Toward a Post-Washington Consensus: The Importance of Governance Structures in Less Developed Countries and Economies in Transition SUMMARY

This study takes the limits and failures of policy reforms based on the so-called Washington Consensus as a starting point and argues that effective and feasible economic reforms need a politico-institutional foundation. Since failures in policy reform, poor public management, and rent seeking are interpreted as instances of institutional failure, effective governance structures are required, which provide appropriate incentive systems to cope with such failures. Taking the interaction of the economy and the polity explicitly into consideration, a concept of governance is developed, that may become a pivotal component of a post-Washington Consensus.