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New Zealand since 1984: Elite succession, income distribution and economic growth in a small trading economy

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Abstract

Four interrelated patterns of structural change in the New Zealand economy since 1980 are identified and analysed, against the backdrop of a growth rate which fell substantially behind the rest of the OECD in the late 1980s and early 1990s before recovering, but without catchup, from 1993.

The changes discussed are: a shift in sharemarket capitalization from formerly-dominant productive activities in agriculture, manufacturing and construction to the current predominance of utilities, transport and finance; a sharp increase in overseas investors' share of the economic surplus, from around 20% to over half of post-tax corporate profits; a steady rise in international indebtedness at the same time as sovereign foreign-currency debt was eliminated; hence overseas debt was successfully privatized; a weakening of regulatory control over monopoly profits, opening the way for a surge of rent-seeking activity during the 1990s. The neoliberal reform programme has achieved fiscal and monetary sustainability, increased market flexibility, and insulated the economy against external shocks. At the same time it has led to denationalisation of economic surplus, ongoing current account deficits, and a significant diversion of resources from productive use into rent-seeking.

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Authors and Affiliations

  1. School of Economics and Finance, Victoria University of Wellington, PO Box 600, Wellington, New Zealand

    Geoff Bertram

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  1. Geoff Bertram
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Bertram, G. New Zealand since 1984: Elite succession, income distribution and economic growth in a small trading economy. GeoJournal 59, 93–106 (2004). https://doi.org/10.1023/B:GEJO.0000019968.28675.41

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