1. What was the Washington Consensus? An agreement in the 1980s amongst Washington-based banks on the principles for approving loans to developing countries. A consensus in the 1980s amongst leading American politicians on the principles for allocating foreign aid. A neo-liberal package of policy recommendations put together in the early 1980s by the World Bank and the IMF together with other Washington-based financial institutions. 2. Identify two main types of reforms in the Structural Adjustment Programs packages. Providing imminent economic stabilization by means of financial policy, adjustment of exchange rates and enforcing trade balance. Lowering tax levels for both companies and private individuals to encourage more spending and consumption of domestically produced goods. Changing key institutional structures, for example, introducing rule of law and private property rights. Measures for changing the economic policy in the long run, for example, making changes to the banking system, deregulating trading policies, abolishing state monopolies and encouraging market competition. 3. Identify three common repercussions of the Structural Adjustment Program reforms. Economic liberalization resulted in the expansion of productive sectors such as industry and manufacturing and a structural change in the African economies. Growth and the repayment of loans was achieved through intensive growth with a more efficient use of the factors of production and increased productivity. To balance the budget, state expenditures were cut which had a negative impact on social development such as education and health care. De-regulation and the growing number of private actors meant increasing producer prices for the large groups of African smallholder farmers. African countries experienced a modest but consistent growth in GDP per capita from the late 1980s onwards. De-regulation opened for a growing number of private actors, but the African states generally persisted in controlling and taxing exports.