IO week 5

Question 1

“Policy leverage.”

Answer 1

The Bank’s practice
of using its resources to persuade governments to adopt particular policies came to be
known as “policy leverage.”

Question 2

“Washington Consensus”

Answer 2

The “Program of Sustained Growth,” which was launched by the US Treasury
Secretary James Baker in 1985, proposed the IMF, World Bank, and regional development banks engage in coordinated “structural adjustment” lending aimed at market liberalizing policy reforms. These reforms included the privatization of state-owned
industries, the lifting of trade barriers, and the removal of regulations. This becomes known as the Washington consensus. Associated with a major expansion in international financial organizations’ use of their policy leverage