What’s Up with New Zealand?

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).