Mineral Economics

, Volume 31, Issue 1–2, pp 141–151 | Cite as

Mining’s impact on the competitiveness of other sectors in a resource-rich economy: Australia since the 1840s

Original Paper
  • 106 Downloads

Abstract

Australia’s several major mining booms since the 1840s have impacted positively on national economic growth and non-trivially on the competitiveness of other sectors of its economy. This paper shows the latter to be consistent with economic theory only when sectoral policy developments are taken into consideration. It reveals several features that make the sectoral composition of Australia’s economy unusual. One is that the manufacturing share of GDP was unusually high until protectionism was phased out from the 1970s. Another is that the farm sector continued to enjoy a strong comparative advantage despite mining booms and high rates of assistance to import-competing manufacturers. Also, the agricultural and services sectors’ shares of GDP remained fairly constant rather than diverging during 1860–1960. The paper concludes by drawing out implications for future policies.

Keywords

Mining booms Structural transformation Trade costs Manufacturing protection 

JEL classification

F13 F63 N457 O13 Q17 

References

  1. ABARES (2015) Agricultural commodities statistics 2015. Australian Bureau of Agricultural and Resource Economics and Sciences, CanberraGoogle Scholar
  2. ABS (2017) Labour force, Australia Cat No 6291.0. Australian Bureau of Statistics, CanberraGoogle Scholar
  3. Alston JM, Pardey PG (2016) Antipodean agricultural and resource economics at 60: agricultural innovation. Aust J Agric Resour Econ 60(4):554–568.  https://doi.org/10.1111/1467-8489.12162 CrossRefGoogle Scholar
  4. Anderson K (1987a) On why agriculture declines with economic growth. Agric Econ 1(3):195–207.  https://doi.org/10.1016/0169-5150(87)90001-6 CrossRefGoogle Scholar
  5. Anderson K (1987b) Tariffs and the manufacturing sector. In: Maddock R, McLean I (eds) The Australian Economy in the Long Run. Cambridge University Press, Cambridge, pp 165–195Google Scholar
  6. Anderson K (2009) Distortions to agricultural incentives: a global perspective, 1955–2005. Palgrave Macmillan and World Bank, London and Washington DCCrossRefGoogle Scholar
  7. Anderson K (with the assistance of N.R. Aryal) (2015). Growth and cycles in Australia’s wine industry: a statistical compendium, 1843 to 2013. (Adelaide: University of Adelaide Press). [Accessed 17 Oct 2016]. Available from URL: www.adelaide.edu.au/press/titles/austwine and as Excel spreadsheets at www.adelaide.edu.au/wine-econ/databases/winehistory
  8. Anderson K, Garnaut R (1987) Australian protectionism: extent, causes and effects. Allen and Unwin, SydneyGoogle Scholar
  9. Anderson K, Smith B (1981) Changing economic relations between Asian ADCs and resource-exporting developed countries. In: Hong W, Krause L (eds) Trade and growth in the advanced developing countries. Korea Development Institute Press, Seoul, pp 293–338Google Scholar
  10. Anderson K, Strutt A (2014) Emerging economies, productivity growth, and trade with resource-rich economies by 2030. Aust J Agric Resour Econ 58(4):590–606.  https://doi.org/10.1111/1467-8489.12039 CrossRefGoogle Scholar
  11. Anderson K, Lloyd P, MacLaren D (2007) Distortions to agricultural incentives in Australia since World War II. Econ Record 83(263):461–482CrossRefGoogle Scholar
  12. Anderson K, Lattimore R, Lloyd P, MacLaren D (2009) Australia and New Zealand. In: Anderson K (ed) Distortions to agricultural incentives: a global perspective, 1955–2005. Palgrave Macmillan and World Bank, Londonand Washington DC, pp 221–256Google Scholar
  13. Auty RM (1993) Sustaining development in mineral economies: the resource curse thesis. Routledge, London.  https://doi.org/10.4324/9780203422595 CrossRefGoogle Scholar
