Countries' economies follow international economic architectures that are successful. Communism failed and the current economic crisis—cultivated in the United States—demonstrates many flaws in relatively unregulated capitalism.
In The Wall Street Journal, Yasheng Huang notes that "the so-called Beijing Consensus has proved its superiority over the deregulated capitalism of the Washington Consensus after the recent financial crisis."
This alternative focuses on the importance of the state in directing and impelling economic growth is inherently more authoritarian. China's economic success is the core illustration of this model, but it is being embraced by many developing countries. The authoritarian political process is often attractive to elites, while the confusion, pain, and lack of direction in creative capitalism are often seen as too high a cost to bear.
Opinions about the efficiency of the WTO and the Bretton Woods institutions, hence, divide along the dichotomy between approaches, captured in these caricatures of Washington vs. Beijing.
Regardless of the approach you find most appropriate, developing countries will play a significant role in the future. The emergence of Brazil, Russia, India, and China is gradually shifting global interests. The global economy is changing; therefore, perhaps the rules of the game should change as well.
What do you think? Should the Washington Consensus be reformed, perhaps by the U.S.? Should Beijing or other emerging powers take the lead in the reforming the current global economic architecture?
By Francisco Eguiguren and William Vocke
For more information see:
Huang, Yasheng. "Chinomics:
The Fallacy of the Beijing Consensus." The Wall Street Journal,
June 19, 2010.
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