Austerity: The New Normal A Renewed Washington Consensus 2010-24

The paper shows that, since 2010, governments have been cutting public expenditure. According to IMF fiscal projections, a new shock is to start in 2020-21, affecting 130 countries. Rather than investing in a robust recovery to bring prosperity to citizens, austerity has become the “new normal.” Austerity measures have negative social impacts. Austerity will affect approximately 5.8 billion people by 2021—about 75 per cent of the global population. For billions of people, the persistence of a long jobs crisis and austerity mean a deterioration of living conditions, rising inequalities and social discontent. 

The paper presents the renewed Washington Consensus advised to governments that are left with limited budgets—and the alternative UN Consensus on Development for All Austerity and budget cuts do not need to be “the new normal.” There are alternatives, even in the poorest countries. Governments can find additional fiscal space to fund public services and development policies through at least eight options, The report calls for urgent action by governments to identify financing options to accelerate progress towards the achievement of human rights and the Sustainable Development Goals (SDGs).