  14. Blainey G (1966) The tyranny of distance: how distance shaped Australia’s history. Macmillan, MelbourneGoogle Scholar
  15. Blainey G (2003) The rush that never ended: a history of Australian mining, 5th edn. Melbourne University Press, MelbourneGoogle Scholar
  16. Brigden JR, Copeland DB, Dyason EC, Giblin LF, Wickens CH (1929) The Australian tariff: an economic enquiry. Melbourne University Press, MelbourneGoogle Scholar
  17. Butlin NG, Sinclair WA (1986) Australian gross domestic product 1788–1860: sources and methods. Aust Econ Hist Rev 26(2):127–147Google Scholar
  18. Butlin M, Dixon R, Lloyd PJ (2014) A statistical narrative: Australia, 1800–2010. In: Ville S, Withers G (eds) The Cambridge economic history of Australia. Cambridge University Press, Cambridge, pp 555–594CrossRefGoogle Scholar
  19. Corden WM (1984) Booming sector and Dutch disease economics: survey and consolidation. Oxf Econ Pap 36(3):359–380.  https://doi.org/10.1093/oxfordjournals.oep.a041643 CrossRefGoogle Scholar
  20. Davidson BR (1981) European farming in Australia: an economic history of Australian farming. Elsevier, AmsterdamGoogle Scholar
  21. Deardorff AV (1984) An exposition and exploration of Krueger’s trade model. Can J Econ 5(4):731–746CrossRefGoogle Scholar
  22. Federico G (2005) Feeding the world: an economic history of agriculture, 1800–2000. Princeton University Press, PrincetonGoogle Scholar
  23. Findlay R (1995) Factor proportions, trade, and growth. MIT Press, CambridgeGoogle Scholar
  24. Freebairn J (2015) Mining booms and the exchange rate. Aust J Agric Resour Econ 59(4):533–548.  https://doi.org/10.1111/1467-8489.12046 CrossRefGoogle Scholar
  25. Gillitzer C, Kearns J (2005) Long-term patterns in Australia’s terms of trade. RDP2005-01. Reserve Bank of Australia, SydneyGoogle Scholar
  26. Grafton RQ, Mullen J, Williams J (2015) Australia’s agricultural future: returns, resources and risks. Australian Council of Learned Academies, MelbourneGoogle Scholar
  27. Griffith G, Watson AS (2016) Antipodean agricultural and resource economics at 60: agricultural markets and marketing policies. Aust J Agric Resour Econ 60(4):594–609.  https://doi.org/10.1111/1467-8489.12161 CrossRefGoogle Scholar
  28. Hatton T, Withers G (2014) The labour market. In: Ville S, Withers G (eds) The Cambridge economic history of Australia. Cambridge University Press, Cambridge, pp 351–372CrossRefGoogle Scholar
  29. Jones RW (1971) A three-factor model in theory, trade, and history. Ch. 1. In: Bhagwati JN, Jones R, Mundell R, Vanek J (eds) Trade, balance of payments and growth. North-Holland, AmsterdamGoogle Scholar
  30. Jones RW (1975) Income distribution and effective protection in a multicommodity trade model. J Econ Theory 11(1):1–15.  https://doi.org/10.1016/0022-0531(75)90035-6 CrossRefGoogle Scholar
  31. Krueger AO (1977) Growth, distortions and patterns of trade among many countries. International Finance Section, PrincetonGoogle Scholar
  32. Kuznets S (1966) Modern economic growth: rate, structure and spread. Yale University Press, New HavenGoogle Scholar
  33. Leamer EE (1987) Paths of development in the three-factor, n-good general equilibrium model. J Polit Econ 95(5):961–999.  https://doi.org/10.1086/261498 CrossRefGoogle Scholar
  34. Lee D (2013) Reluctant relaxation: the end of the iron ore export embargo and the origins of Australia’s mining boom, 1960–1966. History Australia 10(3):149–170CrossRefGoogle Scholar
  35. Lerner A (1936) The symmetry between import and export taxes. Economica 3(11):306–313.  https://doi.org/10.2307/2549223 CrossRefGoogle Scholar
  36. Lloyd PJ (2017) The first hundred years of tariffs in Australia: the colonies. Aust Econ Hist Rev 57(3):316–344.  https://doi.org/10.1111/aehr.12104 CrossRefGoogle Scholar
