The world's newest developing nation

Tim Hazledine and John Quiggin have a neat paper in the latest issue of the Australian Journal of Political Science (working paper version here). Their abstract:

No more free beer tomorrow? Economic policy and outcomes in Australia and New Zealand since 1984
There are no controlled experiments in macroeconomic policy, nor in systematic programs of microeconomic reform, but a comparison between New Zealand and Australia over the period since 1984 provides as close an approach to such an experiment as is ever likely to be possible. From quite similar starting points the two countries pursued liberal reform programs that differed sharply, mainly as a result of exogenous differences in constitutional structures and the personal styles of the central actors. Australia followed a more cautious, piecemeal, consensus-based approach, whereas New Zealand, in contrast, adopted a radical, rapid, ‘purist’ platform. The NZ reform package was generally seen by contemporary commentators as representing a ‘textbook’ model for best practice reform. However, Australia since 1984 has performed much better than New Zealand, whose per capita GDP growth indeed ranked at or near the bottom of the OECD. In this paper, we assess a variety of explanations for the divergences in policies and outcomes.

Sidenote, 25/5: While Hazledine & Quiggin focus on Australia’s more rapid growth, I think it’s interesting to note that in the case of inequality, Australia and NZ followed a pretty similar trajectory. See Figures 8 and 9 of this paper, for example.

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9 Responses to The world's newest developing nation

  1. Patrick says:

    Does anyone seriously doubt that this is entirely due to our being Australians and their being New Zealanders???

  2. Andrew Leigh says:

    Wasn’t this also the case prior to 1984?

  3. Patrick says:

    No, there were still a large number of Australians skulking away in the guise of New Zealanders then – they’ve since revealed their true colours and fled to terra firma, and the Isles have suffered accordingly!

  4. Sinclair Davidson says:

    Can the New Zealand economy sustain the Australian standard of living? Are we comparing apples and pears here?

  5. derrida derider says:

    Sinclair, don’t talk about NZ apples – you’ll upset our farmers (fire blight and all that).

    But yes, I agree the starting positions weren’t all that similar and they’ve diverged further over time for reasons that aren’t just the result of policy differences (hint: we’re miners, they’re farmers.). Still, they probably oughtta have done better if the free market economists were right; I’ll read with interest.

  6. Sinclair Davidson says:

    ‘Still, they probably oughtta have done better if the free market economists were right’

    Well, that’s the question, isn’t it? They may well be doing as best they could have. Mind you, if we bought their apples and banana’s they could do a whole lot better.

  7. and so when did the New Zealanders tell the United States “no nukes”? just an idle thought…

  8. Patrick says:

    And when do they get around to becoming a state? Before or after the Greater Pacific Islands Territory joins? Because if after, we could always just lump them in with that Territory – their rugby team, which is just about all anyone really cares about, is already the de facto Greater Pacific mostly Blacks anyway.

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