Category Archives: Globalisation & Trade

The Sectoral Approach to Economic Growth

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Third draft of Chapter 4 of Transforminng New Zealand. Comments welcome. (Second Draft).

Keywords: Growth & Innovation;

It is unwise to focus – as the last chapter had to – on the aggregate economy. Being excessively aggregate means that some of the most important features of the economic transformation are ignored. The growth and change occurs in businesses, and so we need to think about how businesses grow. Economists have a theory of how businesses behave, which informs their thinking. But at the policy level they need to avoid detailed intervention at the firm level.

Transforming New Zealand

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Draft chapters for a book. Readers are invited to comment on these drafts. Not all chapters are complete. A summary of the main economic themes is in Tractatus Developmentalis Economica.

Keywords: Globalisation & Trade; Growth & Innovation;

Prologue Not written

These draft chapters are on the web
1. The Point of it All.
2. New Zealand’s Post-war Economic Performance
3. Theories of Economic Growth.
4. The Sectoral Approach to Economic Growth
5. Exporting and Growth
6. Competitive Advantage
7. Infrastructure
8. Intervention and Innovation
9. Working with Technological Innovation

These chapters are in preliminary development and may change dramatically.
10. Is Small Beautiful?
10. It’s Not Easy Being Small
12. Taxation and Spending
13. Distributing the Gains
14. The Quality of Life

Appendices On website
A.1. The GDP Target.
A.2. The Maddison-OECD Data Base.

Competitive Advantage

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Chapter of TRANSFORMING NEW ZEALAND. This is a draft. Comments welcome.

Keywords: Globalisation & Trade;

Michael Porter’s theory of competitive advantage emphasises that ‘firms, not nations, compete in international markets’ even though it recognises that nations have a role in fostering successful businesses (p.33). Thus the focus on exporting has to be on the businesses involved.

Exporting and Growth

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Chapter of TRANSFORMING NEW ZEALAND. This is a draft. Comments welcome.

Keywords: Growth & Innovation; Globalisation & Trade;

The export sectors have a key role in the growth of a small open multi-sectoral economy. They can expand faster than the world economy as a whole, and drag the domestic economy along with them, accelerating its growth rate. However there are different sorts of exports, not all of which can be accelerated.

A Research Proposal: Globalisation

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The following is extracts from a research proposal: May 2003. It was awarded a Marsden award and will be the focus of my public interest research over the next three years.

Keywords: Globalisation & Trade;

SUMMARY
Describe in up to 200 words the nature of your proposed research in plain English for a general audience. This summary should be able to be used for publicity purposes if the proposal is offered funding.

Globalisation has shaped the world economy for the last two centuries. It also has shaped New Zealand, as for instance when refrigeration, together with steam ships and telegraph, led to a New Zealand economy based on pastoral farming selling to Britain. While there was a period of stagnation in the globalisation process in the middle of the twentieth century, innovations such as containerisation and mass air travel revitalised the globalisation pressures after the Second World War. More recently, the information and communication technology revolution has transformed access to information and simplified international contacts. Among the consequences of these changes have been an acceleration of globalisation with less restricted trade in more goods and services, foreign investment and capital flows, the potentiality for substantial human migration (as well as the huge tourist industry), a revolution in information access, and the growth of institutions such as the IMF and the WTO which attempt to regulate international economic activity. Local cultures and the nation state are being transformed. This project will trace these impacts on New Zealand in the past, and today, looking forward to the way globalisation will impact on the future, while contributing to international scholarship on the economics of globalisation.

New World Disorder: Where Is the World Economy Going After Iraq?

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Listener: 19 April, 2003.

Keywords: Globalisation & Trade; Macroeconomics & Money;

We see only vaguely the world order which will follow the flames of Iraq. The whole episode has confirmed the American (Hard) Right’s suspicions of the old order, based on alliances and multilateral institutions, which Franklin Delano Roosevelt and Harry Truman (and, indeed Peter Fraser) contributed to creating after the Second World War. They argue the case for, what amounts to, an American imperium – a world empire over which it wields unqualified power. With President Bush they have an administration which could pursue such a unilateralist goal, with profound international political and military implications. But as this is only a short economics column, the focus is on the economic and financial ones.

Iraq, Oil and the US Dollar

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Note in response to questions arising from the ‘Disorder Afterwards’ Listener Column of 19 April, 2003

Keywords: Globalisation & Trade; Macroeconomics & Money;

In the past few weeks I have been asked by a number of people about published opinions that argue the US is invading Iraq in order to get access to its oil, and to strengthen the role of the US dollar, it being noted that a few years ago Iraq decided to settle its oil deals would be transacted in euros.

The Marsden ‘globalisation and New Zealand’ Project (revised)

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Revised Version of paper for ‘New Zealand’s Role in World Affairs’ VUW, 5 December, 2003. Published in New Zealand in a Globalising World ed. R. Petman, VUP, 2005.

