New Zealand industry policy 2000-2008
In the 1890s and early 1900s
During the post-war years
By 1999 there was a consensus
that the free-market policies of the 1980s and 90s had not improved
Therefore, when Labour came to power in December 1999 the political opportunity existed for it to change economic policy; in fact, voters had asked for it. Although Labour itself had initiated the liberal reforms of the 1980s, the economic policies being developed by the party between 1996 and 1999 were anti-liberal.
After the 1999 election Labour
needed the support of the
Historical analyses of
Since 1999
Labour changed the direction of government policy away from the liberal economic policy pursued between 1984 and 1999.[5] Its stated aim was to lift the country’s economic performance, especially increasing average incomes. This included various centre-left macroeconomic policies, especially changes to monetary policy, and the more radical microeconomic industry policies favoured by Anderton. The dramatic policy shift from centre (in the 1970s) to right (1984-1999) to left makes New Zealand a unique case study of whether governments are able to radically change policy direction and be successful.
The academic literature on
When Labour and the
The Clark government resolved to turn this around so that New Zealand would have a brighter economic future than what was predicted if the policies of the 80s and 90s continued. It formulated what was later called the ‘economic transformation agenda’ (actually a more proactive macroeconomic policy) and decided to implement interventionist microeconomic industry policies to improve the structure of the economy (move it away from dependence on primary production and towards ‘high growth potential’ industries.
The literature on New Zealand between 1974 and 1990 is comprehensive. There is a consensus that NZ policy had proceeded from ‘old welfarist / Keynesian’ policies to extreme liberal-orthodox economic policies. There seems little disagreement about this, although former Labour Prime Minister David Lange has argued that it was never the original intention of Labour reforms, which he insists were originally intended merely to increase the political accountability of parliamentarians and bureaucrats.[6]
The literature is characterised by a dichotomy between left-wing and right-wing academics who argue respectively that the reforms have been bad and good for the country. It is generally agreed that market-based reforms were more extreme in New Zealand than in other countries, with the government adopting economic advice from Treasury. New Zealand’s electoral system allowed governments a free hand to implement policies as they saw fit and, as in Australia, the opposition National party supported market liberalisation.
Accounts of New Zealand economic policy between 1990 and 1999 continue in the same fashion. It was during this period that National was re-elected to office under prime ministers Bolger and Shipley, and they continued with liberal economic policies such as microeconomic deregulation and privatisation. Some commentators[7] have argued that National set about ‘finishing’ ‘Labour’s unfinished business’. Other authors suggest that National continued with market reforms but was more aggressive in pursuing deregulation of the labour market and in cutting welfare and similar payments[8]. Literature stresses the importance of the Fiscal Responsibility Act (1994) and the Employment Contracts Act (1991), the latter being the government’s industrial relations reforms which ended New Zealand’s characteristic centralised wage arbitration system.
Political study on this period stresses the significant change in New Zealand’s electoral system from a conventional first-past-the-post simple representative system to the ‘MMP’ system, which is essentially a system of multi-party proportional representation (based on the German system). Since 1996 both National and Labour have only been able to hold government in coalition with other parties, National in coalition with New Zealand First and Act and Labour in coalition with the Alliance, Progressive Party and others.
With respect to analysis of New Zealand since 1999 there is, again, a reasonably broad consensus. However, it is marked by a dichotomy between left-wing and right-wing responses to economic policy changes.
New Zealand is consistently and continually said to be an example of ‘Third Way’ politics[9]. Helen Clark herself used this term to describe the policies of the government.
Kelsey (2002) argues that the Clark Government consolidated neoliberalism and ‘smoothed over its ‘rougher edges’. She argues that Labour fits neatly into the conventional third way ideology, having presented its policies as ‘smart government’. She argues that many ministers, such as Steve Mahoney, were inspired by Anthony Giddens. As a side point, she also points out that Jim Anderton was obstructed by his department’s commitment to orthodoxy.
The first term of the Labour-Alliance coalition was celebrated by left-wing academics as a successful return to social-democratic politics after a long period of economic liberalisation[10]. The Alliance was seen as pulling the Labour party in government towards the left. Between 1999 and 2002 the government implemented many measures that were seen as radical, including halting tariff reductions, re-nationalising the partly privatised Accident Compensation Commission, repealing the Employment Contracts Act and increasing the top marginal income tax rate from 33c per dollar to 39c for income over NZ$60 000. However, towards the end of the government’s term the Alliance self-destructed, expelling its parliamentary leader and other MPs, and was unrepresented after the 2002 election.
After 2002 most left-wing academics became sceptical of the government’s subsequent policies. Roper (2005), for example, has argued that ‘The veneer is social democratic but the substance is neoliberal’. He argues that ‘One of the central characteristics of the Third Way is overlaying neoliberal policies with social democratic rhetoric or ‘spin’ ’.
Eichbaum (2006) uses the ‘third way’ as expressed originally by Giddens (1998) as a way of locating the current Labour government ideologically. Although arguing initially that the government is broadly speaking ‘third way’ in outlook he is subsequently careful to elaborate more specifically what exactly he means.
Eichbaum argues that unlike in Britain and America where ‘New Labour’ and the ‘new’ democrats were mostly concerned with distinguishing the centre-left parties from previous socialist roots, New Zealand Labour under Clark in the late 1990s was more concerned with distancing itself from neoliberalism, including the previous tendencies of the Labour party itself during the 1980s. New Zealand can therefore also be contrasted with the Australian Labor Party which has sought to establish its commitment to ‘sound finance’ and been frightened (or unwilling) to criticise neoliberal policies. The ability and willingness of NZ Labour to do the opposite is no doubt reflective of the extent of the relative economic decline of NZ over recent decades and the change to proportional representation. This is an important measure of NZ’s political circumstances and the current centre of gravity in its economic debate.
Eichbaum attempts to briefly measure the extent to which the Labour-led government conforms to standard measures of third way politics as adumbrated by Giddens, firstly by measuring what the government says and secondly by measuring what it does. In the first respect he argues that ‘Labour in government has tended not to articulate a particularly clear or accessible ideological framework.’ He suggests that this could be because of a general supposed opposition in the electorate and in the party specifically to ‘big ideas’ (a pejorative euphemism for market liberalism). In fact, the government has continually emphasised ‘practical’ politics and policies. Eichbaum does, however, point out that there has been some dialogue in the party about developing a coherent ideological ‘narrative’, with minister Steve Mahoney giving speeches on the issue and advocating a ‘new social democracy’, a third way ‘but in NZ terms’ (p54). Helen Clark has also sometimes distanced herself from typical conceptions of the third way by using the phrase ‘(developing) a NZ way’.
Eichbaum argues that ‘One would have to say that anyone looking for a policy mix to suggest a too-comfortable accommodation with neo-liberalism would be disappointed…..’.
Eichbaum also unfortunately comments that
Contrary to the
predictions of some (and in particular neoliberal critics) the policy mix has
produced the lowest rate of unemployment in the OECD,…… relatively stable
prices and a sound fiscal position.
Although this comment is made in footnotes only it potentially reveals an assumption made by Eichbaum about the chain of causality between the government’s policies and economic circumstances, assuming that the former directly causes the latter.
