Hostname: page-component-cd9895bd7-gbm5v Total loading time: 0 Render date: 2024-12-26T21:22:56.020Z Has data issue: false hasContentIssue false
  • English
  • Français

Bringing the bureaucrats back in: neo-liberal tax reform in New Zealand

Published online by Cambridge University Press:  15 June 2012

Johan Christensen
Johan Christensen*
Affiliation:
Department of Political and Social Sciences, European University Institute (EUI), Florence, Italy
*
Johan ChristensenDepartment of Political and Social Sciences European University Institute Via dei Roccettini, 9 San Domenico di Fiesole 50014 Italy Tel.: +39 3271291322 Fax: +39 0554685201 Email: johan.christensen@eui.eu
Get access Rights & Permissions [Opens in a new window]

Abstract

New Zealand moved further in neo-liberal tax reform than most other advanced economies over the last three decades. The article investigates this extreme case to address the question of what explains major neo-liberal economic reform. Comparing tax policy-making in two periods, the 1980s and 2008–10, we argue that neo-liberal tax reform in New Zealand is best understood as the product of “autonomous bureaucratic action”. That is, bureaucratic organisations within the state independently formulated the goals and ideas for reform, took an activist role in policy-making and strongly influenced the policy preferences of ministers. Moreover, responding to a criticism often raised against state-centred theories, we offer an explicit explanation of bureaucratic preferences. We argue that bureaucratic goals and ideas were a product of how particular structural features of the bureaucracy – organisation and training – made ministries more or less receptive to new ideas within the economics discipline.

Keywords

Tax policyneo-liberalstatebureaucracyeconomic ideasNew Zealand
Type
Research Article
Information
Journal of Public Policy , Volume 32 , Issue 2 , August 2012 , pp. 141 - 168
Copyright
Copyright © Cambridge University Press 2012