Keywords: Globalisation & Trade;

In late 2003 I was awarded a three year Marsden Grant to study globalisation and New Zealand’s role in it. This paper sketches the research program, which is primarily driven from an economist’s perspective, but also poses some of the international relations issues.

After Uncle Sam

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Listener 15 March, 2003.
This was a response to an invitation to envisage a world in which the United States was not as dominant economically.

Keywords: Globalisation & Trade;

The most likely scenario for a major and early demise of American financial and economic hegemony would be that the financial fundamentals of the private sector are already ruined, and that Bush’s tax cuts creates a government deficit which is as damaging to the public sector. This would be reinforced by the depleting resource base – especially for oil and water – which, coupled with an extraordinary vigour and optimism, has been the foundation of US economic development.

Abstract Of Research Proposal for Marsden Fund Application 14 February, 2003.

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Diminishing Distance: New Zealand in a Globalising World

Keywords: Globalisation & Trade;

Globalisation is the greatest challenge that economies and nations in the world economy face today. It impacts on where people can work and live, what jobs are available, where investment occurs, and the ability of the nation state to control its destiny – the very foundations of nationhood. It generates both prosperity and disruption, with an uneven impact. Globalisation is not new. It was as significant – some argue moreso – in the nineteenth century international economy. New Zealand is a response to that globalisation, and its destiny is intimately tied in with future globalisation.

The Washington Consensus: When Facts Get in the Way Of Economic Orthodoxies

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Listener 8 February, 2003.

Keywords: Globalisation & Trade; Growth & Innovation; Macroeconomics & Money;

Overseas economists visit New Zealand regularly, seeing politicians, officials, business people, and even independent commentators. One, late last year, began his session with me, by saying that New Zealand’s economic relativity in the OECD had deteriorated throughout the last half century. The government wanted to accelerate our economic growth, he said ,but since coming to office it had
– delayed unilateral tariff cuts;
– raised income tax rates;
– ruled out further privatisation;
– toughened regulation;
– introduced a more active industrial policy ;
– re-regulated the labour market.
He concluded that he did not see a single policy change which would contribute to increasing economic growth.

Economic Globalisation and National Sovereignty (II)

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Chapter for the New Zealand Government and Politics 2ed, edited by Raymond Miller (OUP). First Edition Chapter

Keywords: Globalisation & Trade; Governance; Political Economy & History;

In recent years there has been increasing concern that the phenomenon of supranational economic integration, popularly known as economic ‘globalisation’, is undermining the sovereignty of the nation state. In New Zealand, this has been symbolised by international agencies such as the International Monetary Fund (IMF), World Bank, and World Trade Organisation (WTO). This chapter will explore the economic context of the debate.

Different Kinds Of Countries and Cities: The Distances Between Them.

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Cultures of the Commonwealth The Urban and the Rural No 9, spring 2003, p.25-35.(1)

Keywords: Globalisation & Trade; Literature and Culture;

Geoffrey Blainey titled his seminal history of Australia The Tyranny of Distance, arguing that

In understanding Australia’s history, the idea of distance may be as revealing as say Frederick Jackson Turner’s ‘frontier theory’ is in probing the history of the United States. Distance – or its enemy, efficient transport – is not simply an explanation for much that happened in Australia’s history. Once the problem of distance is understood it also becomes difficult to accept many of the prevailing interpretations of other events in Australia’s history. Distance itself may not explain why they happened, but it forces a search for new applications.(2)

He could have said the same for New Zealand. For if external distance tyrannised Australia, New Zealand was more distant – even from Australia. (The physical distance from Canberra to Wellington is roughly the same as from London to Moscow.)

Globalisation and the Labour Market

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Paper for the 2002 Labour Employment and Work Conference. 21 November, 2002. (1)

Keywords: Globalisation & Trade; Labour Studies;

It is argued that globalisation was a far more potent force in the nineteenth century, than it has been in the late twentieth, for then labour was highly mobile as well as capital and goods – although it was really only European labour which was mobile. Moreover, aside from initiative, the labour which migrated probably had similar characteristics to those which stayed behind.(2)

Economic Reforms: Index

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History
Sequencing (December 1983)
Freeze and Thaw
 (July 1984)
Ssh …It’s the Big ‘‘D’’ (August 1984)
Confidentially Yours (August 1984)
Devaluation!: Five Turbulent Days in 1984 and Then … (July 1985)

Economic Liberalisation: Where Do People Fit In?
 (May 1987)

From Run to Float: the Making of the Rogernomics Exchange Rate Policy (September 1989)
Liberalization Sequencing: The New Zealand Case (December 1989)

Towards A Political Economy of New Zealand: the Tectonics of History (October 1994)
The Wild Bunch?: An Inquiry is Needed to Restore Treasury’s Integrity (August 1996)
The Great Diversification: Ch 9 of Globalization and a Welfare State (December 1997)
The State Steps In: Michael Bassett Makes A Case for Intervention. (August 1999)
Remaking New Zealand and Australian Economic Policy by Shaun Goldfinch (August 2001)
The Treasury and the Nationbuilding State (December 2001)

