SOCIAL-DEMOCRACY AND MARKET REFORM IN AUSTRALIA AND NEW-ZEALAND

Social democratic governments in Australia and New Zealand adopted pol icies of radical free-market reform, including financial deregulation, privatization, and public-sector reform in the 1980s. Because of the absence of institutional obstacles to government action, reform was fa ster and more comprehensive in New Zealand than in Australia. The New Zealand reforms were associated with increasing inequality and general ly poor economic outcomes. There is nothing in the New Zealand experie nce to support the view that radical free-market economic policies are consistent with social democratic welfare policies or with social dem ocratic values of concern for the disadvantaged, The Australian reform s were less radical, and were accompanied by some refurbishment of the welfare state. Economic performance did nor improve, as anticipated b y advocates of reform, but was considerably better than that of New Ze aland.