Economist Scott Sumner’s 2010 piece on the unacknowledged success of neoliberalism (which I linked to yesterday and you should definitely read or reread) poses an interesting question:
There are two obvious outliers [to aggressive neoliberal reforms]. Norway, the highest-income country, is much richer than other countries with similar levels of economic freedom, and New Zealand, at 80 on the economic freedom scale and only $27,260 in per capita income (US PPP dollars), is somewhat poorer than expected […] Perhaps New Zealand’s disappointing performance is due to its remote location and its comparative advantage in agriculture holding it back in an increasingly globalized economy in which many governments subsidize farming.
Rather than challenge Sumner’s thoughts as to why New Zealand is much poorer (I think his guess explains a lot), I think I can add to it: The Maori.
The Maori are the indigenous inhabitants of New Zealand, and can be compared – socially – to the Native Americans of the New World or the aborigines of Australia. Unfortunately I know next to nothing about the Maori (or other South Pacific cultures), but I do know how to draw rough inferences about things by using data!
The Maori comprise about 15% of New Zealand’s population, whereas in other states settled by Anglo colonies the population of the natives relative to the overall population of the country is minute (aborigines in Australia comprise 3% of the population, for example, and in Canada and the US the indigenous make up about 2%).
The relatively large percentage of indigenous citizens in New Zealand can better explain why New Zealand is an outlier among rich countries, but I also think it’s important to ask why the Maori (and other indigenous populations in Anglo-settled colonies) have failed to match the demographic trends of their European and Asian counterparts.
Institutions are, to me, the obvious answer, but I’m curious as to what the rest of you think. I’d also like to add that I don’t think enough of us think about the issue of land (as in ‘land, labor and capital’ when we discuss the huge demographic gaps found between – for lack of better terms – settlers and natives in Anglo-American countries).
Notes On Liberty 
Hi,
I think people can match anyone else in the world. Lots of people from New Zealand have done amazingly good in business and corporates. For example Ross McEwan took over from Stephen as RBS global CEO. Only problem is with the geographical location i believe.
It is disappointing to read that you have attributed New Zealand’s economic problems to a person such as myself, considering as you have stated, that you know little about me as a Maori person. Tourism is the second largest industry in Aotearoa. For nearly two hundred years, encounters with Maori people have contributed significantly to the ability for Aotearoa to position itself as a hospitable place to visit, enjoy and engage in. If your assertion holds any weight, then it can only be because Maori people are resistant to being entrapped within a global culture that is fairly unevolved and disconnected. Often, the ways value is expressed through Western, and “liberal” cultural vantages, is at odds with the ways they are expressed and interpreted through Indigenous means. A great example is money. Western culture perceives money is valuable, whereas Maori culture perceives exchange as being valueable; money is simply the symbolic form of that exchange.in contemporary times. To only measure the world through surfaces, means you get a reality with little depth. Dig deeper and you might find that Aotearoa is far richer than most nations. Maori people keep Aotearoa real.
Hi huka,
Thanks for stopping by.
I think your argument is extremely disingenuous, though. For example, the post itself is not about New Zealand’s “economic problems” (of which it has very few), but rather why the country is a statistical outlier among OECD states.
I think this question can be answered, in part, by the large Maori population living in the country today. I put forth this answer because the Maori have significantly lower HDI levels than Europeans or East and South Asians in New Zealand.
Is it not true that the Maori are much poorer, on average, than other New Zealanders? Is it not true that the Maori are less healthy (in terms of life expectancy) and less educated (in terms of literacy) than other New Zealanders?
My post is simply acknowledging the facts about New Zealand’s ethnic composition and drawing some conclusions about why the country performs less-well than other rich countries. My open-ended conclusion is to suggest that the Maori lag behind other New Zealanders because of the institutions that have taken root there, not because of any cultural defects.
It is institutions – broadly understood here – that have made the Maori poorer than their fellow countrymen. It is my hunch that these institutions actually keep the Maori from being fully able to participate in the global economy (thus making them poorer), and that these institutional barriers have been put in place – and are kept in place – due to state policies enacted and enforced because of condescending ideas that people in power have about the Maori (see anthropologist Mike Reid for more on this particular point).
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