Which policy package includes privatization and deregulation promoted by international financial institutions?

• A. Keynesianism
• B. Mercantilism
• C. Social Democracy
• D. Washington Consensus

Answer: (D)

This item tests knowledge of a market‑oriented reform package pushed by international financial institutions that emphasizes privatization and deregulation as paths to liberalizing economies. This set of policies is known as the Washington Consensus. It emerged in the late 20th century, promoted by the IMF and the World Bank, and centers on opening markets through privatizing state enterprises, deregulating business to reduce barriers, and liberalizing trade and investment, along with other measures like fiscal discipline and financial liberalization. The idea is that stronger private sectors and freer markets lead to growth and efficiency. In contrast, Keynesianism focuses on active government spending to manage demand; Mercantilism emphasizes protectionism and state-led accumulation; Social Democracy centers on welfare provision within a market framework. So the described package is the Washington Consensus.