Please e-mail me if you do so, telling
me the title (as I have other work on the web).
This is the pre-copy-editing text of a book review appearing in Journal of
politics sometime in 2002.
A PDF version is not yet available.
Herman Schwartz
Department of Politics
PO Box 400787
University of Virginia
Charlottesville VA 22904-4787
434 924 7818 (x3359 fax)
e-mail: hms2f@virginia.edu
http://www.people.virginia.edu/~hms2f
Remaking New Zealand and Australian Economic Policy: Ideas, Institutions and Policy Communities. By Shaun Goldfinch.
(Washington D.C.: Georgetown University Press, 2000, Pp. 296. $24.95.)
Why and how do long entrenched economic policies and institutions get changed? Shaun Goldfinch tries to answer this question by examining the dramatic policy reversals that occurred in New Zealand and Australia starting in the mid-1980s. He argues – as his subtitle suggests – that ideas, institutions and policy communities all shape not just the onset of policy change but the specific direction it takes. Both countries examined here encountered substantial economic difficulties in the late 1970s. But ideas mattered: actors did not have an automatic understanding of the nature, extent, and causes of this crisis and thus did not have an automatic sense of the appropriate solutions to the problem(s). Instead, a variety of social and bureaucratic actors tried to influence political actors’ understanding of what went wrong and what had to be done.
While ideas were important, institutions did not permit actors to automatically translate ideas into policy. New Zealand had a highly centralized and unitary state that permitted a small number of actors in and around the Cabinet to “crash through” with their preferred policies. The relevant policy community was much smaller than in Australia. In contrast, Australia’s more complicated federal institutional structure and a greater dispersion of power meant that actors had to bargain for change, and that more actors were involved in bargaining. Critically, labor unions had a greater voice in Australian policy making, even though Labor parties initiated change in both societies. Different institutional structures thus determined the differences in outcomes in these two cases. These differences mattered. Australian economic performance has been substantially better than New Zealand’s over the past fifteen years. However it is not clear whether this institutional effect is a purely institutional effect (which would have required an analysis of policy making in Australia’s states) or an effect of scale. Australia after all has a larger and more complex economy, with a greater variety of organized actors and a greater variety of better organized interests.
The book’s great strength is its use of 180 participant interviews to tease out the precise lines of influence on fourteen important policy decisions. In these interviews Goldfinch asked his interviewees to pinpoint the most influential actors and ideas around each decision. This soft version of the Delphi technique involves two risks. First, it may simply confirm retrospective conventional wisdom about what happened. Second, it is not clear whether the interviewees were assessing people’s overt or covert influence, and, as we know, much of political life occurs outside formal meetings. Nonetheless, Goldfinch uses these interviews to sketch out a map of the social forces impinging on many of the most important discrete policy decisions in these two countries.
The interviews also bolster the book’s second great strength, which is to correct, encompass and flesh out many other accounts There are no other book length treatments of the role of ideas in these policy reversals, and few comparative book length studies. Goldfinch shows clearly that Michael Pusey’s survey research based analysis of bureaucrats’ role in the Australian policy reversal (Economic Rationalism in Canberra: A Nation-Building State Changes its Mind [Cambridge: Cambridge University Press, 1991]) misses the mark in assigning great weight both to training in neo-classical economics and the influence of the bureaucracy. Goldfinch also summarizes other ideational accounts of the policy reversals, although he necessarily loses some of the nuances in these finer grained studies of particular policy lines or think tanks.
That said, Goldfinch’s book suffers from two important and related flaws. First, there is no coherent explanation of how ideas, institutions and policy communities come together to influence policy. The closest Goldfinch comes to elaborating a sustained general argument about this occurs in chapter two, which merely presents a laundry list of plausible ways in which ideas might influence policy, and more particularly the kinds of ideas that influenced policy in his cases. In this sense the book’s ambit is substantially smaller than that in, for example, Christopher Hood’s Explaining Economic Policy Reversals (Philadelphia: Open University Press, 1994), which remains the pre-eminent example of this larger enterprise, and which is not cited in Goldfinch’s bibliography.
Second, ideas don’t float freely, nor do politicians. Ideas are carried into the policy arena by actors with interests at stake, and executed by politicians seeking reelection. Goldfinch has neither a discussion of how actors whose experience of their changing positions in markets for goods and votes deployed ideas instrumentally to affect the direction of policy change. Instead Goldfinch generally appears to take the power of ideas and his interviewees’ declarations about the power of ideas at face value. His maps of the lines of influence on policy could have been powerful tools in a more general analysis for explaining why social actors sought to change policy, and the role ideas played in those changes. In this sense he regrettably ignores his own opening analysis of the social construction of policy alternatives in favor of an unstructured series of studies of discrete policy decisions. These decisions did matter, and they were influenced by people’s ideas about proper economic and proper social policy. But Goldfinch is satisfied simply to point out that the institutional landscape ensured a more immediate translation of ideas into policy in New Zealand than in Australia, without asking whether Australian actors might deliberately have pursued the bargained outcome he observes.
Herman M. Schwartz
University of Virginia