Why was the Washington consensus irresistible in Latin America Essay

Why was the Washington consensus irresistible in Latin America - Essay Example Within the current globalized system, the importance of international political economy and the means by which decisions of economic importance are engaged, the overall level of relevance is maximized. As a function of this, the following analysis will engage the reader with an understanding of why the â€Å"Washington Consensus† came to be so widely accepted and agreed upon by a litany of different Latin American countries. Although merely referencing the Washington Consensus, and the determinants that it necessarily imposes, would be an effective start, the analysis will also integrate with an in-depth discussion of each of the 10 points which engenders the Washington consensus as a means of understanding the ultimate attraction that so many Latin American countries had to this particular economic integration and approach (Marangos, 2008). Further, the unique drawbacks and tacit inabilities that the Washington Consensus will also be discussed with regards to the way in which stakeholders within this particular issue realize that it was in their best interest to accept the Washington consensus even with its tacit level of drawbacks. ... cit level of understanding with respect to world affairs, international relations, and political theory will necessarily be engaged and hopefully understood (Arestis, 2004). History/Background Firstly, before delving into the ultimate rationale behind why so many Latin American countries chose to integrate so fully and completely with Washington consensus, it must be understood that key macro economic factors throughout Latin America provoked and invoked a level of greater cooperation and willingness to attempt a different approach than might have been realized that any other point in history (Babb, 2013). By the time of the 1980s, Latin America, in addition to much of the rest of the world, was still reeling from the economic repercussions of the global malaise that had existed for almost a decade during the 1970s. Whereas the United States, and the rest of the world for that matter, felt the impact of the drastic increase in fuel costs that took place during the late 1970s and earl y 1980s, the impact that this had upon developing nations were even more profound (Duncan, 2003). This stands to reason due to the fact that the United States and other developed nations had a level of wealth that could be leveraged against a sudden price fluctuation with respect to a inelastic demand. What ultimately prompted the oil crisis during the 1970s had to do with the rising levels of debt, inaccessibility of foreign credit, and a restriction in global trade (Ruckert, 2006). Whereas the fuel crisis of the 1970s and early 1980s was of course of relevance, it must further be understood that this particular issue was a significant impact with regards to developing nations around the world; especially Latin American countries. The rationale behind this is due to the fact that Latin