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Almond, G. (1988) The return to the state. American Political Science Review 82(3): 853–874.CrossRefGoogle Scholar
Béland, D.Hacker, J. (2004) Ideas, private institutions and American welfare state “exceptionalism”: the case of health and old-age insurance, 1915–1965. International Journal of Social Welfare 13: 42–54.CrossRefGoogle Scholar
Blyth, M. (2002) Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century. New York: Cambridge University Press.CrossRefGoogle Scholar
Bollard, A. (1994) New Zealand. In The political economy of policy reform, Williamson (Ed), 73–110. Washington, DC: Institute for International Economics.Google Scholar
Boston, J. (1989) The Treasury and the organisation of economic advice: Some international comparisons. In The making of Rogernomics, Easton B. (Ed). Auckland: Auckland University Press.Google Scholar
Boston, J. (1992) The Treasury: Its role, philosophy and influence. In New Zealand politics in perspective, (3rd ed.), Gold H. (Ed), Chapter 12. US: Pearson Education.Google Scholar
Buckle, R. A. (2010) Tax policy reform New Zealand style. New Zealand Economic Papers 44(2): 129–136.CrossRefGoogle Scholar
Carpenter, D. (2001) The forging of bureaucratic autonomy. Princeton and Oxford: Princeton University Press.Google Scholar
Castles, F., Gerritsen, R.Vowles, J. (Eds) (1996) The great experiment: Labour parties and public policy transformation in Australia and New Zealand. St. Leonards, Australia: Allen & Unwin.Google Scholar
Collier, D. (1993) The comparative method. In Political science. The state of the discipline, II, Finifter A. (Ed), 105–119. Washington, DC: American Political Science Association.Google Scholar
Dickson, I. (2007) The New Zealand GST Policy Choice: An Historical and Policy Perspective. In GST in Retrospect and Prospect, Krever R. and White D. I. (Eds), 45–63. Wellington: Brookers.Google Scholar
Douglas, R. (1980) There's Got to Be a Better Way!. Wellington: Fourth Estate Books.Google Scholar
Douglas, R. (2007) The New Zealand GST Policy Choice and its Political Implications. In GST in Retrospect and Prospect, Krever R. and White D. I. (Eds). Wellington: Brookers.Google Scholar
Gemmell, N. (2010) Tax reform in New Zealand: Current developments. In Australia's future tax system: The prospects after Henry, Evans C., Krever R. and Mellor P. (Eds), 63–92. Sydney: Thomson Reuters.Google Scholar
George, A.Bennett, A. (2005) Case studies and theory development in the social sciences. Cambridge, MA: MIT Press.Google Scholar
Goldfinch, S. (2000) Paradigms, economic ideas and institutions in economic policy change: the case of New Zealand. Political Science 52(1): 1–21.CrossRefGoogle Scholar
Hall, P. (1993) Policy paradigms, social learning, and the state: The case of economic policy-making in Britain. Comparative Politics 25(3): 275–296.CrossRefGoogle Scholar
Heclo, H. (1974) Modern social politics in Britain and Sweden: from relief to income maintenance. New Haven: Yale University Press.Google Scholar
IRD (2005) Briefing for the Incoming Minister of Revenue – 2005. Wellington: Inland Revenue Department.Google Scholar
IRD (2008) Briefing for the Incoming Minister of Revenue – 2008. Wellington: Inland Revenue Department.Google Scholar
Kay, J.King, M. (1990) The British tax system. Oxford: Oxford University Press.Google Scholar
Levy, J. (Ed) (2006) The State after Statism. Cambridge, MA: Harvard University Press.CrossRefGoogle Scholar
Loretz, S. (2008) Corporate taxation in the OECD in a wider context. Oxford Review of Economic Policy 24: 639–660.CrossRefGoogle Scholar
Marier, P. (2005) Where did the bureaucrats go? Role and influence of the public bureaucracy in the Swedish and French pension reform debate. Governance 18(4): 521–544.CrossRefGoogle Scholar
Marriott, L. (2008). The Politics of Retirement Savings Taxation: A Trans-Tasman Comparison (1972–2007). PhD thesis. Wellington: Victoria University of Wellington.Google Scholar
McKinnon, M. (2003) Treasury: The New Zealand Treasury, 1840–2000. Auckland: Auckland University Press.Google Scholar
Nagel, J. (1998) Social choice in a pluritarian democracy: The politics of market liberalization in New Zealand. British Journal of Political Science 28(2): 223–267.CrossRefGoogle Scholar
New Zealand Task Force on Tax Reform (1982) Report (McCaw Report). Wellington: Government Printer.Google Scholar
Nordlinger, E. (1988) The return to the state: critiques. American Political Science Review 82(3): 875–901.CrossRefGoogle Scholar
NZ Herald (2008) Key gives tax cuts, reduces KiwiSaver. Published 8 Oct 2008.Google Scholar
OECD (2007) New Zealand Economic Survey. Paris: OECD.Google Scholar
OECD (2011) New Zealand Economic Survey. Paris: OECD.Google Scholar
Oliver, H. (1989) The Labour caucus and economic policy formation, 1981 to 1984. In The making of Rogernomics, B. Easton (Ed), Chapter 1. Oxford: Oxford University Press.Google Scholar
Peters, B. G. (2010) The politics of bureaucracy: An introduction to comparative public administration. New York: Routledge.Google Scholar
Quiggin, J. (1998) Social democracy and market reform in Australia and New Zealand. Oxford Review of Economic Policy 14(1): 76–95.CrossRefGoogle Scholar
Richardson, I. (1994) Organisational review of the Inland Revenue Department. Report to the Minister of Revenue from the Organisational Review Committee, April 1994.Google Scholar
Sandford, C. T. (1993) Successful Tax Reform: Lessons from an Analysis of Tax Reform In Six Countries. Bath: Fiscal Publications.Google Scholar
Schmidt, V. (2009) Putting the political back into political economy by bringing the state back in yet again. World Politics 61(3): 516–546.CrossRefGoogle Scholar
Skocpol, T. (1985) Bringing the state back in: Strategies of analysis in current research. In Bringing the State Back In, Evans et al. (Eds), Chapter 1. New York: Cambridge University Press.Google Scholar
Skocpol, T.Somers, M. (1980) The uses of comparative history in macrosocial inquiry. Comparative Studies in Society and History 22: 174–197.CrossRefGoogle Scholar
Steinmo, S. (1993) Taxation and democracy. New Haven: Yale University Press.Google Scholar
Tax Working Group (2010) A Tax System for New Zealand's Future. Report of the Victoria University of Wellington Tax Working Group. Wellington: Victoria University of Wellington.Google Scholar
Treasury (1984) Economic Management. Wellington: Government Printer.Google Scholar
Treasury (2009a) Medium Term Tax Policy Challenges and Opportunities. Treasury report. Wellington: Treasury.Google Scholar
Treasury (2009b) Where to from here for tax reform? Treasury report. Wellington: Treasury.Google Scholar
Treasury (2010) Budget 2010. Minister's Executive Summary. Wellington: Treasury.Google Scholar
Treasury and IRD (2009a) Design of the income tax/transfer system. Background document for the Tax Working Group. Wellington: Treasury and IRD.Google Scholar
Treasury and IRD (2009b) Changing the rate of GST: fiscal, efficiency, and equity considerations. Background document for the Tax Working Group. Wellington: Treasury and IRD.Google Scholar
UK Institute for Fiscal Studies (1978) The Structure and Reform of Direct Taxation (Meade Report). London: Allen and Unwin.Google Scholar
US Treasury (1984) Tax Reform for Fairness, Simplicity, and Economic Growth. Washington, DC: Government Printing Office.Google Scholar
Weir, M.Skocpol, T. (1985) State structures and the possibilities for ‘Keynesian’ responses to the Great Depression in Sweden, Britain, and the United States. In Bringing the State Back In, Evans et al. (Eds), Chapter 4. New York: Cambridge University Press.Google Scholar
White, D. (2009) Income and consumption taxes in New Zealand Tax reform in the 21st century, Head J. and Krever R. (Eds), 95–144. Netherlands: Kluwer Law International.Google Scholar
Yoo, K.-Y.de Serres, A. (2005) Tax treatment of private pension savings in OECD countries. OECD Economic Studies 39(2004/2): 73–110.Google Scholar