Roper (2005) provides a good economic analysis of changes in the accumulation regime in New Zealand through the ‘Keynesian’ period, neoliberal period and since 1999. The analysis ranges across various topics, but the third part of the book focuses upon a primarily Marxist explanation for the changes in politics and the economy since the 1950s. This includes quite a good explanation for the collapse of the post-war accumulation regime, but only very briefly attempts an explanation for the reasons for the recent supposed trends in New Zealand towards a ‘third way’ politics.
His analysis of these particular changes over time focuses primarily on Marxist political economy rather than being dominated by common dogma about class struggle or inequality. Its explanation encompasses phenomena such as the falling rate of private profits, the ratio between wages and profits and the level of investment. He speculates that the liberal reforms over recent decades have made the recovery since the mid-1990s possible because they helped shift the ratio of wages to profits towards profits and thus increased the level of private investment, but he does not develop this thought.
Roper argues that when economies are booming governments can introduce reforms to improve the quality of life of citizens but in down periods governments are more likely to undo these reforms. He argues that this is essentially what has happened in New Zealand, with governments since 1975 undoing social democratic reforms from previous decades. He is, however, probably wrong to say that reforms have been wound back in previous decades. Even though neoliberalism was dominant from 1975 onwards in NZ, many significant reforms have nonetheless been implemented and statistics show that welfare spending, social spending and overall government spending have continued to grow as a proportion of GDP throughout the period.[11]
Roper also turns his attention to Clark government, which he labels as ‘third way’ – which is to say, fundamentally a continuation of past liberal policies with some changes ‘at the margins’. Other than the employment relations changes Roper almost exclusively focuses on the changes in government spending in various areas. This is a common problem with most analyses of economic policies which confuse ‘policy’ with ‘the amount of money that is being spent’. Roper analyses changes in the amount of money allocated to welfare or other programs but does not really analyse other changes that go beyond merely spending money. He does not adequately consider microeconomic industry policy changes, spending only one page discussing the growth and innovation network, when this could have been investigated in more depth, especially since the government itself argued that it was at the core of its economic strategy.
Mintrom and Wanna (2006) argue that the Australian and New Zealand governments have been able to develop a limited ‘transformative capacity’ in recent years. ‘Transformative capacity’ is a term coined by Linda Weiss (1998) which she uses in reference to industry and other policies in Japan and east Asia. It is very unlikely that Weiss herself, an Australian resident, would compare Australian policy in that way to the policies of East Asia. In fact, the policy examples given by Mintrom and Wanna exaggerate or misjudge the character of the policies of the Australian and New Zealand governments.
Mintrom and Wanna argue in the case of Australia that ‘The approach [of recent governments] and recommendations were in no way neo-liberal in character but were framed from an alternative paradigm involving facilitative and selective governmental interventionism. It was industry policy, although the government “did not speak its name”’.
Mintrom and Wanna list many of these types of policies as justification for their argument that Australia has abandoned protectionism in favour of coordinating policies, as developed under the Howard government’s ‘Australia’s Backing Australia’s Ability Strategy’. This in fact conflicts with Weiss’s and other common conceptions of industry policies. Specifically, the list of evidence includes: ‘redirect[ing] the market’ (which is supposedly not liberal), increased spending on business innovation (although this is not further specified), organising a key business summit on innovation, extra funding for ‘business-related university research’, extra money for ‘research infrastructure’ subsidies for research and development, ‘increased government largesse to business’, forming the Industry Research and Development Board (a board which is responsible for allocating research and development grants), surveys to measure the outcome of assistance (although improvement in these surveys ‘could be made’) and general business ‘assistance programs’ (issuing poorly targeted subsidies).
These policy measures do not constitute non-liberal policy or even innovative policy as argued in their title. The Australian government’s economic strategy has primarily been to promote free market principles. Developing a policy of giving subsidies to encourage the market in a particular direction or to use incentives or assistance to firms to invest in research and development is still fundamentally a liberal strategy, and it still ultimately relies on the market to determine the direction of investment and competition is still expected to be the main force promoting growth. Relative to the size of the Australian economy and the scale of business activity, the incentives and inducements offered by the Australian government are small. Because these incentives are, in addition, poorly targeted and are used to fund investment in research that firms would otherwise have undertaken anyway, it is an exaggeration to say that these policies are significant. The Backing Australia’s Ability Strategy was certainly not the main economic strategy of the Howard government. It was more concerned to increase flexibility in the labour market, increasingly use private business models to deliver government services and promoting competitive forces as the main strategy for promoting economic growth. The divergence between Australia and New Zealand industry policy becomes clearer on closer examination.
An alternative explanation of the Backing Australia’s Ability Strategy is that business continually pressures for these subsidies. Further, the logical recommendations of endless taskforces, committees and policy development in the bureaucracy inevitably support the idea that the private sector should be increasingly value-adding and increasing the competitiveness of products and services, a goal which is not supported by free market forces alone. The sheer common sense of such proposals, in contrast to free-market dogma, accompanied by the regularity of reports in support of subsidies, encouragement from business and the Labor party opposition and the low impact on the budget bottom-line of a limited program of subsidies means that it is politically inevitable that at least a token program of subsidies will be offered.
In addition it should be noted that the examples that were given by
Mintrom and Wanna all amount to handing out money to the private sector in one
form or another, something that requires very little creativity – anybody can
give out money and call it a ‘policy’. None of the examples given aim to change
the microeconomic regulatory framework, there is no evident enunciation of any
particular goal, direction or strategy for Australian industry, there is no
policy to support the accumulation of capital for innovative entrepreneurial
activity or new investment generally and there is no program designed to
encourage exports. Almost the entire thrust of the Australian government’s
policies is directed towards maximising free-market effects (or mildly
manipulating ‘incentives’), which is by definition the opposite of industry
policy. Handing out tax-breaks to big business is hardly innovative.
Mintrom and Wanna spend one paragraph only describing New Zealand’s growth and innovation framework. They do point out that the framework explicitly targets four key sectors, a ‘picking winners’ strategy which is clearly anti-free market, but they fail to explore the policy initiative in any further detail. Although the bulk of this article is strangely focused on Australia, when New Zealand’s industry policy is much more significant and ‘innovative’, it is clear that Mintrom and Wanna have underestimated the significance of the Clark Government’s policies.
There is limited academic research on the microeconomic policies of the Clark government from a political economy perspective. Material that is available, as I have discussed above, analyses economic policies in broad terms only.
INDUSTRY POLICY AND THE PURPOSE OF THE PROJECT
Industry policy is a type of interventionist microeconomic policy.
Whereas a liberal economic policy allows the free market[12]
to determine how, where and when capital is invested, industry policy aims to
deliberately increase or coordinate investment in key profitable industries,
such as the automobile industry.[13] Industry policy theoretically aims to change
the industrial structure of an economy, for example away from dependence on the
primary sector and towards manufacturing or high-technology industries.[14] It can seek to achieve this with subsidies or
deliberate tax policies, by developing industry production plans or by
addressing investment or infrastructural issues relevant to the ‘target
industry’.
