¹Department of Economics, Colorado State University, 1771 Campus Delivery, Fort Collins, CO, 80523-1771, USA. E-mail: John.Marangos@colostate.edu

^*I am grateful to John Williamson, Sean Alley, Ben Fine, John King, Jeffrey Sachs and Russell Smyth for their useful comments. In addition, I thank the editor of the journal and two anonymous referees for providing constructive recommendations.

Abstract

Williamson proposed the term 'Washington Consensus' to refer to the lowest common denominator of policy advice being addressed by the Washington based institutions. Owing to the considerable confusion about the term, I distinguish between two different versions of the term: the Washington Consensus proper to denote the original set of policies initiated by the father of the term and the Washington Consensus as a neoliberal manifesto to represent the policies identified with the term 'neoliberalism'. It is demonstrated that the Shock Therapy process had some common elements with both versions of the Washington Consensus; however, there were also important differences due in large measure to the differing circumstances in transition economies and Latin American economies.