اصلاحات اقتصادی و رشد بهره وری: مورد استرالیا و نیوزیلند

The purpose of this paper is to study relative developments in total factor productivity (TFP) growth between the Australian and New Zealand traded goods sectors during the 1975–1998 period. Particular attention is paid to the effect of the mid-1980s economic reforms on overall productivity and efficiency change (ECH). We use an approach that decomposes TFP growth into an ECH and a technical change component. This decomposition provides extra insight on assessing relative productivity developments. Our results indicate that the New Zealand primary sector exhibits a remarkable improvement in TFP growth during the post-reform period. This improvement in productivity is driven predominantly by efficiency rather than technical change. There are no significant productivity changes in the Australian primary sector, nor the manufacturing sectors of the two countries as a result of the reforms. In fact, the productivity gains in the New Zealand manufacturing recorded in the initial stage of the post-reform period appear to have been eroded in the 1990s.

Since the mid-1980s a wide range of radical economic policies have been adopted by successive governments in Australia and New Zealand with the primary objective of modernising their economies, enhancing competition and improving productivity. The magnitude and speed of these economic changes have varied between the two countries. New Zealand has carried out a far more comprehensive and speedier programme of economic reform compared to Australia. This in part reflects the increasing difficulties the New Zealand economy was facing at the time the reforms were first enacted. In the period 1960–1984, the New Zealand economy had one of the lowest rates of real economic growth in the OECD. On the other hand, Australia managed to achieve a rate slightly above the OECD average. In the decade prior to 1984, the New Zealand economy’s average per capita real growth rate was almost nil. The current account had reached record deficit levels, external public debt was rising rapidly without contributing to significant productive investment growth, unemployment was slowly but constantly rising and inflation was high for most of this period. Smith and Grimes [14] have attributed the economy’s dismal growth rate to weak total factor productivity (TFP) performance over this period. This is consistent with international evidence showing that macroeconomic instability reduces growth by reducing investment and TFP growth [8] and [9]. TFP growth in the New Zealand business sector at 0.8% (1963–1973) and at −2% (1974–1979) was the lowest in the OECD [3]. In view of the pressing problems facing the New Zealand economy, it was apparent that firm, prompt and decisive action was necessary. The 1984 economic reform programme was based on a medium rather than short term objective of achieving external and internal macroeconomic stability and microeconomic efficiency. It represents, perhaps, the most radical and comprehensive liberal reform programme ever implemented in the OECD. The deregulation of the money market, the lifting of controls on capital movements, the floating of the exchange rate along with a reduction in border protection and the restructuring of the public sector were the main components of the reform programme [10]. The objective of the reforms was to create a modern market economy free of price distortions, bureaucratic management and to reduce the widespread government protectionism of the post World War II era. Tax incentives, subsidies and import controls had enabled manufacturers to secure the domestic market with inflated prices. The manufacturing sector was highly diversified with a wide range of small scale ventures operating at high cost. The agricultural sector was supported by an expensive system of subsidies which discouraged greater efficiency in the farming and the processing sectors. The state/public owned business enterprise environment was non-competitive with subsidised equity finance as well as exempt from taxes. Such regulatory factors severely distorted price signals which in turn distorted resource allocation within the economy. These factors also inhibited the economy’s ability to adapt to changing circumstances. The economy, for example, maintained a reliance on protected primary industries despite a steady deterioration in New Zealand’s terms of trade (TOT) and the difficulty in finding export markets. The inward orientation of the policy environment discouraged the private sector’s ability to adapt to foreign knowledge and technological change and thus move closer to international best practice. Australia like New Zealand started its reform programme with the deregulation of the financial sector around 1983 but unlike New Zealand it followed a more gradual approach to economic reform, generally consistent with the conventional liberalisation sequencing approach. For example, the phasing out of tariff protection given to its manufacturing industry did not start until 1988, fiscal and monetary policy has generally not been as tight as New Zealand’s, and the pace of public sector reforms has progressed at a slower rate than New