Where this paper refers to industry policies it specifically intends policies that are interventionist, which are fundamental departures from liberal policies. Liberal forms of industry policies, such as those of Australia, include developing incentives, tax breaks, providing funding for skills training or other limited funding and untargeted funding. Australia has not had an interventionist industry policy program similar in nature to the Growth and Innovation Framework policies in New Zealand. Liberal forms of industry policies are not (relatively) difficult to implement. By definition, they are not resisted by business, they do not require the formation of significant interfering institutions and they do not aim to change how industries are organised or how capital is raised. Despite similar political rhetoric about promoting exports, manufacturing or ‘sexy’ industries like medical research, liberal industry policy programs are usually relatively insignificant, involve only small grants, give tax breaks for research that would be carried out anyway, are generally poorly targeted. Liberal industry policy strategies rarely seek to intervene in the relationship between finance and industry. As has come to prominence in recent years, especially in America, in countries that pursue liberal economic policies, even if they sometimes include (liberal) industry policies to promote manufacturing or otherwise, the finance sector is independent and operates on its own terms. This contrasts with the past experience of many countries, including Japan and German, where there have been complicated interrelationships between finance and industry.
Although New Zealanders are always quick to compare New Zealand and Australian economic performance, I do not want to compare the industry policies of New Zealand with Australia or elsewhere, because it is contrary to the purpose of the project.
The project seeks to understand the weaknesses in how the Growth and Innovation Framework policies were implemented by the NZ government. Because Australia has not attempted to implement interventionist policies that would normally be politically resisted by business or require high levels of bureaucratic capacity, I cannot understand the difficulties faced by NZ in doing so by reference to Australia. I also cannot understand the difficulties experienced by NZ with reference to Japan / Asia or Germany / Europe because these countries implemented industry policies in a completely different political context – including less democratic political systems and a different historical context (post-WW2 reconstruction).
NZ attempted to pursue policies which
had been implemented in the past in countries such as Japan, Sweden, Singapore
and Taiwan, but ‘in a New Zealand way’.
The purpose of the thesis is to show how when New Zealand tried to
implement industry policies, firstly, the specific policies finally chosen
where shaped by liberal norms which favour indirect encouragement of industry
sectors rather than the more direct and interventionist policies, for example
directly intervening in the relationship between industry and the financial
sector. Secondly, the interventionist,
microeconomic industry policies referred to firstly were affected by the
liberal, indirect macroeconomic
policies of the government; Thirdly, the
pre-existing liberal political environment and liberal structure of the economy
required policies that would not be resisted by business and influenced how the
government and business jointly implemented the policies. Finally, the bureaucracy and relevant
agencies had only prior knowledge and experience of liberal economic
policies. The government did not try to
improve policymakers’ expertise in industry policy; this is in contrast to the mentoring and
formal training provided by Japanese bureaucrats to policymakers in Korea,
Taiwan, Singapore, Malaysia and China.
This resulted in industry policies often not being prioritised and
priority being given to liberal policies such as administering subsidies and
grants.
My intention to focus on the implementation of direct,
interventionist industry policies in a liberal democratic polity precludes
meaningful comparisons with Australia or other countries. Put simply, the New Zealand case study is
unique.
The thesis does not propose to compare NZ and East Asian industry policies. I do not propose to study nor analyse East Asian industry policies. The paper aims to evaluate the suitability of NZ’s policies for the desired purpose of developing NZ’s targeted industries. It does this by accessing theory on hypothetically ideal industry policies (see below). As I have argued, theoretical models of how industry policies should be designed are well established in the literature. I give a more comprehensive list which I have compiled of the ideal characteristics in attachment 1 (and see also below).
These theoretical models have been formed by a plethora of studies on East Asia, Europe and elsewhere. These theoretical models have frequently studied East Asia but DO NOT consider East Asian policies to be ‘ideal’. The concept of ‘ideal’ industry policies is a purely hypothetical and theoretical one. My thesis will evaluate NZ’s policies NOT by comparing them to East Asian policies or Japanese policies – as the reader has correctly argued, this would be too big a task for a PhD thesis – but quite properly by comparing NZ’s policies to what the theory (drawing on decades of empirical research) recommends good policies should be.
There is much value to be created by the thesis by reviewing this literature with a view to assessing industry policies that have been formulated in other than the East Asian, European or ‘strong state’ contexts which have so far been the main focus of academic study.
Establishing the exact causes of
industry policy success or failure is not technically possible. However, it is not the primary focus of the
thesis to evaluate how successful the policies were. The main focus of the thesis is to
interrogate the implentation of the government’s decision to pursue a targeted
industry policy strategy by analysing, firstly, the specific policies and
whether they were flawed (hypotheses 1 and 2 below); and secondly, the implementation and the
relationships between policy agencies and business (hypotheses 3 and 4 below).
However, it is incumbent upon me to
present in the thesis what data is available to establish context and give at
least some analysis of whether the policies have been successful or not. I note that many academic works claim
tentative conclusions about the overall success of policies. It will be for the reader of the thesis to
decide what respective weights (if any) s/he should give to the four
explanations for industry policy failure I will study. This will also be supported by my comparison
of the policies implemented in the different sectors.
Although establishing causation is notoriously difficult, this does not preclude any conclusions whatsoever about the success of the policies. Although one cannot claim to understand how the whole world works, this does not mean one cannot make any conclusions. No social research project can make absolute conclusions about the causes of social phenomena. There is a great deal that can be learned by simply documenting New Zealand’s industries and data in a before and after international comparison.
INDUSTRY POLICY UNDER THE CLARK GOVERNMENT
The Clark government’s industry policy ideas developed over its first few years of office. The Alliance continued its policy research and produced Partnership 2000, which gives summary of the Alliance’s policy motivations and the intentions of Minister Anderton. One of the minister’s main priorities was regional development, which led to the formation of local partnerships between councils, businesses, unions and the community.
The first industry policy to be implemented was the Wood Processing Strategy.[15] The government sought to address several problems limiting the long-term potential of the industry, including complex Maori land issues, inadequate infrastructure, a lack of ‘value-adding’ and long-term cash flow problems.[16]
The Science and Innovation Advisory Council released its report, Growing an Innovative New Zealand: a Framework for Action, in 2002. Following this report, the government decided to target three high-growth-potential areas of the economy with the ability to improve the country’s long term economic growth.[17] These were biotechnology, ICT, and the creative industries (especially the screen industry and ‘design’).[18]
The government established taskforces in each of these areas, which were given the task of developing a comprehensive plan for the industry. In 2004, the government established a fourth taskforce for the food and beverage industry. The aim of the taskforces was not only to develop government policy but to develop institutions where each industry could organise itself better, develop its own long term strategy and facilitate intra-industry cooperation. Taskforce initiatives included forming new government bodies, developing peak industry associations, administering grants, performing regulatory and legislative reviews, encouraging innovation, addressing labour skills problems, encouraging overseas business expansion, addressing infrastructure issues and supporting innovation.
Each taskforce comprised about a dozen regular members. They were co-chaired by a senior cabinet minister and a high-level business executive from industry. The rest of the taskforces comprised business executives from the industry. Each taskforce was given a secretariat from Industry New Zealand (Ministry of Economic Development).
The taskforces produced reports in 2003 that each proposed a variety of examinable ‘actions’.[19] Each action was stated as the responsibility of government policy, the industry or specific organisations and the reports set benchmark goals against which to measure success. After 2003 the taskforces set about implementing their own recommendations and the Growth and Innovation Framework Policy Team undertook a review of progress with implementation in 2005.[20]
In many respects these industry policies were ideal policies. The government cultivated a close working relationship with industry, which had the main responsibility for developing and implementing the recommended actions. The government chose a small number of key industries to target and developed supporting institutions. The taskforces also had a clear direction and goals.
