A capsule review of "Colossus, The Price of America's Empire" by Niall Ferguson:

This book is largely about the relations betweeen the United States and weaker states in what people now call the "developing world". Ferguson's particular claim to expertise is in addressing these questions largely from an economic perspective -- his current position is at NYU's business school. He strongly advocates interventionist policies. The twenty-page index has entries for "Washington, George" and "Washington Post", but none for "Washington consensus". Nor can I recall encountering the latter phrase anywhere in the text.

In slightly more detail:

Ferguson wants America to adopt explicitly imperialist policies toward the developing world -- but he does not suggest that we take direct control there. He's not for colonies. His introduction, defining the term "empire", takes pains to include exercise of soft power and indirect rule. So he advocates that we find indirect means of controlling the behavior of nominally independent states.

But we're already doing that. Conditions attached to World Bank loans and IMF financial assistance packages have a strong -- some would say controlling -- influence over the economic policies of governments throughout the developing world. And particularly over the past decade or two, they've come to look an awful lot alike, under the widely acknowledged influence of the U.S. Treasury department. So, acting through these institutions, we've been imposing a basket of policies called the "Washington consensus" all over the planet. Countries in Latin America, southeast Asia, sub-Saharan Africa, and so forth have all been pushed into trade liberalization, privatization, and extreme fiscal austerity measures. And while some of these policies have obvious benefits for their first-world trading partners, the benefits for citizens of these countries on the ground have been harder to see.

Ferguson does not acknowledge this. In fact, he barely acknowledges the existence of the IMF, mentioning it only four times: once to report that it was formed after World War II, once to suggest that it extend aid to "the new Iraq", and twice while citing data from its reports.

Instead, Ferguson advocates we start to intervene in the economic affairs of developing states as if we weren't already doing that. In support of which, he seems to suggest that these states have been choosing their policy entirely on their own, with results so bad that the notion that they should have any independence at all can be reasonably questioned:

... the experiment with political independence, expecially in Africa, has been a disaster for most poor countries. Life expectancy in Africa has been declining and now stands at just forty-seven years. This is despite aid, loans and programs of debt forgiveness. Only two sub-Saharan countries out of forty-six, Botswana and Mauritius, have bucked the trend of economic failure.

Some might think it relevant to note that Botswana and Mauritius are also two of the very rare third-world countries which have attracted attention for bucking "Washington consensus" policies -- Mauritius for its regulation of trade, and Botswana for rejecting IMF loans and the accompanying austerity package. Particularly when Gambia, Ferguson's poster child for the ineffectiveness of third world government, has been far more willing to mold its policies to the Washington consensus -- in so far as it can.

But Ferguson has his own explanation for the relative success of Botswana and Mauritius; he thinks they were particularly good at fostering institutions which create a business-friendly climate. Well, he's not the only one. But if all the countries who have taken World Bank and IMF aid, to worse results, have been unable to foster business-friendly institutions, then what does that say about the judgment of the Bank and the IMF?

But stay tuned for some alarming heterodoxy before you take my word on anything economic...