Mer om NZ.
Trond Andresen
********************************************
>Failed Free Market Experiment in New Zealand
>(London Financial Times, Wed 30th August 2000)
>
>According to conventional wisdom, New Zealand has done everything right in
>its economic policies: rolling back the slate in industry and welfare,
>establishing an independent central bank, repaying its public debt. Yet
>over the fifteen years of reform its economic performance has been dismal.
>New Zealand is the new Argentina, a once-rich state.
>
>If ever a country has been run by economists, it is New Zealand. In 1984,
>the colourful Roger Douglas became Finance Minister. He began the most
>comprehensive programme of economic reform seen in a developed country.
>According to current orthodoxy, New Zealand has done everything right. The
>central bank is independent and its governor’s pay is linked to the
>inflation rate. State industries have been comprehensively restructured and
>privatised. With none of the regulatory supervision found elsewhere.
>
>What was one of the world’s most comprehensive welfare states has been
>dismantled. The Employment Contracts Act insists that conditions of work
>are a private matter between employer and employee. In surveys of the
>“economic freedom of the world” New Zealand is ranked with Hong Kong and
>Singapore, ahead of Britain and the United States, and well ahead of
>continental Europe. After fifteen years, the electorate delivered its own
>verdict on the reforms by returning an old labour style government, led by
>Helen Clark.
>
>If we look coldly at New Zealand economic data, the voters are right.
>Since the experiment began, economic growth in New Zealand has been
>much slower than in the rest of the developed world. Productivity and
>living standards have barely risen while almost all other rich countries
>have enjoyed sustained expansion. The past fifteen years have completed
>New Zealand’s transition into a very select group of states: those that were
>once rich but are rich no longer. The standard of living has fallen from
>1.25 times the average standard of living in high-income countries in 1965
>to 0.62 last year. New Zealand is the Argentina of the second half of the
>twentieth century.
>
>What went wrong? The world has treated New Zealand badly. Its economy
>was oriented towards Australia and Europe, especially Britain. It was and is
>the most efficient producer of lamb, wool and milk. The rise of agricultural
>protection, and the UK’s accession to the EU, was deeply damaging. But
>this happened some time ago. Between 1965 and 1976 the price New
>Zealand received for its exports, relative to what it paid for imports, fell by
>more than one third. Since then, New Zealand’s terms of trade with the rest
>of the world have improved slightly. Economic performance since 1976 is
>the responsibility of New Zealanders themselves. Between 1976 and 1984,
>premier Robert Muldoon urged his compatriots to ‘think big’, and gave them
>aluminium smelters and petrochemical plants.
>
>Most of these schemes failed, at large cost to the taxpayer. The
>liberalisation which followed was an understandable reaction but it was
>no more successful. The programme is still widely admired outside New
>Zealand. As was true of Margaret Thatcher’s Britain, the success of reform
>is often measured by the extent to which it has occurred rather than the
>benefits which have flowed from it. The US Central Intelligence Agency
>claims in its 1999 factbook that the reforms have boosted growth and moved
>incomes towards the levels of the big West European economies but its
>statistics provided show the opposite.
>
>The more serious challenge is to those international economic agencies
>World Bank, International Monetary Fund and Organisation for Economic
>Co-operation and Development which have advocated everywhere the
>reform programme that New Zealand adopted so enthusiastically. Unable
>to ignore the evidence the OECD waffles. ‘It is difficult to reach definite
>conclusions about why economic performance has not improved to a
>greater extent in the light of the substantial policy changes that have taken
>place, not least because it is hard to be precise about the counterfactual to
>be used for comparison’. (OECD Economic Survey, New Zealand, 1999).
>That means things have been bad, but they might have been worse. ‘The
>reforms are on balance, commendable for the application of a broad set of
>consistent principles and the extent to which announced measures were
>actually implemented’. You might equally congratulate a man jumping off
>a cliff for his firmness of purpose. Still, like all peddlers of panaceas, the
>OECD’s conclusion is that the patient has not believed strongly enough.
>‘Despite the enormous strides made to date, there is unfinished business
>as to structural policies.’ it says.
>
>After fifteen years, it cannot seriously be argued that more time or more
>reform is needed before benefits emerge. The New Zealand experiment was
>a test of the claim that government is the source of most economic ills and
>the withdrawal of government is a solution to them. The New Zealand Treasury
>adopted that argument with almost obsessive zeal. And it is clear now that
>the experiment failed. The electricity supply disruptions which blacked
>out much of central Auckland for five weeks in 1998 resulted from a
>sequence of managerial and technical failures that might have happened
>anywhere. But the place where they did happen is the only advanced country
>in the world where electricity distribution is neither owned nor regulated
>by government.
>
>Before economic reform, New Zealand had effectively no unemployment.
>The price was that many people were employed in not very productive jobs.
>But perhaps that was a better answer, economically as well as socially,
>than putting them out of work. As Tim Hazledine has shown, New Zealand’s
>reforms have not been cheap. There has been a substantial increase in the
>numbers and earnings of managers and in financial and business services.
>This is not wrong in itself, but it has to be justified by a corresponding rise
>in the productivity of those they manage, advise, and finance. And this has
>simply not happened.
>
>Russia was not the place to have tested socialism. And New Zealand an
>isolated easy-going country with impressive social cohesion - was the wrong
>place to try out economic libertarianism. Economists must be grateful for
>such experiments. But it is usually better not to live in the countries where
>they take place.
This archive was generated by hypermail 2b29 : 03-08-01 MET DST