My initial investigations also show that the taskforces and other agencies often proposed flawed policies that are not recommended by statist (institutionalist) literature.[21] Also, the government’s main economic priorities were always broader macroeconomic policies.
The purpose of the project is to study the implementation of policies in New Zealand and analyse weaknesses and flaws in how industry policies during the Clark years were implemented. It is not the primary intention of the thesis to test whether the policies have or have not been successful. That is, testing success is not the research question or main goal. The main intention is to show how the NZ government, which made a decision to formulate and implement targeted industry policies , were affected when implementing those policies by, firstly, inexperience in formulating the policies (an over-reliance on liberal and indirect policy ideas); and secondly, the liberal political environment.
Given the practicalities of studying industry policies and the potential for a project to be large and unmanageable, I have focused the project on 109 specific policy initiatives encompassed in the Growth and Innovation Framework policy agenda.
I focus on the biotechnology industry in New Zealand and the
biotechnology taskforce policy process initiated by the report ‘Growing the
Biotechnology Sector in New Zealand: a Framework for Action’. This is my example of relative policy success
(noting that even policy programs in countries which are recognised as
successful were not always 100 percent successful with every initiative). I will compare the policies and
implementation in the biotechnology sector with other sectors incorporated in
the Growth and Innovation Framework strategy:
the ICT sector, Creative Industries sector and Food & Beverage
sector. This will allow me to compare
policy strategies that were created under the same government with similar
policy goals in a similar NZ political / economic context.
The Biotechnology policy process created better designed policies. It had more momentum because it was enthusiastically supported by the scientific community. It created a larger number of permanent changes to how the industry was structured and operates. Finally, it created more institutional processes to develop comprehensive industry strategies and facilitate ongoing (internal and external) industry cooperation.
POLICY RESULTS
From Labour’s and the Alliance’s
policy manifestos, Ministry of Economic Development reports, policy analyses
and the taskforce reports, it appears that the government’s overall policy goal
was to improve the average income of New Zealanders. New Zealand’s average income per capita has
been significantly below the OECD average for the last 20 years and it was
common to cite the goal of returning New Zealand to the OECD average (or to the
‘top half of OECD countries’). New
Zealand’s poor performance (especially between 1987 and 1992) can be seen in
the graph below.
The government had the subsidiary goal of improving incomes and employment rates outside of the country’s cities because standard of living measurements showed a growing gap between cities and the ‘regions’. Full employment was also a goal.
These goals were to be achieved through the combination of relatively standard centre-left macro policies and the more radical industry policies. In relation to industry policy, the government and taskforces had secondary goals relating to each targeted industry, including total employment levels, export income earned, number of operating firms, overall contribution to GDP and real growth in revenues. It is important to isolate data on these variables because they establish whether industry policies, rather than overall economic policies, were successful.
I will assess whether there have been any significant improvements in these indicators over time; that is, a comparative 'before and after' analysis. I will also compare the key industries with respect to other countries. This will be a major task for the thesis: although there is plenty of data available, assembling data which allows a standardised international comparison is complex. The data to be used will come from OECD sources, Statistics NZ, surveys undertaken as part of the ‘Growth and Innovation Framework’ process, business surveys, government revenue data and research from peak industry associations.
To evaluate whether the policies were successful, it will be sufficient that New Zealand improves its performance or rankings relative to other countries, with respect to the overall economy and the industries targeted. There would also need to be improvements in other indicators such as the amount of ‘value-adding’,[22] exports, employment and average incomes. It will not be necessary to show that the government has achieved the arbitrary goals which had been nominated, such as the doubling or tripling of industry outputs within ten years. I will, however, be looking for changes in the overall industrial structure of the New Zealand economy (an increase in the relative shares of the target industries in GDP and employment levels).
So far New Zealand has
maintained its relative OECD position in terms of income per capita. New Zealand was ranked 20th out of 30
countries in 2001[23] and 22nd out of 30
by 2007.[24] However, it has maintained its income at 85 %
of the OECD average during this period (in PPP terms). The United Nations’ Human Development Index
also confirms this.[25]
As the two following graphs on economic growth and unemployment show, New Zealand’s economy fluctuates in comparison to the OECD average and other individual countries. Arguably, this shows a long-term failure of macroeconomic policies which are usually aimed at evening out these fluctuations.[26] It could also be related to various other factors including the small size of the public sector and the vulnerability of the country’s industry structure (which is dependent on primary exports and tourism). National macroeconomic data provides the context against which the success of industry-specific policies must be judged.
New Zealand governments’ fiscal policies likely contributed to these fluctuations, and themselves provide context for understanding industry policies since 1999. The graph below suggests that New Zealand has not used fiscal policy wisely; in the 1990s when almost all other countries ran deficit budgets, New Zealand did the opposite. It also ran big budget surpluses after 2000, although it had low levels of government debt. The graph also shows that the government had significant revenues available after 2000 for it to implement industry policies.
The government’s stated economic aims for industry policy were to increase employment and output in the target industries two and threefold[27] and other ambitious but ‘realistic’ goals in terms of output, contribution to GDP, exports and the number of big firms in the industry.[28] Statistics NZ surveys of the ICT, biotechnology and screen industries show that overall employment levels in these sectors have remained constant. Real levels of GDP output have increased modestly, but levels have not reached the goals initially set by the government.[29] However, there is evidence that shows signs of improvement in some areas, such as biotechnology exports.[30] Below is a sample of data which gives some indication of industry policy results. Improvements in employment levels and other data generally appear to be modest or insignificant.
Overall revenue and employment in the screen industry has been constant.
One common measure of innovation and growth in the biotechnology sector is the number of US patents granted per annum, which shows significant improvement. Gross profits have also improved:
ICT output has increased, although it remains unclear whether New Zealand’s relative OECD position has changed.
There has been a significant increase in the total employment in forestry and wood-processing.
Macroeconomic data shows that New Zealand’s economic performance since 1999 has not been significantly better than other OECD countries, except with respect to unemployment and economic growth. Those two statistics should be seen as a reflection of New Zealand’s point in the trade cycle and no conclusion that it reflects an improvement in long-term economic prospects can be drawn.
I will access statistics available from the OECD, Statistics NZ, international studies of ‘innovation’ and ‘labour productivity’ and research from peak industry organisations. Annual government budgets and Treasury data will also be invaluable; for example, detailed GST income reports provide proximate measures of growth across industries. The taskforces also commissioned annual industry surveys, labour force surveys and reports on grants and funding delivered.
I am continuing to build a collection
of data to support the thesis.
The level of
taxes in New Zealand as a proportion of GDP was slightly below the OECD average
in 2005 (34.9% compared to 36.3%). Its level of social expenditure as a
proportion of GDP was also slightly below the average (18.5% compared to
20.8%). Although New Zealand is categorized as a liberal country by comparative
political economy studies, paradoxically, the level of state expenditure has
continued to grow slightly over recent decades, as in most other countries.
This calls into question the hypothesis that the state has been “hollowed out”.
