Trends in Regional Policy in Post-Washington Consensus Period
The term “Washington Consensus” was coined first in 1989 by John Williamson to describe ten economic policy prescriptions for developing countries that should constitute the standard policy agenda for Washington, D.C.-based institutions such as the IMF, the World Bank, and the US Treasury Department. It commonly refers to an orientation towards Neoliberal policies that, during the 1980~2008 period, was influential among mainstream economists, politicians and global institutions like the IMF and the World Bank. In 2008 and 2009, following the global financial crisis which originated in the United States, a chorus of voices began to proclaim the Washington Consensus has ended.In regional policy area, the year 2008 and 2009 are important for a couple of reasons. First, one of the most influential reports in the history of regional policy was prepared and published by the World Bank. Along with it, the EU launched a series of studies on the future framework for the EU regional policy. In terms of academics, reappraisal of the two most important theories which have had significant influence on regional policy over the last two decades is in progress. One is New Economic Geography (NEG) initiated by P.Krugman (1991a, 1991b)4) and the other is cluster theory initiated by M. Porter(1998).5) NEG is the main theoretical basis of the World Development Report(2009)6) which can be said to take the position of Washington Consensus in policy recommendations. Recently Krugman himself expressed the limitations of NEG in applying to today’s spatial economic problems.7) In Europe, Porter’s cluster theory has been widely adopted as a framework for regional development and competitiveness policy since the early 1990s. But recently, questions on the effectiveness of the cluster approach in Europe have appeared. In this paper, these trends in regional policies after 2008 will be reviewed. Specifically, the key arguments of the World Bank and the EU/OECD and the limitations of NEG in designing regional policy will be critically assessed
