III - WASHINGTON CONSENSUS AND POST-WASHINGTON

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Questions and Answers

What primarily attracts Foreign Direct Investment (FDI) to China?

Low labor costs only

Government tax incentives exclusively

High-quality labor and stable conditions (correct)

Large market size regardless of conditions

How does the Beijing Consensus differ from the Washington Consensus?

Emphasizes strong state intervention and social investment (correct)

Focuses on minimal state intervention

Promotes market-driven solutions exclusively

Rejects any form of local economic strategies

Which of the following elements is a key feature of the Chinese model of economic development?

A blend of state control with market dynamics (correct)

Complete market deregulation

Dependence solely on foreign investments

Strict adherence to the Washington Consensus

What is a significant legacy of the Washington Consensus?

Increased inequality and instability in some regions Signup and view all the answers

Which aspect does strategic trade theory emphasize in relation to government intervention?

Targeted intervention can strengthen key industries Signup and view all the answers

Which of the following is NOT a priority of the Beijing Consensus?

Minimal government intervention Signup and view all the answers

What role do state-designated regions play in the Chinese model?

They facilitate industrialization and economic growth. Signup and view all the answers

Which characteristic describes the approach taken by the Beijing Consensus?

Flexibility in development strategy driven by state involvement Signup and view all the answers

In the context of the Chinese economic model, which statement is accurate?

It integrates various strategies to meet local economic needs. Signup and view all the answers

What impact has the mixed approach of the Beijing Consensus had on economic development?

Created a unique development path that differs from Western approaches. Signup and view all the answers

What was one of the key critiques of the Washington Consensus relating to social impacts?

It worsened inequality and poverty. Signup and view all the answers

What does the Post-Washington Consensus emphasize?

Institutional Development for transparency and equity. Signup and view all the answers

Which of the following is a core concept of Strategic Trade Theory?

Promoting sectors with entry barriers and increasing returns to scale. Signup and view all the answers

Which form of government intervention aims to protect domestic industries?

Import Restrictions Signup and view all the answers

What economic approach was adopted by China post-1978 under Deng Xiaoping?

State capitalism with market reforms. Signup and view all the answers

What was a significant achievement of the Chinese Development Model?

Lifted 500+ million people out of poverty. Signup and view all the answers

What was one unintended consequence of the One-Size-Fits-All approach of the Washington Consensus?

Ineffective local governance. Signup and view all the answers

Which country is known for significant government support for its aerospace industry, specifically Airbus?

France Signup and view all the answers

Which of the following best describes the approach of the Beijing Consensus?

Integration of state capitalism with strategic market reforms. Signup and view all the answers

What aspect of the Washington Consensus was criticized as economic imperialism?

Undermining local economic sovereignty. Signup and view all the answers

Study Notes

Washington Consensus Critiques

Critiques centered on social impacts, economic sovereignty, one-size-fits-all approach, and short-term growth vs long-term.
Austerity and privatization exacerbated inequality, poverty, and social unrest.
Perceived as economic imperialism, undermining local decision-making, especially in Latin America.
Inappropriate for all contexts, leading to unintended consequences.
Stabilization efforts often failed to create sustainable and inclusive growth, repeating debt crises.

Post-Washington Consensus

Emerging in the late 2000s, emphasized poverty reduction, social inclusion, and institutional development.
Blended market reforms with tailored policies to strengthen institutions, protect vulnerable groups, and promote environmental sustainability.

Strategic Trade Theory

Emphasizes industries with high returns and entry barriers (aerospace, semiconductors, biotech).
Governments can intervene to promote domestic firms, increasing income and jobs.

Forms of Government Intervention

Subsidies reduce costs and boost competitiveness.
Export incentives offer tax breaks to increase export market share.
Import restrictions (tariffs and quotas) safeguard domestic industries.
Research and development (R&D) support fosters innovation for global competitiveness.

Successful Examples of Strategic Trade Theory

EU subsidized Airbus to compete with Boeing.
Japan invested in electronics and automotive in the 1980s.
South Korea incentivized Samsung and LG.

Chinese Development Model (Beijing Consensus)

Evolved from Soviet-style socialism to a state capitalist model with market reforms after 1978.
Boosted agricultural output (8.2% annual growth) and sustained a 9.5% annual GDP growth.
Successfully lifted over 500 million people from poverty.
Became a global exporter and manufacturer.

Key Features of the Chinese Model

High-quality labor (health, education, predictability) proved more attractive to FDI than low costs.
State-designated regions spurred industrialization to attract investments.
Blended state control with market dynamics for stable, rapid growth.

Impact of the Beijing Consensus

Offers a contrasting development model to the Washington Consensus, prioritizing strong state intervention, social investment (in areas like health and education), and tailored, local economic strategies.

Key Takeaways for Political Science Students

The Washington Consensus had mixed results, with some countries experiencing growth but others facing inequality and instability.
Strategic trade theory highlights the potential of targeted interventions for key industries.
The Beijing Consensus presents a flexible state-driven model for development different from Western liberal economics.

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Description

Explore the critiques of the Washington Consensus and the emergence of the Post-Washington Consensus. This quiz analyzes the implications on social impacts, economic sovereignty, and strategic trade theory. Understand how these economic approaches shape policies and influence growth strategies.