The term Washington Consensus most commonly refers to an orientation towards free market policies that from about 1980 - 2008 was influential among mainstream economists, politicians, journalists and global institutions like the IMF and World Bank. The term can refer to market friendly policies that were generally advised and implemented both for advanced and emerging economies. It is sometimes used in a narrower sense to refer to economic reforms that were prescribed just for developing nations, which included advice to reduce government deficits, to liberalize and deregulate international trade and cross border investment, and to pursue export led growth. The term Washington Consensus is also sometimes used by economic historians to label an era, which depending on the author can range from at most 1979 - 2009 to at least 1989 - 2000.The Washington Consensus was a list of policy proposals that appeared to have gained consensus approval among the Washington-based international economic organizations. This document was made up of ten points such as fiscal regulation, tax reform and deregulation. The Washington Consensus was most influential during the 1990s. In the first decade of the 21st century it became increasingly controversial. In 2008 and 2009, following the outbreak of the financial crisis, people were thankful that the Washington Consensus had ended.
The Washington Consensus describes not only the documents and reforms, but was also used as slang and referred to the power that the United States gained over the economic future of Latin America. The head leaders of the international institutions, such as the IMF and World Bank, had many ties with the United States. While this is no surprise considering the U.S. has one of the biggest economies in the world, the shift in power was said to be very dramatic (Meade 306). With the control over the major international institutions controlling money and economy, the United States has a huge impact on deciding the future of Latin America. The policies decided in the IMF can, as seen in Venezuela, make or break a country. The IMF can choose to impose strict policies in order for the country to receive the loans they need. The U.S., with its power in the Washington Consensus can determine the economic future of a country.