The privatization of some government services and corporations could suggest
the opposite conclusion. However, the continued growing level of government
revenue also suggests that the state has increased its potential ability to
develop new state projects.
RESEARCH
PUZZLE
As statist literature shows, it
is technically possible for governments to improve national economic
performance by pursuing industry policy programs.[31] Commonly cited industry policy successes include
Japan, Germany, Taiwan, Korea, Sweden and Singapore. New Zealand’s biotechnology strategy was also
relatively more successful than industry policies in the other GIF
sectors. Therefore the research puzzle
is: why are some industry policies (ICT,
creative industries, food & beverage) less successful than others
(biotechnology)?
Too often, policy failures are blamed on either the
absence of “political will” or incompetent political leadership.[32] However, these explanations are simplistic
and misjudge the practical political and economic realities faced by
governments. Liberals and Marxists argue
that the failure of anti-laissez faire policies is inevitable. However, my
thesis will study the reasons why interventionist economic policy is sometimes
successful but sometimes less so, without resorting to explanations which argue
that failures are inevitable. I will
therefore contribute to a gap in academic research.
It is not appropriate for a research
question to pre-empt an evaluation of the data, for example by asking why
industry policies have ‘failed’. I
prefer to remain open minded and imply open-mindedness in the research
question.
It could be suggested that a
significant proportion of attempted policies will inevitably fail. However, industry policies do not inevitably fail. It is therefore reasonable for me to inquire
about possible answers as to why certain policies were successful and others
were less so.
As I have said above, the intention of
the thesis is not primarily to discover whether the policies were
successful. The thesis aims to diagnose
relative weaknesses and strengths in the policies and in how they were
implemented. It is a critique of the
policies, not a study which attempts to find out if New Zealand performed
better than Australia, or elsewhere.
I have taken these matters into
consideration when framing the research question.
LITERATURE ON INDUSTRY POLICY
I give details
of the literature on industry policy to be relied upon in the thesis in various
sections of this paper, especially in the below section on method which
explains how I develop a hypothesis from the literature and then aim to test
it.
The principal
intellectual influence on the thesis is statist theory, especially the authors
Linda Weiss, Peter Katzenstein and Chalmers Johnson (see bibliography). However, this body of theory could be
enriched with more theoretical, analytical development.
Statist
literature has well developed theories on the types of interventionist industry
policies that successful countries have employed. The literature explains exactly what
government policies have achieved and how.
For example, Weiss (1998) explains how Japanese policies helped Japanese
firms expand internationally. Although
it is somewhat implicit in Weiss’s work and in statist theory generally,
Marxist theory more explicitly explains in a theoretical framework why
businesses face falling profits over time and therefore need to expand to find
new markets (including new international markets).
Statist
literature, such as Johnson (1982), shows how governments can help manage the
risks faced by business when investing in new industries. However, it is Marxism and theorists such as
Schumpeter and Jessop (2002) that / who elaborate a more detailed theory of why
investment, especially in new industries, can be inherently risky. Incorporating this theory will enable me to
understand theoretically, what exactly the goals of industry policy should
be. For example, Jessop argues that
investments in new industries often require long-term and extremely big
investments, added to uncertainty about the long term returns. Although statism details how governments have
implemented policies to subsidise investment, it does not seek to evaluate how
well government policies correct the specific theoretical problems identified
with risky investments. In fairness,
this is because statist theory studies policy successes. It does not turn its attention to explaining
how government policies fail to correct theoretically-identified inherent
problems with investing in industry (especially new industry). A statist-inspired PhD thesis which
incorporated such as analysis could be valuable.[33]
This gap, which
should be better filled, is evident in another topic, which is much more
complex. Marxist (to an extent) and
theorists from a variety of other traditions who study aspects of economic
globalisation, have argued that contemporary governments are forced to pursue
neoliberal policies. Weiss’s
antithetical The Myth of the Powerless
State (2002) aims to disprove this argument. Although Weiss gives evidence that this is
not the case, a more thorough engagement with the theory is desirable. For example, post-Keynesian theory explains
cyclical aspects of economies and thus puts the ‘globalisation’ period of the
1980s and 90s into theoretical economic context. Post-Keynesians also elaborate an analytical
theory to explain the errors in ‘globalisation’ theory and how the government
can intervene in the capital formation (investment) process to support economic
growth. A statist-inspired PhD thesis
which incorporated such as analysis could be valuable.[34]
Statism also has
underestimated inherent or institutionalised political opposition from the
business community to government interventionism. However, Weiss addresses this in detail and
has formulated a theory of ‘Governed Interdependence’, a theory which aims to
provide a process for managing conflictual relationships between business and
government. Weiss acknowledges the
difficulties governments will often have in implementing interventionist
policies. However, she does not
countenance how governments in more liberal democratic contexts might have to
proceed. Beyond a focus on processes
only, my thesis will explain how policies themselves can be altered so that
they are less opposed by the business community. My thesis will also investigate
government-business relations in a liberal democratic context where business
(and liberal economic traditions) are more dominant.[35]
As I state
below, statism also argues that to implement successful industry policies
requires skilled bureaucrats. I agree
with the approach and arguments of statism in this respect. However, I would like to add a new dimension
to this analysis. I will show how bureaucrats with only prior experience in
developing liberal policies , and in a liberal democratic context, seem to have
difficulty translating executive intentions for interventionist industry policy
into specific policies. Bureaucrats in
New Zealand still reached for liberal policies to solve common economic
problems. Also, as in the article from
Mintrom and Wanna referred to above, they did not have an adequate
understanding of industry policy, or at least a different understanding to
Minister Anderton.[36]
PREVIOUS INDUSTRY POLICY LITERATURE AND METHOD
Interestingly, the literature about the
possibilities and barriers to state capacity develops hypotheses but has so far
rarely tested them. The Marxist literature is mostly theorising, often
reflecting on past historical events or attempting to explain political and
economic phenomena. The institutionalist and statist literature is mostly exploratory
and describes how the state has sometimes played a positive interventionist
role in developing economies and specific industries.
Academic
studies of industry policies in liberal countries, such as some of the
literature I have read on the industry policies of the Hawke / Keating and
Howard governments in Australia, too readily reflect a centre-right
(neoliberal) or centre-left (eg. third way) ideological bias. Policies of this nature (especially industry
‘subsidies and tax breaks, but also funded training programs or grants) do not
represent a significant departure from neoliberal policies.
The reader suggested that I study
Australia’s industry policies. However,
Australian policies are fundamentally liberal in key ways in my opinion. There is no comparison between these policies
and the more interventionist policies I am studying from NZ. With respect, my object of study is for me to
decide, based on my own ideological worldview, and from the theoretical
traditions which I use to support the thesis.
I have chosen, instead, to compare
the policies attempted in the four different sectors. This comparison itself reveals that the
biotechnology policies and their implementation were superior to the other
sectors, even though they occurred in the same NZ economic context.
The thesis aims to evaluate how successfully the Clark government
implemented its decision to pursue an interventionist microeconomic industry
policy. The government’s most prominent
policy agenda was encompassed in the Growth and Innovation Framework
(GIF). The GIF program was structured
around four taskforces, which each proposed concrete, examinable
recommendations. The Biotechnology
taskforce report proposed 28 policy ‘actions’;
the ICT taskforce report made 18 policy recommendations; the Creative industries taskforce produced
the Better by Design report which proposed 15 ‘initiatives’ and the screen
industry report which made 36 recommendations;
and the Food & Beverage taskforce report sought to implement 12
‘action points’. There is therefore a
total of 109 policy recommendations arising from the process which can be
evaluated for suitability and by how the government sought to implement them.
