While the “traditional” G20 was unified in either promoting or implementing the so-called Washington Consensus, it seems the new G20 can only agree to disagree.
The Washington Consensus being a list of 10 stupid things you should not do to an economy. Just terrible that governments took note of it, isn’t it?
I’m no fan, and I’m sure you know more about it than I do, but as I understand it, this is the list. They’re not all stupid things, are they?
1. Fiscal policy discipline, with avoidance of large fiscal deficits relative to GDP;
2. Redirection of public spending from subsidies (“especially indiscriminate subsidies”) toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment;
3. Tax reform, broadening the tax base and adopting moderate marginal tax rates;
4. Interest rates that are market determined and positive (but moderate) in real terms;
5. Competitive exchange rates;
6. Trade liberalisation: liberalisation of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs;
7. Liberalisation of inward foreign direct investment;
8. Privatisation of state enterprises;
9. Deregulation: abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudential oversight of financial institutions;
10. Legal security for property rights.
I usually read it the other way around. Don’t do the opposite of these things because that would be doing stupid things.
It is a wish list that makes the 10 Commandments look universally honoured.
If the G20 meeting venues, hotels, etc were provided with the WC (how apt) list printed on toilet paper they could not be indulging in a bigger piss take.
“broadening the tax base”
But by raising the personal allowance to £11,500, we’ve considerably narrowed the tax base.
Tim, on a very tangentially related note, can you fisk (or have you already commented on elsewhere?) the Price Of Oil report, which claims that Japan spends $16.5bn a year on oil subsidies?
Here’s the Guardian’s summary, with a link to the report in the text: https://www.theguardian.com/world/2017/jul/05/g20-public-finance-for-fossil-fuels-is-four-times-more-than-renewables
I did have a quick look. They claim that any government backed spending or investment–a development bank lending into an oil field development for example–is a subsidy. Complete nonsense. Also, in their definition, hydro is not a renewable.
Why do we care how much the Japanese spend on oil? How much does it move the global price?
@ Andrew M
Some of us believe that it is stupid to levy income tax on people to whom we are paying subsidies because their income is too low.