Australia's Economic Miracle
By Arnold Kling
Peter Gallagher links to a speech by Gary Banks, Chairman of Australia’s Productivity Commission, on that country’s high productivity growth of the past several years. He credits improvements in policy.
As you know, the reforms really began with the lowering of barriers to foreign competition in goods and financial markets in the 1980s. As tariff reform and takeover pressure began to bite, managers began to devote more attention to improving the performance of their business…
Reforming anti-competitive policy is generally a lot harder than implementing it. For one thing, producer interests (including employees) become rather attached to it and they fight hard to retain what they perceive as their entitlements. The story of economic liberalisation in Australia thus has as much to do with politics and institutions as with economics. That said, the economics profession in Australia has played an important role both in identifying necessary reforms and demonstrating the likely payoffs, and in selling reform to governments and the wider community.
For Discussion. Banks is saying that industries always ask for tariff protection, but in fact they are helped more by competitive pressure. Are there any counter-examples, of industries that were given protection but were able to increase productivity to return to the point where they were competitive internationally?