NEOLIBERALISM AND THE WASHINGTON CONSENSUS
As set forth by its main critic, there were two major problem with the ISI model: (1) too big and inefficient government, and (2) too much state control (fixing of both prices and wages) over the makrtplace. Having formulated the problems and cause of third World economic failures in this way, it was easy to see what solution had to be: reduce state size and allow markets to operate freely. These policies, called “neoliberalism” or new liberalism, since they represented a revival of earlier theories of the free, liberal, unfettered market, came together in a package called the “Washington Consensus”