MARKET LIBERALIZATION IN NEW ZEALAND: THE INTERACTION OF ECONOMIC REFORM AND POLITICAL INSTITUTIONS IN A PLURALITARIAN DEMOCRACY Jack H. Nagel Political Science Department University of Pennsylvania Philadelphia, PA 19104-6215, USA (215) 898-4255 e-mail:
[email protected] Prepared for delivery at the 1994 Annual Meeting of the American Political Science Association The New York Hilton September 1-4, 1994 Copyright by the American Political Science Association This paper is a preliminary draft. Comments are invited. This research was supported by a grant from the IRIS Center at the University of Maryland, with funds provided by the U.S. Agency for International Development under Cooperative Agreement No. DHR-0015-A-00-0031-00. Additional support was provided by the University of Pennsylvania through the Daniel J. Brodsky Term Chair and a grant from the University's Research Foundation. Summary MARKET LIBERALIZATION-IN THE INTERACTION NEW ZEALAND: OF ECONOMIC REFORM AND POLITICAL INSTITUTIONS IN A PLURALITARIAN DEMOCRACY Jack H. Pagel During the past decade, New Zealand has economic and political undergone radical reforms. In economics, the country moved from having what was probably the most state-dominated protected, regulated, and economy of any capitalist democracy to position at the open, an extreme liberal, free-market end of the spectrum. In politics, the citizens of what had been the world's purest example of a Westminster (or pluralitarian) decided two-party system in 1993 to institute proportional representation. paper explores the interaction This of economics and politics before, during and (speculatively) after the answer twin reforms in order to the following questions: (1) Why were reforms initiated right-wing economic and largely accomplished by the left-wing Labour supposedly Party? (2) Why was economic reform radical in N.Z.