Prosperity Or The Quiet, Regulated Life ?
The choice: prosperity or the quiet, regulated life?
The New Zealand economy is regularly ranked as one of the freest. Economic freedom normally goes hand in hand with high economic growth and social optimism. Yet, sustained fast growth has eluded New Zealanders: living standards during the 1990s rose by 1.3% pa., a miserly performance by Asia-Pacific standards.
Professor Wolfgang Kasper, Senior Fellow at the Sydney-based Centre for Independent Studies (CIS) and an expert on Asian economic growth, was invited to address this apparent puzzle in a keynote speech to this week’s Annual Conference of the NZ Association of Economists in Wellington (Thursday, June 27, 2002).
He argues for the need for comprehensive reforms, not just of the economic rules of the game, but also the social norms that foster individual competition and self-reliance. Sustained economic dynamism requires a thorough overhaul of New Zealand’s old-fashioned socialised welfare and the rather heavy burden of government. Reforms also require credible political guarantees that they will stay in place. At times, the judiciary might proceed with somewhat more economic literacy.
‘There have been several flip-flops in fundamental rules, for example with the deregulation and re-regulation of labour markets’, Professor Kasper writes.
‘New Zealand’s political constitution lacks the usual stabilisers – such as a written constitution, a pronounced division of powers, a multi-cameral parliament, or federalism. Such devices normally protect the people from the whims of small and unstable parliamentary minorities; MMP has made the political system even less predictable.’
According to Kasper, you cannot have both world-class growth and unpredictable economic institutions. But he also stresses that the choice is for New Zealanders alone to make. Continuing slow growth over the medium-term future is, after all, not a tragedy– and the quiet, regulated life is possibly preferred by most.
Copies of the address are available on request or from the CIS website: www.cis.org.au from June 27, 2002.
Professor Kasper can be contacted prior to the lecture on +61 2 9438 4377, at CIS in Sydney.
On the 26 and 27 June, he can be contacted in Wellington through the switchboard of the James Cook Hotel: 04 499 9500.