The 28 actions proposed by the biotechnology taskforce report were more
apt than those of the other taskforce reports for the desired goal of
developing (growing) the respective industry.
Substantiate this xxxx. A more
comprehensive effort to implement the actions via enthusiastic support from
scientists also pushed the policies effectually towards realisation.
The method of
hypothesis testing which has been chosen will provide a thorough investigation
of these recommendations and therefore the Clark Government’s most prominent
industry policies, the reasons for their relative successes and failures, and
contribute towards a more realistic understanding of the possibilities and
barriers to be faced when governments in traditionally liberal economic polities
attempt interventionist economic policies.
There are four occasionally implied (but not often explicitly
researched) reasons why industry policy might not be successfully implemented,
and I will now turn my mind to these.
Statism[37]
has documented industry policy successes in East Asia and Europe. This demonstrates that industry policy
success is technically possible, even success is not always realised. New
Zealand’s policies can be compared against these theoretically ‘ideal’
policies, especially those from Japan and East Asia. I will critically analyse policy
documentation, reviews and strategies to do this.
In Japan and East
Asia governments organised heavy investment in high-growth industries with
strong relationships between the industry, government and banks. Policies encouraged private investment in
productive rather than speculative activities and encouraged managers to pursue
technological upgrading rather than cost-cutting strategies. Governments promoted specialist investment
banks, had restructuring strategies for upgrading sectors in long-term decline
and R & D strategies for developing new technologies.
Wiess[38] has also identified
a range of further broad principles which characterise successful industry
policy. Governments need to help
socialise risk by raising capital, by assisting with the development of new technologies, finding new
markets and training skilled labour. It
is also important to build positive cooperative partnerships with industry,
public-private cooperation needs to be institutionalised, industry needs to be
organised, and there should be proper consultation with industry in developing
policies.
Some
Marxist-inspired theorists,[39]
commenting on long-term structural industry change, suggest that business faces
certain long-term problems in free-market economies. Therefore, governments should ensure policies
address these issues, including helping business expand into new markets, managing
the trade cycle and helping business to overcoming barriers to new
investment. (Of course, I should note
that Marxists themselves do not make this point, as Marxism denies that
government policies can correct the problems faced by business.) Government should also subsidise and insure
against investment risks, particularly in relation to investment in high-growth
and emerging industries.
*
Hypothesis
one: New Zealand’s industry policies did
not have the characteristics integral to previous industry policy successes in
other countries.
Various agencies produced detailed
policy documents and strategies which will form the main source of data for
testing this hypothesis (see Appendix).
Economic
growth in specific industries is also affected by broader economic realities
including world growth levels and fluctuations in the economic cycle. Therefore, in order to understand the data it
is important to look beyond the headline growth statistics. The pressing task at hand is to draw a comparative picture of New Zealand’s
overall economic performance. This will
establish the performance of the target industries in a comparative and
historical economic context.
Post-Keynesians[40]
advocate macroeconomic policy intervention into the levels of private
investment to minimise macroeconomic fluctuations. A comparative analysis and post-Keynesian
theory will contribute to the overall critique of New Zealand’s industry
policies (and expose any industry successes that are not a direct consequence
of government policy but merely reflect changes in the economic cycle). I have already discussed the economic data sources
relevant to this hypothesis above.
*
Hypothesis
Two: The apparent failure or success of
New Zealand’s industry policies is affected by the fluctuations of the economic
cycle. Therefore, the failure of
industries to develop may be a failure (or absence) of counter-cyclical
macroeconomic policies (not industry policies).
Critical theory argues that
government policy reflects the interests of capital. I will analyse New Zealand’s industry policy
from three commonly cited perspectives.[41]
The first is whether policies reflect what
the business community itself says it wants.
My own basic survey of politicking and lobbying reveals that peak
business organisations have continually pressured for six main objectives since
1999: lower taxes, less regulation, flexible
industrial relations laws, energy security, better transport and ICT
infrastructure and addressing skills shortages.
The second perspective is based upon the Marxist understanding of what
business theoretically should want, or historically has wanted. Here the policy interests of capital are
hierarchical control of the production process, protection of the rights of
private property, profitability as the criteria for investment and the market
allocation of resources. Thirdly, does
policy maintain the profitability of capital, even if policy sometimes is
against the interests of capital? (In other words, is business more or less
profitable in New Zealand than elsewhere?)
*
Hypothesis
Three: The business community and
liberal political actors influenced New Zealand government policy and vetoed or
compromised industry policies.
To test this
hypothesis I will additionally rely on government reviews, media statements
and newspapers, government fact sheets, government web sites, documents
produced by non-government agencies such as Business NZ, NZBio, FilmNZ and so
on (policy submissions, media releases, organizational reports), these
organisation’s web sites and National party policy responses. I also intend to undertake further interviews
later in 2009.
The
final question that remains is whether it is possible for a country to
successfully change from a liberal economic policy path to a more active policy
path, or whether a country’s traditions, history and norms make it dependent
upon one particular path. It may be too
hard to overcome liberal traditions or norms in only a few years, as is
theorised by path dependency theory.[42]
Statist
theory argues that governments must develop their organisational capacities
over time if industry policy is to be successful.[43] This is especially the case if institutional
structures have been ‘hollowed out’,[44] as was the case
in New Zealand.
Weiss
focuses her analysis on the importance of particular institutions, the nature
of the relationships between government and industry, and how institutions have
been able to adapt particular organisational arrangements that have allowed a
coordinated approach to change.
There
needs to be bureaucratic competence and a commitment from the bureaucracy to
overall objectives, a strong capacity for information-gathering and the
appointment of key agencies given the task of industrial change. Initial interviews conducted by me with
policy advisors suggest that the implementation of industry policies were
considered less urgent than implementing macroeconomic policies. It is also unrealistic to expect in New
Zealand’s liberal-democratic context that policy agencies across government
will automatically have a sufficient understanding of industry policy to be
able to lead institutions in this direction.
The New Zealand bureaucracy certainly does not have the culture of industry
policy or interventionism that has existed in Japan. Senior bureaucrats in New Zealand had only
previous personal experience of policies aimed towards economic liberalisation.
*
Hypothesis
Four: The potential success of New
Zealand’s industry policies was constrained by a lack of supporting
institutions and a suitably-skilled bureaucracy.
For this hypothesis I will examine the range
of supporting institutions developed by the Clark government (there are lots of
them and they are well documented). I
will follow the method of institutionalist analysis employed by Weiss. Initial interviews with policy advisors show
that there are lessons to be learned about how institutions should be designed.
I would like to comment on my choice
of four hypotheses, which may prima facie
give the impression that the project is too broad. However, I believe this is actually because I
have explained my intentions in significant and devoted much attention to
breaking the two main arguments of the thesis into its practical components, so
that the objects of study are stated for the reader explicitly and in
detail. In constructing the method of
the project, I could have elaborated only two hypotheses, namely, that policies
were flawed and that institutions were incapable of implementing them.