  37. Lloyd PJ, MacLaren D (2015) Relative assistance to Australian agriculture and manufacturing since Federation. Aust J Agric Resour Econ 59(2):159–170.  https://doi.org/10.1111/1467-8489.12070 CrossRefGoogle Scholar
  38. Maddock R, McLean I (1984) Supply-side shocks: the case of Australian gold. J Econ Hist 44(4):1047–1067.  https://doi.org/10.1017/S0022050700033088 CrossRefGoogle Scholar
  39. McLean IW (2013) Why Australia prospered: the shifting sources of economic growth. Princeton University Press, PrincetonGoogle Scholar
  40. Mitchell BR (2005) International historical statistics. Palgrave Macmillan, BasingstokeGoogle Scholar
  41. Norgés J (2011) Agro e Industria: del centenario al bicentenario. [Agriculture and industry: from the centenary to the bicentenary]. Ciudad Argentina, Buenos AiresGoogle Scholar
  42. Productivity Commission (2003) From industry assistance to productivity: 30 years of ‘the commission’. Productivity Commission, CanberraGoogle Scholar
  43. RBA (2017) Commodity prices (Sydney: Reserve Bank of Australia). Accessed 21 July at http://www.rba.gov.au/statistics/frequency/commodity-prices/2017
  44. Samuelson PA (1981) Summing up on the Australian case for protection. Q J Econ 96(1):147–160.  https://doi.org/10.2307/2936145 CrossRefGoogle Scholar
  45. Shaw A (1990) Colonial settlement 1788–1945. In: Williams DB (ed) Agriculture in the Australian economy, 3rd edn. University of Sydney Press, Sydney, pp 1–18Google Scholar
  46. Sinclair, W.A. (2009) Annual estimates of gross domestic product: Australian colonies/states 1861–1976/77. [Accessed 17 Oct 2016]. Available at URL: http://arrow.monash.edu.au/hdl/1959.1/88855
  47. Smith B (2015) The resource curse exorcised: evidence from a panel of countries. J Dev Econ 116(1):57–73.  https://doi.org/10.1016/j.jdeveco.2015.04.001 CrossRefGoogle Scholar
  48. Stolper W, Samuelson PA (1941) Protection and real wages. Rev Econ Stud 9(1):58–73.  https://doi.org/10.2307/2967638 CrossRefGoogle Scholar
  49. Sturzenegger AC, Salazni M (2008) Argentina. In: Anderson K, Valdéz A (eds) Distortions to agricultural incentives in Latin America. World Bank, Washington DC, pp 59–85Google Scholar
  50. Syrquin M (1988) Patterns of structural change. In: Chenery H, Srinivasan TN (eds) Handbook of Development Economics, Vol 1. North-Holland, Amsterdam, pp 203–273CrossRefGoogle Scholar
  51. Syrquin M, Chenery H (1989) Three decades of industrialization. World Bank Econ Rev 3(1):145–181.  https://doi.org/10.1093/wber/3.2.145 CrossRefGoogle Scholar
  52. Trebilcock MJ (2014) Dealing with losers: the political economy of policy transitions. Oxford University Press, London.  https://doi.org/10.1093/acprof:oso/9780199370658.001.0001 CrossRefGoogle Scholar
  53. van der Ploeg F (2011) Natural resources: curse or blessing? J Econ Lit 49(2):366–420.  https://doi.org/10.1257/jel.49.2.366 CrossRefGoogle Scholar
  54. Vanplew W (1987) Australians: historical statistics. Fairfax, Syme and Weldon, SydneyGoogle Scholar
  55. Venables AJ (2004) Small, remote and poor. World Trade Rev 3(3):453–457.  https://doi.org/10.1017/S147474560400206X CrossRefGoogle Scholar
  56. Venables AJ (2016) Using natural resources for development: why has it proven so difficult? J Econ Perspect 30(1):161–184.  https://doi.org/10.1257/jep.30.1.161 CrossRefGoogle Scholar
  57. Viner J (1929) The Australian tariff. Economic Record 5(9):306–315.  https://doi.org/10.1111/j.1475-4932.1929.tb00624.x CrossRefGoogle Scholar
  58. World Bank (2017) World development indicators. Accessed 20 July at http://wdi.worldbank.org/
  59. WTO (2016) International trade statistics 2016. World Trade Organization, GenevaGoogle Scholar

Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2017

Authors and Affiliations

  1. 1.School of EconomicsUniversity of AdelaideAdelaideAustralia
  2. 2.Crawford School of Public PolicyAustralian National UniversityCanberraAustralia

Personalised recommendations