Zealand’s. The deregulation of the New Zealand labour market did not take place until after the main thrust of economic reforms were implemented. In the 1987, Labour Relations Act there were some legislation changes designed to strengthen the accountability of unions and remove unnecessary restrictions in the wage-fixing process. The passing of the Employment Contracts Act (ECA) of 1991 has radically changed the law with regards to industrial relations. The main thrust of the ECA has been to allow the negotiation of individual contracts between employers and employees providing considerable flexibility to the process of wage bargaining. A major change in labour relations took place in Australia in 1987 under a two-tier wage system in which work practice improvements to raise productivity became part of the wage determination process. The Australian like the New Zealand labour market has moved from a national to individual enterprise award system but remains more regulated than the New Zealand market.Australia has generally recorded better growth rates than New Zealand in the post-reform period (as it did in the pre-reform period) as well as a better labour productivity record. The recent downturn in the New Zealand level of economic activity coupled with a strong Australian economic performance has contributed to increased scepticism regarding the long term benefits of the New Zealand economic reform model. Naturally, such comparisons, however, disturbing they may appear to be at first sight, deserve more careful examination. For example, the New Zealand economy grew very strongly in the1992–1996 period. Since then it has been affected by the adverse effects of a major drought, the Asian crisis and undue monetary tightness in 1995–1997. New Zealand also boasts a much better unemployment record than Australia in the 1990s, in part a reflection of a less regulated labour market. Similarly, labour productivity comparisons can be misleading as no account is taken of the amount of capital per worker used in production. Labour productivity, output per worker, is the product of output per unit of capital and capital per worker. It is possible, for example, that Australia’s better labour productivity record reflects the country’s higher unemployment rate. It costs more to employ workers in the more regulated labour markets and those excluded from jobs tend to be less-skilled. The Economist (31 October 1998) uses similar arguments comparing the productivity performance in Britain with that of France and Germany. A better measure of productivity is TFP, i.e. output divided by labour and capital. In fact, TFP is the engine that drives per capita output growth in the long-run. The problem with TFP is that its measurement is quite a complicated task and reported figures are often unreliable. This study seeks to assess the impact of the reforms and their differential speed on TFP growth in the sectors of the two economies that are primarily exposed to the new economic environment. It complements an earlier study [6] on relative productivity trends in the Australian and New Zealand manufacturing sector during the post-reform business cycle period (1986–1996). The technical background on the productivity index is given in Section 2. Section 3 reports and analyses the productivity results. In addition, there is a brief discussion in this section on the productivity cycle in relation to real exchange and TOT developments in the two countries. This analysis provides further insight in addressing the current debate on the prospects for a monetary union between Australia and New Zealand. Concluding remarks are presented in Section 4.

We offer evidence on relative TFP productivity developments in the Australian and New Zealand primary and manufacturing sectors in total as well as in terms of the efficiency and TCH components of productivity growth. Our results indicate that the primary sectors have achieved a much better productivity record relative to the manufacturing sectors of the two countries. In addition, the New Zealand primary sector has recorded a significant increase in productivity in the post-reform period. As this increase in productivity is essentially driven by efficiency improvements, it is reasonable to argue that the sector has responded positively to the pressures imposed by the loss of subsidies and other border protection measures. The New Zealand manufacturing sector recorded an improvement in productivity in the earlier stages of the reform period but these improvements did not carry on through the 1990s. The main problem with this sector’s productivity performance is a poor efficiency record. Somehow, the sector has not been able to deliver on the benefits expected to accrue as a result of the overall micro-economic reforms, including the labour market deregulation of 1991. New Zealand manufacturers appear able to adopt state-of-the-art technology and shift the production frontier but they fall short on their ability to manage the diffusion of technology efficiently. Recent attempts by the New Zealand government to set research funding priorities in the area of technology diffusion should be regarded as an important and positive development.