It is important that the thesis
understands both of these elements.
Despite common suggestions that research projects should focus on
institutions and relationships between policy actors, I believe this reflects
an different ideological standpoint to my own.
Hypotheses three and four attempt to understand the ‘process’ of
implementation of policies. In addition,
hypotheses one and two reflect the need to study the actual policies
themselves. J. R. Saul (1992) in Voltaire’s Bastards specifically warns
against studies that focus on policy processes and do not sufficiently focus on
the ‘substance’ of policies (‘process over substance’). My critical analysis of the substance of the
policies in hypotheses one and two, based upon statist and post-Keynesian
theory, will add value to a thesis which would otherwise, like some others,
focus on a typical study of ‘processes’, ‘actors’ and ‘relationships’. However, my ideological viewpoint precludes
another study of the ‘actors’. Analysing
the policies that were chosen is crucial to understanding the weaknesses in how
the government implemented its decision to have a targeted industry policy
strategy.
CONCLUSION
The 109 policy actions will be analysed to: (hypothesis one and two)
determine the inherent flaws in the policies chosen and whether different or
better recommendations could have been made;
(hypothesis three) understand the interaction between the government and
the business community in formulating and implementing them; and (hypothesis four) to understand how the
bureaucracy and agencies sought to implement (or not implement) each of these
recommendations, and the limitations in how the policies were implemented.
The thesis will aim to show how the biotechnology policies were
implemented better and hence more successful, despite being implemented in same
New Zealand political / economic context.
Most research which has studied
industry policies in liberal democratic contexts tends to be informed by
centre-left, neoliberal or liberal-democratic / ‘third way’ / ‘new labour’
ideological perspectives. These more
liberal versions of industry policies should be interrogated from a
developmentalist (statist), economic-interventionist perspective. Although it is clear that New Zealand’s
policies did represent a significant departure from liberal versions of
industry policies, they were influenced and limited by the liberal democratic
political environment and New Zealand traditions and bureaucratic limitations.
The thesis will attempt a criticism
of the policies themselves, the process of implementation and the relationships
between policy agencies. These three
factors are the critical elements identified by statist theory. The particular way that statist theory raises
these issues makes this thesis different from studies which aim to study
institutional arrangements only, or policy ‘actors’ and their political
manoeuvring (such as the reader might suggest).
The thesis will attempt to expand
statist theory in a direction it seldom attempts, namely, studying policies and
implementation in a liberal democratic context.
Key themes to be explored by the
thesis that are implied in this paper are, firstly, how institutional design and capability are
critical to successfully implementing industry policies. Is it possible to change policy direction
from neoliberal directions to industry policies? What specific problems can be identified from
the NZ experience? Secondly, how
important is it to get the actual policies
right, rather than just focusing on institutions and / or policy
processes? Thirdly, how did the politics
of policymaking bear upon the implementation of the policies and the
relationship between policy agencies and business?
The Clark government’s industry
policies have been successful so far as they created a range of important new
institutions which in the future may be capable of coordinating a successful
industry policy program. Across the
target industries data shows some successes (wood processing and biotechnology)
and some areas where policy has made no apparent difference (the screen
industry and the ‘design’ strategy).
Hopefully my interrogation of the specific policies attempted and the
agencies involved in implementing them will provide an explanation for this and
lessons for the future.
BIBLIOGRAPHY
The Alliance. 2000. Partnership
2000. To access contact www.alliance.org.nz
Mark Beeson. 2002. Reconfiguring East Asia: regional institutions and organisations after
the crisis. Routledge: London.
Biotechnology Taskforce. 2003. Growing the Biotechnology Sector in New
Zealand: a Framework for Action.
Available at www.nzte.govt.nz/section/11729.aspx
Paul Boreham, Geoff Dow &
Martin Leet. 1999. Room to
Manoeuvre: Political Aspects of
Unemployment. Melbourne University
Press: Melbourne.
Country Watch. 2007. New Zealand Review 2007: Political Overview.
Paul Dalziel & Ralph
Lattimore. 2006. The New
Zealand Macroeconomy. Oxford University Press: Melbourne.
Design Taskforce. 2003. Better By Design. Available at www.nzte.govt.nz/section/11729.aspx
Geoff Dow & George
Lafferty. 1998. Everlasting
Uncertainty: Interrogating the Communist
Manifest, 1848 – 1998. Pluto
Press: Sydney.
Geoff Dow. 1998. ‘Beyond
the Logic of Accumulation: Towards a
Marxist Concept of State Capacity’ in Geoff Dow & George Lafferty. 1998. Everlasting Uncertainty: Interrogating the Communist Manifest, 1848 –
1998. Pluto Press: Sydney.
Chris Eichbaum. 2006. ‘The Third Way’, in R. Miller
(ed), New Zealand
Government and Politics, 4th ed, Auckland: Oxford
University Press.
Food and Beverage Taskforce. 2006. Smart Food, Cool Beverage. Available at www.nzte.govt.nz/section/11729.aspx
Anthony Giddens. 2000. The Third Way and its Critics. Polity Press:
Cambridge.
2006 Tim Hazledine and John Quiggin, ‘No More Free Beer
Tomorrow? Economic policy and outcomes in Australia and New Zealand 1984-2003’
Australian Journal of Political Science, special issue: ‘Globalising the
Antipodes? Policy and Politics in Australia and New Zealand’, F.G. Castles, J.
Curtin and J. Vowles (eds), 41(2), June, pp145-160.
ICT Taskforce. 2003. Breaking Through the Barriers. Available at www.nzte.govt.nz/section/11729.aspx
Bob Jessop. 2002. The Future of the Capitalist State. Polity Press:
Cambridge.
Chalmers Johnson. 1982. MITI and the Japanese Miracle: The Growth of
Industrial Policy, 1925-1975.
Stanford University Press:
Chicago.
Peter Katzenstein. 1985. Small States in World Markets: Industrial Policy in Europe. Cornell University Press: New York.
Allison McClelland and St John, S. (2006) 'Social policy
responses to globalisation in Australia and New Zealand 1980-2003', Australian
Journal of Political Science, June.
Kerry McGovern
(2005). Governance reform of New Zealand's state sector
1984-1994 : a case study (PhD
Thesis). University of Queensland.
Ministry of Economic
Development. 2006. Securing
New Zealand’s Future Prosperity.
Available at www.med.govt.nz
Ministry of Economic
Development. 2005. The
Growth and Innovation Framework Sector Taskforces: Progress With Implementation. Available at www.med.govt.nz
Ministry of Economic
Development. 2003. The
Growth and Innovation Framework:
Benchmark Indicators Report.
Available at www.med.govt.nz
Ministry of Economic
Development. 2002. Cabinet
Overview Paper. Available at www.med.govt.nz
Ministry of Economic
Development. 2002. Growing
an Innovative New Zealand. Available
at www.med.govt.nz
Michael Mintrom and John
Wanna (2006) “Innovative State Strategies in the Antipodes: Enhancing the
Ability of Governments to Govern in the Global Context.” Australian
Jounral of Political Science (June).
