Remaking New Zealand's economic policy: Institutional elites as radical innovators 1984-1993

During the mid-1980s and early 1990s the New Zealand economy moved from being one of the most regulated outside the former communist bloc to among the most liberal in the OECD. Largely unheralded and begun by an ostensibly social democratic Labour government, changes included the floating of the exchange rate; extensive liberalization of financial, capital and other markets; lowering of trade protection; fiscal restraint and monetary disinflation; changes to the machinery of government; corporatization and then sale of state assets; and changes to industrial relations frameworks (Castles, Gerritsen and Vowles 1996). Known as Rogernomics after Minister of Finance Roger Douglas, these economic policies were heavily derivative of neoclassical economic theories, such as the New Classical and Chicago schools, public choice and new institutional economics (Boston et al. 1996, ch. 2; Goldfinch 1997). This article explains how such radical economic restructuring occurred through the influence of a select group of strategically located institutional elites.