Proceedings of the International Conference on Smart Systems and Social Management (ICSSSM 2025)
PB  - Atlantis Press
SP  - 558
EP  - 584
SN  - 1951-6851
UR  - https://doi.org/10.2991/978-94-6463-950-6_38
DO  - 10.2991/978-94-6463-950-6_38
ID  - Saikia2025
ER  -