New Zealand Government. 2007. Economic Development Indicators 2007. Available at www.med.govt.nz/indicators
New Zealand Government. 2006. Securing New Zealand’s Future Prosperity. Available at
http://www.med.govt.nz/upload/41503/cab-paper-1.pdf
New Zealand Government. 2002. Cabinet Overview Paper. Available at
http://www.med.govt.nz/templates/StandardSummary7223.aspx
New Zealand Trade and Enterprise
(NZTE). 2006. New
Zealand Biotechnology Industry Growth Report. Available at http://www.nzte.govt.nz/common/files/New
Zealandbio-growth-report.pdf
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OECD. 2008. OECD Factbook 2008. Available at www.sourceoecd.org
Jeffrey Pressman & Aaron
Wildavsky. 1984. Implementation: How great expectations in Washington are
dashed in Oakland, 3rd ed.
University of California Press:
Berkley.
Brian Roper. 2005. Prosperity for All? Economic, Social and Political Change in New
Zealand Since 1935. Thomson /
Dunmore Press: Victoria.
Chris Rudd & Brian Roper,
ed. 1997. The
Political Economy of New Zealand.
Oxford University Press New Zealand:
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John Ralston Saul. 2005. The Collapse of Globalism: and the Reinvention of the World. Atlantic Books: London.
John Ralston Saul. 1992. Voltaire’s Bastards: The Dictatorship of Reason in the West. Penguin:
London.
Science and Innovation Advisory
Council. 2003. Growing
an Innovative New Zealand: a Framework for Action. Available at http://executive.govt.nz/minister/clark/innovate/index.html
Screen Production Industry
Taskforce. 2003. Taking
on the World. Available at www.nzte.govt.nz/section/11729.aspx
Statistics NZ. 2008. Hot Off the Press: Gross Domestic Product September 2008 Quarter. Available at http://www.stats.govt.nz/NR/rdonlyres/D188FFA9-92E0-4DA0-9287-28DF17DB064E/0/productivitystatistics19782007hotp.pdf
Linda Weiss. 1998. The Myth of the Powerless State. Cornell University Press: New York.
APPENDIX: MAIN INDUSTRY POLICY DOCUMENTS
FOUNDATION DOCUMENTS
·
Growing
an Innovative New Zealand 2002
·
Turning
Great Ideas Into Great Ventures 2003
·
New Zealand
Talent Initiative 2001
·
Using FDI
to Help Fuel NEW ZEALAND's Economic Prosperity I
·
Using FDI
to Help Fuel NEW ZEALAND’s Economic Prosperity II
·
GIF Benchmark
Indicators Report 2003
·
GIF: Progress Report 2003
·
GIF:
Development Indicators 2005
·
Growth
Through Innovation: Progress to Date Feb
2005
·
GIF:
Progress With Implementation June 2005
GENERAL
DOCUMENTS
·
Initial Taskforce Reports:
Growing
the Biotechnology Sector in NEW ZEALAND - Biotechnology Taskforce Report 2003
New
Zealand Biotechnology Strategy 2003
Design
Taskforce Final Report 2003
Food
& Beverage Taskforce Report 2006
Food
& Beverage Taskforce Appendix 2006
A
Vision for World Leading NEW ZEALAND Manufacturers
Wood Processing
Strategy 2000
·
Cabinet Responses:
Cross-sectoral
Initiatives Cabinet Paper
Food &
Beverage Cabinet Response
Framework for Sector
Engagement Cabinet Paper
Manufacturing
Report Cabinet Response 2007
RESEARCH REPORTS & PRE-TASKFORCE STUFF
·
Review of
the NEW ZEALAND Biotechnology Sector
·
Building a
Case for Added Value Through Design 2003
·
Design
Taskforce Research Report 2002
·
Food
& Beverage Discussion Paper
·
Mapping the
structure of the NEW ZEALAND Food & Beverage Industry
·
Recommendations
to the NEW ZEALAND Food & Beverage Industry
·
Advisory board report 2003
·
Cabinet papers on manufacturing, exporting and
sector engagement 2003
·
MED economic strategy papers (general investment
programs and strategies)
·
GIF
Taskforces Terms of Reference
OTHER
·
Industry NZ – Review of the Biotech Sector
(2003)
·
Biotech taskforce recommendations
·
Biotech Implementation Update 2004
·
Right Hemisphere assistance agreement
·
Review of Government Support Measures for the
Screen Industry
·
Taskforce Recommendations Report
·
Food & Beverage
Sector Engagement Paper
·
Growth
and Innovation Advisory Board Research Summary 2004
[1]
Labour also needed the support of the Greens to govern.
[2]
See Roper (2005)
[3]
See Dalziel and Lattimore (2004), Eichbaum (2006), Roper (2005)
[4]
See Saul (2005)
[5]
It also had a progressive social policy agenda.
[6]
McGovern (2005)
[7]
For example Hazledine and Quiggin (2006)
[8]
For example McClelland and St. John (2006)
[9]
Eichbaum 2006, Dalziel 2006, Dalziel & Lattimore 2004, Roper 2005
[10]
See, for example, Saul 2005 and Roper 2005
[11]
See OECD Factbook 2009
[12]
Particularly the share market and financial markets.
[13]
See Katzenstein (1985), Johnson (1982)
[14]
Although this was not consistently the case for New Zealand.
[15]
See http://www.maf.govt.nz/forestry/
[16]
Immature timber, visible on the wharves, was being opportunistically exported
to capitalise on high short-term world prices.
[17]
I have personal reservations about how these sectors were chosen, as they were
potentially chosen arbitrarily. I have
two conflicting sources on this point.
[18]
See Cabinet Overview Paper
[19]
See GIF Taskforce Reports
[20]
See GIF Sector Taskforces: Progress With Implementation (2005)
[21]
See below details of what ‘ideal’ industry policies are.
[22]
This is measured in many economic surveys.
[23]
Ministry of Economic Development, Benchmark Indicators Report 2003, OECD in
Figures 2008, OECD
[24]
OECD in Figures 2008, OECD
[25]
Data available at www.hdr.undp.org
[26]
Post-Keynesian theorists (such as Joan Robinson) argue that ‘automatic
stabilisers’ (implying long-term high levels of government spending) and ‘a
comprehensive socialisation of investment’ are vital to maximising long term
economic performance, and that the latter is vital to implementing effective
industry policies.
[27]
See Benchmark Indicators Report 2003
[28]
The government commissioned the Ernst & Young review in 2002 to determine
whether these goals were realistic. The
goals were nonetheless set arbitrarily.
[29]
See Biotechnology, ICT and Screen surveys 2007 available at www.stats.govt.nz
[30]
New Zealand Trade and Enterprise (2006)
[31]
See Katzenstein (1985), Weiss (1998), Johnson (1982), Boreham Dow & Leet
(1999)
[32]
See, for example, Saul (1992)
[33]
I aim to achieve this in hypothesis one.
[34]
I aim to achieve this in hypothesis two.
[35]
I will try to achieve this in hypothesis three.
[36]
I will investigate this problem in hypothesis four.
[37]
Theorists include Weiss, Katzenstein, Johnson, Boyer and Evans.
[38]
See Weiss (1998)
[39]
See Dow (1998), Jessop (2002)
[40]
For example Joan Robinson
[41]
I will not go into exhausting detail in this section due to space constraints.
[42]
See, for example, Beeson (2002)
[43]
Weiss (1998)
[44]
See, for example, Pressman & Wildavsky (1984)