Austerity: The new normal
This new report by Isabel Ortiz and Mathew Cummings is co-sponsored by Initiative for Policy Dialogue, International Confederation of Trade Unions, Public Services International, European Network on Debt and Development (Eurodad), and the Bretton Woods Project.
Austerity and the Washington Consensus do not need to be the “new normal.” There are alternatives, even in the poorest countries.
This working paper:
- Examines historical and projected government expenditure trends for 189 countries
- Reviews the latest IMF country reports for countries to identify the main channels used by governments to adjust expenditures
- Discusses the negative social impacts of austerity measures
- Presents the renewed Washington Consensus advised to governments that are left with limited budgets—and the alternative UN Consensus on Development for All
- Calls for urgent action by governments to identify fiscal space to accelerate development, human rights, a green recovery with jobs and inclusive growth, and progress towards the Sustainable Development Goals (SDGs).
Austerity and the Washington Consensus do not need to be the “new normal.” There are alternatives, even in the poorest countries. Given the importance of public expenditures for national development and the attainment of the SDGs, it is imperative that governments and IFIs redress austerity and other policies that benefit few, and instead explore all possible alternatives to expand fiscal space to ensure full employment with universal social protection, inclusive growth, social and green investments, human rights and sustainable development for all.