The term Washington consensus, used to refer to a policy perspective that relies largely on markets to deliver economic development, seems almost old-fashioned these days. However, from a macroeconomic perspective at least, there is little that differentiates today’s effective development policy menu from that prescribed by the most orthodox characterizations of the Washington consensus. In fact, so little has changed over the years that the Washington consensus’ macroeconomic policy conventions—liberalization, privatization and macro stability—are rarely critically singled out by the academic and policy establishment as a failure in need of a new macroeconomic paradigm.
This paper expands on this contention, reviewing the primarily empirical research on the employment impacts of the macroeconomic policy environment, with a particular focus on women’s employment whenever extant research allows. It begins by briefly characterizing the terrain of neoliberal development macroeconomic theory and policy, both of which are at the heart of the opportunities and constraints that emerging and developing economies face today. Though it focuses on laying out general principles, this paper emphasizes those aspects that are central to employment issues. It covers the following research areas: (i) the slowdown in economic growth and the decline in the responsiveness of employment to growth; (ii) trade and investment liberalization and its impact on employment; (iii) informalization and its relationship to liberalization and macroeconomic performance; (iv) the impact of inflation targeting on employment; (v) the impact of the increasing frequency of crisis and volatility on growth and employment; and (vi) the public sector. These areas not represent an exhaustive list of the relevant employment effects, but they also capture the main areas of research into the employment effects of neoliberal macroeconomic development policy. A lot remains to be done and understood about these relationships, as demonstrated by the gaps in evidence and contentions covered in this paper.
Elissa Braunstein is Associate Professor at the Department of Economics, Colorado State University, United States.
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