Evaluation
New Zealand’s Economic Performance This is an Index
Economic and Other Ideas Behind the New Zealand Reforms
 (October 1994)
For Whom the Deal Tolls (Of Dogma and Dealers) (August 1996)
The Economic Impact of the Employment Contracts Act (October 1997)
Microeconomic Reform: The New Zealand Experience (February 1998)
Some Macroeconomics of the Employment Contracts Act (November 1998)
View From Abroad: What Do We Know about Economic Growth? (May 1999)
The Model Economist: Bryan Philpott (1921-2000) (August 2000)
Comparison with Australia: New Zealand’s Post-war Economic Growth Performance (August 2002)

The Debate
Waist Deep in the Big Muddy? (February 1991)
Friends in High Places: Rogernomic Policies Have Powerful Allies in Australia (April 1994)
Systemic Failure (December 1995)
Ignoring the Critics (February 1997)
A Permanent Revolution? (March 1997)
In the Dark: The State of Research Into the Economy is An Embarrassment (June 1997)
The New Zealand Experiment: A Model for World Structural Adjustment? (Review) (July 1997)
Out of Tune: Even the Officials Admit the Health Reforms Were Fatally Flawed. (December 1997)
Money for Jams: the Government Response to Roading Reforms is Commercialisation. (January 1998)
Reforms, Risks, and Rogernomics (March 1999)
The London Economist and the New Zealand Economy (December 2000)
Locked Out: of Free Press and Free Economics (May 2001)
A Surplus of Imitation (June 2001)
Government Spending and Growth Rates: A Methodological Debate (January-May 2002)
From Pavlova Paradise Revisited by Austin Mitchell (July 2002)
Manure and the Modern Economy: Has Economic Policy Hardly Changed? (September 2002)
From is This As Good As it Gets? (December 2002)
1999 and All That (January 2004)

Books
The Commercialisation of New Zealand (1997)
In Stormy Seas: the Post-war New Zealand Economy (Chapters 15-16) (1997)
The Whimpering of the State: Policy After MMP (1999)

The Bubble Bursts

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Will the Recession Be So Severe That it Will Count As the ‘Millennium Depression’?
Listener 2 November, 2002.

Keywords: Globalisation & Trade; Growth & Innovation; Macroeconomics & Money;

There was increasing pessimism about the state of the world economy among the international economic commentators I admire. Those who are paid to talk up the financial markets continue to predict optimistically – so far, four of the last zero economic upturns.

Rhetoric and Iraq: Arab Brothers and Oil Sisters.

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Listener 19 October 2002.

Keywords: Globalisation & Trade; Political Economy & History;

It is easy to argue that US policy on Iraq is driven by its oil interests, especially since its president is from a Texan oil family who has surrounded himself with Texan oilmen. Thus the clever email about how the ‘Seven Sisters’ – the world’s great oil companies – are determining US policy which accompanies this column. If only it were so simple.

Jane Kelsey at the Crossroads: Three Essays

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(Wellington, Bridget Williams Books, 2002), ISBN 1877 242918; $34.95

Review for AUS Electronic Newsletter

Keywords: Globalisation & Trade; Political Economy & History

Students and the general public have found invaluable the sequence of books Jane Kelsey has produced on contemporary New Zealand society and governance, beginning with a study of how the Labour Government dealt with Treaty issues, working through the New Zealand experiment and now a couple on New Zealand in a globalised world, the latest of which is three essays in At the Crossroads (although, curiously, the cover shows a signpost at Bluff, the end of the country). Reviews of her books usually go to the extremes of the paean or condemnation. ….

Towards an Analytic Framework for Studying Globalisation

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Versions of this paper were presented to seminars of the Ministries of Economic Development and Foreign Affairs and Trade in May and June 2002.(1)

Keywords

The original invitation for this paper involved my setting out my work on globalisation, for which I had applied for a Marsden research grant. Alas, the applications which went into the second round do not include my one. Perhaps there are 137 more significant issues than globalisation facing New Zealand – which is scary. Even so globalisation is important to New Zealand’s future, to its very survival. This paper argues that not only is the issue important, but that research can progress our understanding of it. Such research should not be focussed on policy issues, but attempt to develop an intellectual framework, which policy makers will find useful. By eschewing policy conclusions it can go deeper, more analytic, and ultimately be of greater value.

Keep the Aussie Dollar at Bay

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New Zealand Herald 07.05.2002

Keywords: Globalisation & Trade; Macroeconomics & Money

Should New Zealand form a currency union with Australia, just as until recently Argentina did with the United States dollar? A fixed exchange rate between two markets is clearly advantageous to the exporter, whose one ambition is to sell to Australia. But more than 80 per cent of exporters and 90 per cent of the economy have other ambitions.